STOCK MARKET WATCH, Wednesday January 14

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday January 14, 2009

DAYS REMAINING UNTIL BUSH IS GONE = 5.5

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

In recognition of those who predicted the Dow's precipitous return on Bush values (9/29/08): JuneBourder and AnneD

AT THE CLOSING BELL ON January 13, 2009

Dow... 8,448.56 -25.41 (-0.30%)
Nasdaq... 1,546.46 +7.67 (+0.50%)
S&P 500... 871.79 +1.53 (+0.18%)
Gold future... 820.70 -0.30 (-0.04%)
30-Year Bond 3.02% +0.03 (+0.90%)
10-Yr Bond... 2.30% -0.01 (-0.52%)

---

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES..............................................S&P FUTURES

Market Conditions During Trading Hours

GOLD,EURO, YEN, Loonie and Silver

---

Handy Links

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---

Read more: du

[ozymandius]

1. Market WrapUp

Treading Water and Seeking Muddle-Through Outcomes
BY FRANK BARBERA, CMT

This week's article is entitled ‘Treading Water’ as it describes the overall environment markets and economies now reside in coming into the New Year in 2009. Looking back at prior years, 2006, 2007, 2008, it was obvious to everyone except a nobel-laureate economist that things were not right in the financial markets and that huge imbalances existed in the global economy. It always amazes us how the ‘ivory tower’ types fail to recognize the 5 tonne elephant in the room, things like the Housing Bubble, the Credit Bubble and the kind of excessive systemic leverage which had taken control of the global financial system in recent years.

As far back as April 2007, we wrote about the possibility of a strong ‘depression’ type economic contraction unfolding in 2008 along with identifying the bear market from the outset with the S&P near 1500. Along the way, we highlighted many of the big stories of the last two years including General Motors, Lehman, AIG, Fannie Mae/Freddie Mac along with the start of the sub-prime crisis in our columns on Financial Sense going back to early 2007 before sub-prime hit the headlines. Yet with the crowd now mumbling ‘deflation’ at every turn, and the recession obvious to one and all, it is analytically a time to reign in the forecasting and perhaps begin focusing on more muddle-through outcomes.

http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Today's Reports

08:30 Export Prices ex-ag. Dec
Briefing.com NA
Consensus NA
Prior -2.9%

08:30 Import Prices ex-oil Dec
Briefing.com NA
Consensus NA
Prior -1.8%

08:30 Retail Sales Dec
Briefing.com -1.0%
Consensus -1.2%
Prior -1.8%

08:30 Retail Sales ex-auto Dec
Briefing.com -1.2%
Consensus -1.3%
Prior -1.6%

10:00 Business Inventories Nov
Briefing.com -0.5%
Consensus -0.5%
Prior -0.6%

10:30 Crude Inventories 01/09
Briefing.com NA
Consensus NA
Prior +6.68 mln

14:00 Fed Beige Book

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

[UpInArms]

35. Dec. retail sales fall 2.7% vs. -1.5% expected - Nov. retail sales revised lower to -2.1%

06. U.S. Dec. retail sales fall 2.7% vs. -1.5% expected
8:30 AM ET, Jan 14, 2009

07. U.S. Dec. retail sales ex-autos fall record 3.1%
8:30 AM ET, Jan 14, 2009

08. U.S. retail sales fall six months in a row
8:30 AM ET, Jan 14, 2009

09. U.S. retail sales down 9.8% in past year
8:30 AM ET, Jan 14, 2009

10. U.S. Dec. retail sales weak across the board
8:30 AM ET, Jan 14, 2009

16. U.S. Dec. retail sales hit by falling prices, weak demand
8:30 AM ET, Jan 14, 2009

17. U.S. Nov. retail sales revised lower to -2.1%
8:30 AM ET, Jan 14, 2009

18. U.S. Dec. import prices fall 4.2% vs. -5% expected
8:30 AM ET, Jan 14, 2009

19. U.S. Dec. nonfuel import prices fall 1.1%
8:30 AM ET, Jan 14, 2009

20. U.S. Dec. imported petroleum prices fall 21.4%
8:30 AM ET, Jan 14, 2009

21. U.S. Dec. export prices fall 2.3%
8:30 AM ET, Jan 14, 2009

22. U.S. import prices down record 9.3% in past year
8:30 AM ET, Jan 14, 2009

[UpInArms]

37. Retail sales plunge 2.7% in December - Weakest U.S. sales on record excluding auto sales

http://www.marketwatch.com/news/story/Retail-sales-plunge-27-December/story.aspx?guid=%7B7746B204%2DF4BB%2D4941%2D8769%2D47654E4A2902%7D

WASHINGTON (MarketWatch) -- Stung by weak demand and falling prices, U.S. retail sales plunged a seasonally adjusted 2.7% in December from November, the Commerce Department estimated Wednesday.

Excluding a 0.7% decline in auto sales, retail sales recorded their biggest drop since record-keeping began in the early 1990s, falling 3.1%.

And with both gasoline and autos excluded, sales fell 1.5%, the largest drop since September 2001.

The nation's retail sales have fallen for six months in a row now -- the longest decline on record -- with the declines accelerating as the economy weakened in the final quarter of the year. Sales data were revised lower for both October and November, to declines of 3.4% and 2.1%, respectively. Read the full government report.

Sales last month were down a record 9.8% compared with December 2007, the Commerce Department's data showed. Sales excluding autos fell a record 6.7% in the past year.

For all of 2008, sales slipped 0.1% compared with 2007, the first decline in annual sales since the records began in 1992.

...more...

[UpInArms]

38. December's sales were down a record 9.8% compared with the previous December.

http://www.marketwatch.com/news/story/Retail-sales-plunge-27-December/story.aspx?guid=%7B215B47D0%2D05C6%2D4972%2D93CE%2D0B11D3A92D3E%7D

WASHINGTON (MarketWatch) - Stung by weak demand and falling prices, U.S. seasonally adjusted retail sales plunged 2.7% in December, the Commerce Department estimated Wednesday. Excluding the 0.7% decline in auto sales, retail sales recorded their biggest drop since record-keeping began in the early 1990s, falling 3.1%. Excluding gasoline and autos, sales fell 1.5%, the largest drop since September 2001. Retail sales have fallen for six months in a row, the longest decline on record. Sales in October and November were revised lower. Chain stores have reported further weakening in early January as the recession began its second year. December's sales were down a record 9.8% compared with the previous December

[Roland99]

53. Any quotes from surprised economists?

[Ghost Dog]

58. Retail sales down 2.7% compared to revised down November.

Does anyone have the unrevised November statistic to hand? What would have been the fall in December compared to the unrevised November number?

[UpInArms]

40. Mortgage applications up as refinancing jumps

http://news.yahoo.com/s/nm/20090114/bs_nm/us_mortgage_applications

NEW YORK (Reuters) – Mortgage applications jumped in the first full week of 2009 as record low interest rates spurred the greatest demand for home refinancing loans in over 5-1/2 years, data from an industry group showed on Wednesday.

Low mortgage rates, however, have yet to fuel demand for loans to purchase homes.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended January 9 increased 15.8 percent to 1,324.8, the highest reading since the week ended July 11, 2003, when it reached 1,358.2.

Thirty-year mortgage rates have dropped dramatically since the Federal Reserve unveiled a plan in late November to buy as much as $500 billion of mortgage securities backed by Fannie Mae (FNM.P) (FNM.N), Freddie Mac (FRE.P)(FRE.N) and Ginnie Mae. The program also entails buying up to $100 billion of debt issued by Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

The refinance share of applications increased to 85.3 percent from 79.8 percent the previous week, the highest level since the MBA started conducting its survey in 1990.

Spencer Rascoff, chief operating officer at Zillow.com, an online real estate service company based in Seattle, said loan requests to his company are up more than 200 percent from just two months ago, with loan requests on pace to hit about 25,000 in January and loan quotes on pace to hit 200,000.

"Many experts agree that rates will stay relatively low for at least the next few months since the federal government is now committed to buying mortgage-backed securities to keep borrowing costs low," Rascoff said on Tuesday.

...more...

[UpInArms]

49. Nov Business Inventories @ -0.7%

from the 10:00 blather

November business inventories slipped 0.7%, which is worse than the 0.5% decline that was expected. Inventories declined 0.6% the month before.

[Ghost Dog]

79. Beige Book Shows Slower Economy, Reduced Employment Across US

Washington, Jan 14 2009 (IFR) - A December/early January survey of economic conditions by the 12 Federal Reserve banks reveals that the economic slowdown in the US has worsened since the last survey, and that consumer spending, manufacturing activity, business loans, labor market conditions and real estate prices continued to deteriorate across the US.

...

"Retail sales during the holiday season were weak or mostly down in the Boston, New York, Philadelphia, Atlanta, Chicago, St. Louis, Minneapolis, Kansas City, Dallas and San Francisco Districts," the Beige Book said. And even in the two remaining districts, holiday sales in Cleveland were "flat to down" late last year, while retailers in the Richmond District had "disappointing sales during the holiday season."

...

Manufacturing activity fell in "most" districts, and four districts -- Kansas City, St. Louis, Cleveland and Dallas -- noted lower auto-related manufacturing. Six districts reported slower tourism, and two districts, Richmond and Atlanta, reported "mixed" tourism activity.

Residential real estate was weaker in "nearly all districts." Eight saw weak or declining conditions, although San Francisco saw some improvements. The Beige Book said most districts also reported weaker commercial real estate conditions -- the Boston district perhaps spoke for most when it said the commercial real estate market is "grim and depressing."

Accordingly, most districts also saw reduced bank lending, and many saw tighter credit conditions as a partial cause.

Also as expected, most districts saw signs of weaker labor markets, such as increased layoffs, hiring freezes and job losses in the manufacturing sector.

/... http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=4a955e1c-50b9-4219-9145-7ead57ef9628

[ozymandius]

3. Oil rises to near $39 on Bernanke comments

SINGAPORE – Oil prices rose to near $39 a barrel Wednesday in Asia after Federal Reserve Chairman Ben Bernanke said a stimulus package could help revitalize the ailing U.S. economy.

Light, sweet crude for February delivery was up $1.06 to $38.84 a barrel by midafternoon in Singapore in electronic trading on the New York Mercantile Exchange after trading as high as $39.36. The contract rose overnight 19 cents to settle at $37.78.

Bernanke said Tuesday that a $700 billion financial rescue program being discussed by Congress was needed to combat the worst financial crisis to hit the U.S. and the global economy since the 1930s. The stimulus package "could provide a significant boost to economic activity," he said.

.....

The report is expected to show that oil stocks rose 3 million barrels last week, according to the average of estimates in a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos. The department said in last week's report that oil stocks jumped 6.7 million barrels the previous week.

The Platts survey also projects that gasoline inventories increased 1.8 million barrels and distillates gained 1.7 million barrels last week.

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

[radfringe]

10. phhhttttt...

economy not stimulated yet. This is where higher prices for heating/gas pumps will "trickle up" - people will cut back even more.

I suspect we will see these little bubblettes form and burst over the next few months. The silver lining to rising oil/energy costs is it will remind people how dependent we are on traditional energy sources and maintain positive interest/support for alternative sources, conservation, and energy efficiency.

Don't mean to sound like a grandma here - but during the oil embargo of the 70's there was alot of interest in alternative energy - however once the embargo lifted, the general public interest faded. The fuel crunch didn't last long enough to make a lasting shift in public concerns.

Oil is one part keeping the economy in a downward spiral, there are many other parts which need to be addressed before we see any upward economic movement.

[Tansy_Gold]

16. ITA, and in the 70s we had an anti-establishment subculture that

supported us.

Today we have another anti-establishment culture but it's not nearly as "sub" as "back then."

Obama's administration could ride that wave of "change" into a much more lasting green revolution. Remains to be seen if they do.


Tansy Gold, who still misses her 1970s underground house (but not the Indiana it was built in!)

[Demeter]

24. Reagan Killed All of Carter's Energy Initiatives

It was the first thing he did. Then he fired the Air Traffic Controllers. Then he cut taxes.

We may never recover from that trifecta.

[snot]

65. Don't forget de-regulating the S&Ls.

[UpInArms]

94. actually GHWB sat on the banking board and re-wrote all those

regulations

it was criminal

[Demeter]

23. Talk About Raising False Hopes

As Dr. McCoy would say: "It's dead, Jim."

[ozymandius]

4. Citi gives control of brokerage to Morgan Stanley (supermarket is dead)

NEW YORK – The original financial supermarket is dead. Citigroup signaled the end of a decade-long experiment to create one-stop shopping for financial services — everything from consumer loans to investment banking — with Tuesday's announcement that it was merging its Smith Barney brokerage into a joint venture with Morgan Stanley.

The deal, which will give Citigroup $2.7 billion in badly needed cash as it gives up control of Smith Barney, comes as the company still struggles in the aftermath of the mortgage and credit crisis. There is speculation that CEO Vikram Pandit, who for months supported Citigroup as a "universal bank," will be taking further steps to simplify and streamline the company.

And many people on Wall Street believe Citigroup could be headed for an even larger-scale dismantling if the federal government — which now has a stake in Citi thanks to its recent bailout — has its way.

....

To be sure, JPMorgan Chase & Co.'s model is essentially a supermarket, too, but it does not have as large an international presence as Citigroup has had. Bank of America Corp. has many disparate businesses, too — including the recent government-brokered acquisition of Merrill Lynch, the world's largest brokerage — but it maintains a strong focus on its U.S. operations. Perhaps more importantly, analysts argue that these banking giants were managed and integrated much better over the years than Citigroup was.

http://news.yahoo.com/s/ap/20090114/ap_on_bi_ge/citigroup

---

Good! 'Too big to fail' needs to be a thing of the history's dustbin. Citi and every behemoth company like it should keep shedding units.

[DemWynner]

67. I agree about that!

What did I hear the other day, that the banks were taking the bailout money and buying up other banks. That is outrageous! there needs to be a limit on the size of these institutions. If a company is too big to fail, then there needs to be a law that says that it needs to break into smaller elements! this can be done. this would hopefully take care of the outrageous salaries that the top CEO's are getting, because the bonuses would not be as much and there would be much more competition. This might change the way business is done, but that is not always bad.

:rant: :banghead: :rant: :banghead:

[Demeter]

83. 1/3 of Banks Will Disappear Next Year

http://www.cnbc.com/id/15840232?video=975644719

Let's hope it's the right 1/3.

[Ghost Dog]

76. Citigroup worries mount

Wed Jan 14, 2009 7:25pm GMT NEW YORK (Reuters) - Citigroup (C.N) faced growing uncertainty on Wednesday about whether it could ever function well, leading investors to drive its shares down below $5.00, to their lowest level since the bank won a government rescue in November.

More bad news is expected on Friday, when the bank plans to report quarterly results, six days ahead of schedule. A fifth straight multibillion-dollar loss is expected.

Rival JPMorgan Chase (JPM.N) also moved up its earnings release six days, and is due to report on Thursday.

Once the world's largest bank, Citigroup is expected to shrink by about a third as it focuses on corporate, investment and retail banking and trims its trading operations, a person familiar with the plan said. Citigroup will also put businesses and assets it no longer wants into a separate structure, with an eye towards eventual sales, the person said.

...

"I really don't know how the unravelling finishes," said Henry Asher, president of Northstar Group Inc in New York. "It looks like the government is forcing a controlled descent, without going the full monty as it did with Lehman."

In afternoon trading, Citigroup shares were down $1.20, or 20.3 percent, to $4.70, and hit their lowest level since the bank won the second government lifeline. The bank is part of the Dow Jones industrial average .DJI.

...

On Tuesday Citigroup announced plans to bolster its balance sheet by combining its Smith Barney brokerage and other businesses with Morgan Stanley's (MS.N) wealth management unit.

Morgan Stanley will pay $2.7 billion and take a 51 percent stake in the joint venture, with the ability to buy the rest after five years.

...

A drumbeat of analysts has questioned whether regulators or Citigroup itself will give Pandit time to finish the job.

"Regulators are concerned about the quality of the management that got us where we are in the banking industry," said Nancy Bush, an independent banking analyst and managing member of NAB Research LLC. "At Citigroup, the government has far more influence than on any other bank in the industry, and that's why there may be more force to bear there."

Pandit became chief executive in December 2007 and inherited many of Citigroup's problems from predecessor Charles Prince. The bank has reported $20.3 billion of net losses, and taken more than $64 billion of credit losses and writedowns, since Pandit took over.

Oppenheimer & Co analyst Meredith Whitney, who was earlier than most analysts in recognizing Citigroup's problems, on Wednesday wrote that the brokerage venture with Morgan Stanley is merely "a way for Citigroup to raise cash" before releasing quarterly results. She expects further asset sales and spinoffs.

But in tight credit markets, Citigroup's ability to spin off assets may be limited.

"We question where the buyers will come from, since few are both large enough and strong enough," wrote David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller.

...

Ten analysts who issued estimates in the last week forecast on average that Citigroup would report a fourth-quarter loss of 94 cents per share, according to Reuters Estimates.

The annual cost of protecting $10 million of Citigroup debt against default for five years rose to $410,000 on Wednesday from $265,000 on Tuesday, according to Phoenix Partners Group.

/... http://uk.reuters.com/article/businessNews/idUKTRE50D4R620090114?pageNumber=2&virtualBrandChannel=0&sp=true

[ozymandius]

5. ING to cut 750 jobs in US: report

THE HAGUE (AFP) – The troubled Dutch bank and insurance group ING will cut 750 jobs from its US operations during the first quarter of the year due to the economic crisis, the Dutch news agency ANP reported Tuesday.

"Like many companies in the United States, we have to adapt our activities to market conditions," an ING spokesman was quoted as saying.

ING currently has some 11,000 employees in the United States.

http://news.yahoo.com/s/afp/20090114/ts_alt_afp/financeeconomyusnetherlandsbankingjobsing;_ylt=As1nNAdiX.83ZoWy9etI91Hv5rEF

[ozymandius]

6. Credit Crisis Indicators: TED Spread Below 1.0

Here are a few indicators of credit stress:

*The TED spread is at 0.99, sharply lower. (improved)

The TED spread was stuck above 2.0 for some time. The peak was 4.63 on Oct 10th. The TED spread has finally moved below 1.0, although a normal spread is around 0.5.

*The three month LIBOR has decreased to 1.109%. The three-month LIBOR rate peaked (for this cycle) at 4.81875% on Oct. 10. (improved) Imagine all those adjusted rate mortgage loans tied to treasuries or even the 3 month LIBOR? The rates are looking pretty good!

A2P2 Spread
*The A2P2 spread as at 2.23. This spread has seen a huge decline in 2009. This is far lower than the record (for this cycle) of 5.86 after Thanksgiving, but still way too high. (improved).

This is the spread between high and low quality 30 day nonfinancial commercial paper. Right now quality 30 day nonfinancial paper is yielding close to zero. If the credit crisis eases, I'd expect a significant further decline in this spread - although this is good progress.

more at Calculated Risk

[Dr.Phool]

7. About time you got out of bed!

Good morning.:hi:

[ozymandius]

9. Bed?

Good morning Dr. Phool. :donut: :donut: :donut:

Been waiting long?

[Dr.Phool]

13. Third cup of coffee.

But, I have the luxury of going back to bed.

[Tansy_Gold]

17. sleepy head

6:40 where you are.

4:40 where I am, and I'm already at work.

Ha!




:hi:



Tansy Gold

[Demeter]

25. Insomnia Is Nothing to Brag About

Iwoke up at 1 AM, and it was -10F outside. It's now up to 1F. I did go back to sleep in between.

[Tansy_Gold]

28. No insomnia. I have to get up this early

I need quiet to do my work and this is before the traffic and other noise starts.

And I've always been an early bird. I make up for it by going to bed late!


:hi: everyone!



TG

[UpInArms]

20. China's next export: Starbucks coffee

http://news.yahoo.com/s/ap/20090114/ap_on_bi_ge/as_china_starbucks

BEIJING – Starbucks Corp. launched a new brand of coffee grown by farmers in China and said it hopes to bring the blend to stores all over the world.

The Seattle-based company, which has been closing stores in the U.S. to cut costs, said its new blend is made in China's southwestern province of Yunnan, bordering Vietnam, Laos and Myanmar.

"Our intention is to work with the officials and the farmers in Yunnan province to bring Chinese coffee not (only) to China, but Chinese coffee to the world," Martin Coles, president of Starbucks Coffee International, told The Associated Press.

"Ultimately I'd love to see our coffees from China feature on the shelves of every one of our stores in 49 countries around the world," he said. A launch date for foreign distribution hasn't been announced and will depend on how soon farmers can grow enough beans to ensure local and overseas supply, he said.

The company has been working for three years with farmers and officials in the province before the launch, and the coffee will initially combine arabica beans from Latin America and the Asia-Pacific with local Yunnan beans. But Coles said they hope to develop a source of superpremium arabica coffee from the province, expanding it to new brand offerings in China, and then internationally.

The new blend will be called "South of the Clouds", the meaning of Yunnan in Chinese.

...more...

one more reason to not buy from Starbucks

[Dr.Phool]

21. Cream, sugar, melamine?

[sarcasmo]

72. Extra Melamine with mine please, I am feeling lucky today.

[closeupready]

30. No. Just no. You couldn't pay me to drink it, SBUX. Food products from China

have a frightening track record.

[Ghost Dog]

34. Yunnan Province is fascinating and beautiful, I'm told:

http://www.travelchinaguide.com/cityguides/yunnan/
http://images.google.es/images?ndsp=18&um=1&hl=en&q=Yunnan+province&start=0&sa=N

[ozymandius]

8. Bernanke Hints Banks, Economy In Much Worse Shape Than Previously Admitted

At the Stamp Lecture, London School of Economics, London, England, Bernanke Urges ‘Strong Measures’ to Stabilize Banks

Federal Reserve Chairman Ben S. Bernanke warned that a fiscal stimulus won’t be enough to spur an economic recovery and that the government may need to buy or guarantee banks’ tainted assets to revive growth.

“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke said in a speech today at the London School of Economics. “More capital injections and guarantees may become necessary to ensure stability and the normalization of credit markets.”

My Translation: "Banks are in much worse shape than we have admitted previously. More taxpayer money is needed to prop up these failing banks."

The Fed chairman recommended three approaches on troubled assets. Public purchases of the bad assets are one possibility, as was originally planned under U.S. Treasury Secretary Henry Paulson’s Troubled Asset Relief Program, or TARP.

The government could also agree to absorb, in exchange for warrants or a fee, part of the losses on a specified portfolio of troubled assets, he said. Regulators used that method recently with their bailout of Citigroup Inc.

Another measure “would be to set up and capitalize so- called bad banks, which would purchase assets from financial institutions in exchange for cash and equity in the bad banks,” he said.

My Translation: "Nothing is working yet, including the massive bailout of Citigroup. Here are three more ideas for Congress for still more taxpayer money".

more at Mish's Global Economic Trend Analysis

[ozymandius]

11. "Bernanke an Expert on the Great Depression??" (fresh and scorching analysis)

OOH! It's good!

One of the reasons I am partial to Australians is that they are critical thinkers, not easily cowed by authority or conventional wisdom.

In the US, one of the reasons that Fed chair Ben Bernanke is given so much deference (aside from the fact that we treat people in positions of power with kid gloves) is that he is regarded as an expert on the Great Depression, and has also studied Japan's Lost Decade.

Steve Keen, author of Debunking Economics and professor at the University of Western Sydney, has taken a look at some of Bernanke's writings on the Great Depression and finds them wanting, Serious wanting. I've read some of Bernanke's work on Jaoan, and quite a few of his speeches, and was bothered by some of the assumptions and omissions. Keen tears into Bernanke with a gusto that I find refreshing.

....

The most glaring problem on first glance is that, despite Bernanke’s claim in Chapter One “THE MACROECONOMICS OF THE GREAT DEPRESSION: A Comparative Approach” that he will survey “our current understanding of the Great Depression”, there is only a brief, twisted reference to Irving Fisher’s Debt Deflation Theory of Great Depressions, and no discussion at all of Hyman Minsky’s contemporary Financial Instability Hypothesis.

While he does discuss Fisher’s theory, he provides only a parody of it–in which he nonetheless notes that Fisher’s policy advice was influential:

Fisher envisioned a dynamic process in which falling asset and commodity prices created pressure on nominal debtors, forcing them into distress sales of assets, which in turn led to further price declines and financial difficulties. His diagnosis led him to urge President Roosevelt to subordinate exchange-rate considerations to the need for reflation, advice that (ultimately) FDR followed.

He then readily dismisses Fisher’s theory, for reasons that are very instructive:

Fisher’s idea was less influential in academic circles, though, because of the counterargument that debt-deflation represented no more than a redistribution from one group (debtors) to another (creditors). Absent implausibly large differences in marginal spending propensities among the groups, it was suggested, pure redistributions should have no significant macroeconomic effects. ” (Bernanke 1995, p. 17)

....

This is a perfect example of the old (and very apt!) joke that an economist is someone who, having heard that something works in practice, then ripostes “Ah! But does it work in theory?”.

It is also–I’m sorry, there’s just no other word for it–mind-numbingly stupid. A debt-deflation transfers income from debtors to creditors? From, um, people who default on their mortgages to the people who own the mortgage-backed securities, or the banks?

Well then, put your hands up, all those creditors who now feel substantially better off courtesy of our contemporary debt-deflation…

.....

Do I have to spell out the problem here? Only to neoclassical economists, I expect: during a debt-deflation, debtors don’t pay the interest on the debt–they go bankrupt. So debtors lose their assets to the creditors, and the creditors get less–losing both their interest payments and large slabs of their principal, and getting no or drastically devalued assets in return. Nobody feels better off during a debt-deflation (apart from those who have accumulated lots of cash beforehand). Both debtors and creditors feel and are poorer, and the problem of non-payment of interest and non-repayment of principal often makes creditors comparatively worse off than debtors (just ask any of Bernie Madoff’s ex-clients).

[UpInArms]

15. Newsweek Encourages Bankruptcy Filings: The Case for Walking Away

http://www.newsweek.com/id/177749/output/print

In January, we're supposed to sit down and organize our personal finances. This year I'll risk my good-girl reputation with a subversive idea: go bankrupt in 2009. If you're reaching the end of your rope, don't try to hold on. Save what you can.

It's painful and humiliating even to consider bankruptcy, let alone join that crowd in the courthouse corridor, waiting for your name to be called. Normally I'd say suck it up, cut spending and repay your consumer debt. But that's not always possible, especially with an economic tsunami rolling over your home, job and health insurance.

Most families, honorable to the end, struggle longer than they should, says Katie Porter, a law professor at the University of Iowa. By the time they give in, they've lost assets they could have used to start over again. That defeats the point of bankruptcy—to stop the self-blame and hopelessness that goes with bad luck and bad bills, and give yourself a second chance.

The right time to go bankrupt is when you're financially stuck but still have assets to protect. You can use Chapter 7, the most popular type, only once in eight years, so draw upa "no kidding" plan for living on your income when you're finally clear. "If you're out of work, try not to go bankrupt until you have a new job and can see what's ahead of you," says Harvard Law School professor Elizabeth Warren.

It's a mistake to tap your retirement accounts to make minimum payments on monstrous bills. IRAs and 401(k)s are largely protected in bankruptcy, as is most of your child's 529 college-savings account. This money is your future. Leave it alone and use credit cards for your necessities. Card issuers know that some of their customers will fail. That's why they charge elephant fees.

Your health is your future, too. You're doing your family no favors by forgoing medical treatment because you can't pay. Bankruptcy eliminates medical as well as consumer debt.

...more...

[Dr.Phool]

22. The author has been living in a cave.

Obviously never heard of the "Bankruptcy Reform Act of 2005".

[Sen. Walter Sobchak]

68. The impact of that law and the means test is greatly exagerated

It is a bad law for alot of reasons, the credit counseling requirement is absurd, its like a chat about birth control during the second trimester and only serves to stall the process. Not to mention the quality of the programs out there is generally very low and the field is rife with scams. Financial illiteracy is a national problem and doesn't just impact those who are already bankrupt.

The largest problem with the new system is unethical bankruptcy firms pushing people who would qualify for Chapter 7 into Chapter 13 because their fees are higher claiming the new law requires it - even if they would easily qualify for Chapter 7 through the means test. Although there are some situations where Chapter 13 is a much better alternative than Chapter 7 depending on the individual. With or without the new law.

[InkAddict]

29. The problem, however, is finding and keeping one's JOB!

2/3 out-of-work in this renting household, currently and again, but not yet even living on BORROWED unemployment funds as red tape stalls incoming checks and the # of claimants crash the filing system.

As the lone PT worker, I really hate to see this Alberta Clipper, cold and snow, upping the utility bill, and a real horror to those without shelter. :scared:

What DOES ONE HAVE TO DO to make them understand it's about JOBS THAT PAY A LIVING WAGE for longer than two to three months of the year!

[FarCenter]

41. In non-recourse states you can walk away from a mortgage without bankruptcy

In, for example, AZ or CA, the homeowner can go through foreclosure and give up the house without going bankrupt.

The mortgage holder only gets whatever they can for the property, but can't touch other assets of the homeowner.

[Tansy_Gold]

36. the ones who come out ahead are those who pick up the foreclosed

REAL ESTATE for a song.

Not the ones who lent the money in the first place, though they may get bailed out.

And not the ones who bought the MBS (with the emphasis on the BS), though they may end up with a bailout, too.

It's the ones who go to the tax sales and the foreclosure auctions and ransack zillow for the $1000 properties.

Because eventually, one way or another, the economy will recover, even if it's as a Chinese colony.

Pearl Buck knew it. It's always about the land. The great goddess ain't makin' any more of it, and those who can "own" it can control a whole lot of other things. And that's why the use of the mortgage bubble to steal the land back into the hands of the feudal overlords is so important.

With jobs, people can own their own land and break the stranglehold of the aristocracy. Why do you think there are revolts in Latin America about land redistribution? It's the land, it's always the land.

Tansy Gold, tryin' to hang onto her 1.25 acres right now.

[Sen. Walter Sobchak]

69. there really aren't that many bargains out there

the $1000 Detroit crackhouse really isn't represenative of the market, the forclosure auction of the latenight infomercial is a thing of fiction.

[TroubleMan]

50. LOL - an expert in repeating it.

He just wants to have his TARP parachute so he and his buddies will have a soft landing, while the rest of us crash land.

[Demeter]

26. Tell Me, Doctor, What Was Your First Clue?

Oh, you haven't gotten one yet?

[ozymandius]

12. Catch you folks later.

I need an early lead on my classes today. Have fun and watch out for those economic reports. They're going to be nasty.

ozy :hi:

[Dr.Phool]

14. Have a good one!

:hi:

[UpInArms]

18. dollar watch

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

Last trade 83.916 Change -0.343 (-0.44%)

U.S. Trade Deficit Falls to $40.4 bln, Lowest Level Since 2003

http://www.dailyfx.com/story/bio1/U_S__Trade_Deficit_Falls_to_1231857770386.html

The United States Commerce Department reported today that the U.S. Trade deficit fell to $40.4 bln in November, the lowest level in five years, from $57 bln in October. The report showed a record fall in the amount of imports from China and a remarkable fall in the demand for oil. The U.S. dollar extended gains against the euro after the government report was announced.



Forecast for the U.S. dollar

The U.S. dollar has been very strong over the past two weeks, particularly against the euro. In fact, the EUR/USD fell by more than 800 pips since the beginning of the year, trading from 1.40 to 1.32 in just a matter of two weeks. However, more important that the past is the future and I expect more dollar strength going forward. First, a severe U.S. dollar undervaluation is now likely to lead to a substantial improvement of the U.S. Balance of Payments through continued strong export performance (today, the trade deficit fell to a 5 year low). Second, with the world economy slowing down is reasonable to think that the demand for commodities will also begin to slow down. As a result of this, commodity sensitive currencies like the Canadian dollar, Australian dollar and New Zealand dollar will be particularly vulnerable against safe heaven currencies like the U.S. dollar. Finally, a significant shift of interest rate expectations in favor of rate cuts by central banks around the world (ECB will be next) is likely to help the U.S. dollar to rally further.

...more...

US Dollar Strengthens Further - US Retail Sales Forecasted to Contract for Sixth Straight Month

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Strengthens_Further___1231882296509.html

The US dollar remained strong across the majors as risk aversion remained in play following a speech by Federal Reserve Chairman Ben Bernanke. The bulk of Chairman Bernanke’s speech focused on the causes of the financial crisis, the Federal Reserve’s policy responses, and the differences between the Federal Reserve’s credit easing efforts and the Bank of Japan’s quantitative easing efforts between March 2001 and March 2006, which have been widely deemed unsuccessful. Looking forward, Chairman Bernanke said that if President-elect Barack Obama does indeed implement a large fiscal stimulus package, it is likely to provide a “significant boost” for the economy, but in order to promote a long-lasting recovery the plan must include measures to “further stabilize and strengthen the financial system.” Additional assistance may be needed in the form of more capital injections, guarantees, and efforts to remove toxic assets off the books of financial institutions, which happens to be the original intention for the Troubled Asset Relief Program (TARP). Of course, such efforts will not be readily accepted by the public, and Mr. Bernanke urged politicians to convince their constituents that financial stabilization is necessary for economic recovery.

Looking ahead to Wednesday, the Commerce Department is forecasted to report that US retail sales fell negative for the sixth straight month in December. This is particularly negative because the holiday shopping season is supposed to be a boon for retailers, but even the most aggressive discounting wasn’t able to offset the impact of a deteriorating labor market, tighter credit conditions, and a year-long recession. More specifically, advance retail sales are anticipated to have contracted 1.2 percent during the month, and excluding auto sales are expected to have slumped 1.3 percent. We’ve already heard disappointing results from a variety of sources, including Mastercard’s SpendingPulse survey, which showed that holiday spending tumbled 4 percent in December from a year earlier (excluding gasoline). As a result, another contraction in advance retail sales is likely, and these may mark a rather consistent trend through the first half of 2009 as well. As we saw with US non-farm payrolls, the impact of a disappointing result may be limited, as the Federal Reserve has already cut the fed funds target to a record low range of 0.0 percent - 0.25 percent and has no room to cut further.

...more...

[UpInArms]

19. Hedge firm Man Group to sue over Madoff exposure

http://www.reuters.com/article/businessNews/idUSTRE50D20H20090114?feedType=RSS&feedName=businessNews

LONDON (Reuters) - Man Group, the world's largest listed hedge fund firm, told Reuters it will take legal action, in conjunction with its investors, over the firm's exposure to the alleged fraud by U.S. financier Bernard Madoff.

"We will be suing the people involved," Man Chief Executive Peter Clarke said in an interview Wednesday.

"We will be looking for remedies on behalf of our investors ... We will take action in conjunction with our institutional investors." Last month Man Group said it was exposed to Madoff Securities through its institutional fund of funds business, RMF, which had around $360 million in funds directly or indirectly sub-advised by Madoff.

...not much more...

[UpInArms]

46. Madoff to be in court as U.S. again seeks to jail him

http://www.reuters.com/article/domesticNews/idUSTRE50D3KT20090114

NEW YORK (Reuters) - Accused swindler Bernard Madoff will be back in court on Wednesday as U.S. prosecutors again try to persuade a judge to end his house arrest at his luxury apartment and toss him in jail.

A hearing is scheduled for 2:30 p.m. in Manhattan federal court.

Madoff, a 70-year-old veteran money manager who authorities say has confessed to running a $50 billion scam that defrauded investors worldwide, is out on $10 million bail and living under guard in his $7 million Manhattan penthouse apartment.

The government wants Madoff jailed pending trial or a guilty plea, saying he had sent at least $1 million in valuables, including diamond watches, to family and friends in violation of a court order.

Madoff's actions show he cannot be trusted to abide by court requirements, and he may try to flee to avoid going to prison, prosecutors say.

Lawyers for Madoff have argued that the mailings were innocent mistakes and that their client, who has surrendered his passport, poses no risk of flight.

Ira Sorkin, one of his lawyers, said on Tuesday that Madoff would appear in court for Wednesday's hearing. Madoff, who has been charged with securities fraud and faces the possibility of spending the rest of his life in prison if convicted, is only allowed out of his apartment to go to court.

A judge on Monday rejected the government's request to jail Madoff, but prosecutors have appealed that ruling. The appeal will be heard by a different judge, U.S. District Judge Lawrence McKenna.

Madoff "should not be trusted with a second chance to dissipate assets," Assistant U.S. Attorneys Marc Litt and Lisa Baroni wrote in appeal papers filed late on Tuesday.

<snip>

Among the new restrictions was an order for Madoff to provide the government with a list of portable valuables to be checked every two weeks.

...more...

[Demeter]

27. Expert calling it a U.S. depression

http://www.upi.com/Business_News/2009/01/11/Expert_calling_it_a_US_depression/UPI-11211231704692/

COLLEGE PARK, Md., Jan. 11 (UPI) -- The U.S. economy is in a depression, a University of Maryland economics professor contends.

Professor Peter Morici, a former chief economist at the U.S. International Trade Commission, said the American economy is in a worse condition than a recession, Kiplinger reported in its January issue.

Among other factors, Morici noted 2.6 million payroll jobs have been lost since December 2007, the dollar is falling value and the nation has a big trade deficit with China.

"The economy contracted at about a 5 percent annual rate in the fourth quarter. This looks worse than a recession to me," he said.

Morici said President-elect Barack Obama has clear economic challenges before him when he takes office this month.

"The economy will not recover without fundamental changes in banking and trade policy. A large stimulus package, though necessary, will only give the economy a temporary lift," he said. "The economy is in a depression, not a recession."

Among the other issues facing the former Illinois senator is energy production, he said.

"Politically correct promises to create millions of new jobs producing alternative fuels makes effective presidential campaign slogans, but realistic policies for governing require aggressive development of more conventional oil and gas, as well as non-conventional energy sources." he said.

DIBS ON THE FIRST SIGN OF SPRING!

[sarcasmo]

73. Wait until the 21st, every expert will be calling it a Depression.

[UpInArms]

31. U.S. arrests wealth manager accused of faking death

http://www.reuters.com/article/newsOne/idUSTRE50D12320090114

MIAMI (Reuters) - U.S. marshals have arrested a pilot accused of parachuting out of his plane and letting it crash in an apparent attempt to avoid financial fraud prosecution by faking his death, an investigator said late on Tuesday.

The pilot, Marcus Schrenker, 38, was arrested late on Tuesday at a campsite in the north Florida town of Quincy, Santa Rosa County Sheriff's Sgt. Scott Haines said by e-mail.

Details of the arrest were sketchy and Haines could not confirm local media reports that Schrenker was hospitalized after cutting his wrists in an apparent suicide attempt.

<snip>

Schrenker was wanted in Indiana on financial fraud charges alleging he misled consumers who invested money in his wealth management companies and misappropriated hundreds of thousands of dollars of their money.

...more at link...

[Ghost Dog]

32. GLOBAL MARKETS-Banking concerns weigh on world shares

Wed Jan 14, 2009 7:18am EST LONDON, Jan 14 (Reuters) - European shares fell and Wall Street was set for a weaker open on Wednesday as concerns about the banking sector weighed, while worries about the euro zone economy kept the euro near a one-month low against the dollar.

Deutsche Bank tumbled 9 percent after saying it has racked up a loss of about 4.8 billion euros in the final three months of 2008. HSBC hit a seven-year low after Morgan Stanley analysts said it may need to raise up to $30 billion in a rights issue.

Data showed Germany's economy grew at its slowest pace in three years in 2008, with the economy contracting by between 1.5-2.0 percent in the final three months.

"In the first week of the year, people forgot about banks' woes for a moment. But now they are back in the spotlight," said Pascal Decque, analyst at Natixis in Paris.

MSCI world equity index was down 0.16 percent. The FTSEurofirst 300 index of top European shares was down 1.6 percent. U.S. stock futures were down around 0.9 percent, pointing to a weaker open on Wall Street.

/... http://www.reuters.com/article/marketsNews/idAFLE29414120090114?rpc=44&sp=true

[Ghost Dog]

33. Euro zone output drops by record, ECB seen cutting

BRUSSELS, Jan 14 (Reuters) - Euro zone industrial production plunged by a record amount year-on-year in November, signalling a deepening recession and strengthening market views the ECB will cut interest rates by 50 basis points on Thursday.

Industrial output in the 15 countries using the euro in November fell 1.6 percent on the month and 7.7 percent year-on-year -- the steepest annual drop since records started in 1990, the European Union statistics office said on Wednesday.

Economists polled by Reuters had expected a 1.8 percent monthly fall and a 6.0 percent year-on-year decline.

Economists said the fall was in line with a quarterly contraction in euro zone gross domestic product of around 1 percent in the fourth quarter of last year and expect the economy to shrink by about 2 percent in 2009.

"The further very sharp fall in industrial production in November exerts late additional pressure on the European Central Bank to deliver a significant interest rate cut on Thursday. We expect a 50 basis point cut from 2.50 percent to 2.00 percent," said Howard Archer, economist at IHS Global Insight.

Eurostat also revised downwards its October output data to a 1.6 percent monthly contraction from the previous 1.2 percent drop and a 5.7 percent year-on-year fall from 5.3 percent.

The data showed industrial production was pulled down by plunging output of consumer durables and intermediate goods.

/... http://www.reuters.com/article/marketsNews/idINLE15385220090114?rpc=44

[Ghost Dog]

70. Europe indices close 4.6%- 5% lower; HSBC leads banks down

LONDON, Jan 14 (Reuters) - European shares closed lower on Wednesday, falling for the sixth consecutive session, with financials hammered as heavyweight HSBC (HSBA.L) slid on worries it will need to raise money to shore up its balance sheet.

The FTSEurofirst 300 .FTEU3 index of top European shares fell 4.3 percent to 804.17 points, its lowest close in three weeks.

HSBC closed 8 percent lower after Morgan Stanley analysts said the bank is likely to halve its dividend and may need to raise up to $30 billion in a rights issue.

"It's a combination of many things coming at once," said Gareth Williams, European equity strategist at ING. "There's the banking sector, US retail sales, the bankruptcy at Nortel. Arguably, all this should be in the price, but coming together it's raising concerns about the scale of the bad news in the quarter."

...

"Our detailed study of HSBC's capital and asset quality position reinforces our belief that it will have to halve the dividend and raise major capital in 2009," Morgan Stanley analysts Anil Agarwal and Michael Helsby said in a note.

Deutsche Bank (DBKGn.DE) tumbled 9.1 percent after saying it has racked up a loss of about 4.8 billion euros ($6.4 billion) in the final three months of 2008 alone.

Royal Bank of Scotland RBOS.L fell 18 percent. Other banks to fall included BNP Paribas (BNPP.PA), Banco Santander (SAN.MC) and Credit Suisse (CSGN.VX), down between 5.7 and 8.6 percent.

Britain's Barclays (BARC.L) said it is cutting more UK-based jobs in its retail and commercial banking business, which a person familiar with the matter said is likely to mean a further 2,100 jobs will go. Its shares closed 14.4 percent lower.

HBOS (HBOS.L) and Lloyds (LLOY.L) fell 13.5 and 11.9 percent respectively. HBOS will delist this week after Lloyds takes it over. It was confirmed after the market closed that its replacement in the FTSEurofirst 300 will be Belgian telecoms firm Mobistar (MSTAR.BR).

Miners featured among Europe's biggest losers, falling along with metal prices, hammered by renewed worries over the outlook for the global economy.

Anglo American (AAL.L), Antofagasta (ANTO.L), BHP Billiton (BLT.L), Eurasian Natural Resources Corp. (ENRC.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) fell between 7.2 and 12.3 percent.

Cement maker HeidelbergCement (HEIG.DE) plunged 15.1 percent on market talk it may carry out a capital increase to beef up its balance sheet. The company declined to comment.

Around Europe, the UK's FTSE 100 index .FTSE closed 5 percent lower; Germany's DAX index .GDAXI and France's CAC 40 .FCHI both lost 4.6 percent.

All 38 sectors in the pan-European index finished lower.

/... http://www.reuters.com/article/marketsNews/idCALE11315320090114?rpc=44&sp=true
____

European Stocks Decline, Led by Deutsche Bank, HSBC, Siemens

Jan. 14 (Bloomberg) -- European stocks fell for a sixth straight day as a $6.3 billion fourth-quarter loss from Deutsche Bank AG and speculation financial firms may need to raise more capital sparked the biggest selloff in banks since October.

Deutsche Bank, German’s largest bank by assets, sank 9 percent. HSBC Holdings Plc dropped 8 percent as Morgan Stanley said Europe’s biggest bank by market value may have to raise as much as $30 billion and halve its dividend. Anglo American Plc led an 8.3 percent decline in mining companies as Citigroup Inc. downgraded the shares and base metals retreated. Siemens AG slid 12 percent after saying orders fell “significantly.”

The Dow Jones Stoxx 600 Index slid 4.4 percent to 192.87 in London. The measure extended losses after U.S. retail sales slumped more than twice as much as forecast and Nortel Networks Corp., North America’s biggest maker of telephone equipment, filed for bankruptcy protection in the U.S.

“It’s like having teeth pulled,” said David Hussey, London-based head of European equities at MFC Global Investment Management, which has about $220 billion in global assets. “There is constant bad news on the screens. We had the first wave of subprime writedowns at the banks and now we are seeing real economy writedowns.”

...

National benchmark indexes declined in all 18 western European markets. Germany’s DAX retreated 4.6 percent as Commerzbank AG and Deutsche Postbank AG tumbled. France’s CAC 40 lost 4.6 percent and the U.K.’s FTSE 100 dropped 5 percent.

Greece’s benchmark ASE Index slumped 5.5 percent after the country had its sovereign credit rating lowered one step by Standard & Poor’s, citing the nation’s weakening finances.

...

Earnings at companies in the Stoxx 600 dropped 16 percent on average in 2008 and will fall 1.2 percent this year, according to forecasts compiled by Bloomberg. Analysts estimate profits at financial firms in the measure slumped 56 percent last year, the worst decline among 10 industries.

Commerzbank, Germany’s second-largest lender, declined 11 percent to 3.86 euros. BNP Paribas SA, France’s biggest bank, lost 5.7 percent to 32.07 euros.

HSBC tumbled 8 percent to 588.75 pence. The lender’s profit is likely to fall “sharply” this year and won’t recover until 2011 at the earliest, Morgan Stanley analysts including Michael Helsby and Anil Agarwal wrote in a note yesterday. Gareth Hewett, an HSBC spokesman in Hong Kong, declined to comment.

...

Anglo American, the world’s fourth-biggest diversified mining company, sank 9.5 percent to 1,293 pence. Xstrata Plc, the fourth-largest copper producer, slumped 12 percent to 688 pence as Citigroup cut its recommendation for both companies to “hold” from “buy.”

The brokerage also downgraded shares of Antofagasta Plc and Kazakhmys Plc. Zinc fell in London on speculation that China’s stockpiling of the metal won’t be enough to erode a global oversupply. Copper, aluminum and nickel also dropped.

Siemens plunged 12 percent to 42.31 euros. Merrill Lynch & Co. downgraded the shares to “neutral” from “buy” after Europe’s largest engineering company said first-quarter orders fell. Siemens Chief Financial Officer Joe Kaeser said in an interview the company is sticking to a target to boost 2009 earnings to 8 billion to 8.5 billion euros.

Ericsson AB, the world’s biggest maker of wireless networks, slid 3.4 percent to 57.70 kronor. Alcatel-Lucent SA, the largest maker of fixed-line networks, declined 4.6 percent to 1.53 euros.

Nortel filed for bankruptcy protection in Wilmington, Delaware, a victim of the global credit crunch and declining sales.

...

Man Group Plc decreased 6.8 percent to 210 pence. The world’s biggest publicly traded hedge-fund manager said assets under management dropped 21 percent to $53.3 billion in the last three months of 2008 as it wrote down two funds linked to Bernard Madoff.

Investors from New York to Sao Paulo have grown less pessimistic about stocks over the next six months on speculation a U.S. stimulus plan and the lowest interest rates on record will revive the global economy, a survey of Bloomberg users from Jan. 5 to Jan. 9 showed.

Still, concern that stock losses will deepen remains elevated even after falling from record levels. The benchmark index for European options, the VStoxx Index, climbed 15 percent to 52.97, the biggest increase in two months. The gauge, which measures the cost of using options as insurance against declines in the Euro Stoxx 50 Index, surged to 87.51 in October, the highest since at least 2001, data compiled by Bloomberg show.

/... http://www.bloomberg.com/apps/news?pid=20601085&sid=as8rIXWKjB2c&refer=europe

[UpInArms]

39. Tiffany cuts forecast, posts holiday-sales decline

http://www.marketwatch.com/news/story/Tiffany-cuts-forecast-posts-21/story.aspx?guid=%7B54971975%2DE469%2D4544%2DAB77%2D81731C1499E0%7D

NEW YORK (MarketWatch) -- Citing the familiar refrain of a deteriorating global economy and cautious consumer spending, Tiffany & Co. on Wednesday posted a 21% decline in holiday sales and again cut its full-year forecast range.

Shares of Tiffany (TIF: 22.00, -0.06, -0.3%) fell more than 5% in pre-market trading. They closed Tuesday at $22.

The New York-based luxury retailer said worldwide net sales in the November-December 2008 holiday period tumbled 21% to $687.4 million from $867.3 million in the year-earlier period.

"The holiday season represents the largest portion of fourth-quarter sales, so we do not expect any improvement for the quarter that will end on Jan. 31," said Michael Kowalski, the company's chief executive officer. "Based on that, net earnings will decline in the fourth quarter."

Tiffany is now forecasting full-year earnings of $2.25 to $2.30 a share, excluding charges, and sales of about $2.85 billion.

On Nov. 26, the company had slashed its full-year profit forecast to a range of $2.30 to $2.50 a share. In August, it had expected a profit of as much as $2.92 a share.

...more...

:nopity:

[UpInArms]

42. How to Understand a Trillion-Dollar Deficit

http://www.time.com/time/business/article/0,8599,1870699,00.html?xid=feed-yahoo-biztech

snipping to the explanation:

"One million seconds comes out to be about 11½ days. A billion seconds is 32 years. And a trillion seconds is 32,000 years. I like to say that I have a pretty good idea what I'll be doing a million seconds from now, no idea what I'll be doing a billion seconds from now, and an excellent idea of what I'll be doing a trillion seconds from now."

:faint:

[Robbien]

47. One article is saying hedge funds lost a trillion in assets last year

Industry assets fell by more than $1 trillion in 2008
Outflows of $512 billion last year were driven by investor redemptions and hedge fund liquidations, while losses suffered by managers accounted for another $535 billion drop in assets. That left industry assets down $1.047 trillion, or 36%, to $1.84 trillion, for the whole year, HedgeFund.net said.
http://www.marketwatch.com/news/story/Industry-assets-fell-more-1/story.aspx?guid={B8BAB206-B123-4257-84E8-47227FA9C8A5}


A trillion dollars in the private hands of people who would never have been able to live long enough to spend even a fraction of it.

A trillion. Yikes.

[UpInArms]

43. 9:32 EST and they're off like a rock

Dow 8,312.60 135.96 (1.61%)
Nasdaq 1,523.07 23.39 (1.51%)
S&P 500 856.74 15.05 (1.73%)
10-Yr Bond 2.214% 0.083

NYSE Volume 119,514,890.625
Nasdaq Volume 31,694,207.031

09:17 am : S&P futures vs fair value: -19.60. Nasdaq futures vs fair value: -22.00. Stock futures continue to trade with marked weakness. The pessimistic tone follows several sessions of defensive trading. Heading into this session, stocks are down roughly 2.1% week-to-date, and down roughly 6.7% over the last five trading sessions. According to stock futures, the stock market is expected to add to those declines by beginning the session with a 2.2% loss. Current weakness follows a batch of disappointing retail sales data, which indicated December retail sales dropped 2.7% month-over-month. Excluding autos, sales were down 3.1%. Economists were looking for declines of 1.2% and 1.4%, respectively. The disappointing data reflect consumers' unwillingness to spend amid heightened unemployment levels and weak economic conditions. Such conditions have renewed profit concerns for investors. That fear has been exacerbated with word Deutsche Bank (DB) will post a fourth quarter loss of 4.8 billion euros, or $6.3 billion, and disappointing outlooks from the likes of Tiffany (TIF), Under Armor (UA), and Bunge (BG). Meanwhile, word that Citigroup (C) and Morgan Stanley (MS) are pairing their brokerage businesses is providing little relief in premarket action.

09:00 am : S&P futures vs fair value: -18.10. Nasdaq futures vs fair value: -20.30. U.S. stock futures are trading at their lowest point of the morning, suggesting a markedly lower start to the session. Action overseas is mixed, though, as Asian markets posted gains, but European indices trade with considerable weakness. The MSCI Asia-Pacific Index closed with a 1.1% gain, led by bank and energy stocks. Japan's Nikkei closed a more modest 0.3% higher with help from energy stocks, which gained amid a rebound in crude oil prices. Hong Kong's Hang Seng also closed 0.3% higher. Bank of China climbed 2.7%, though Royal Bank of Scotland (RBS) sold a $2.4 billion stake in the bank. PetroChina (PTR) gained 2.0% amid higher oil prices. The Shanghai Composite closed a more robust 3.5% higher. Officials announced growth in local bank lending and money supply surged 18% in December, which led to chatter that economic conditions may soon stop deteriorating. Banks rallied as a result. European banks, however, are leading the major European indices lower. France's CAC is down 2.5% as Societe Generale and BNP Paribas trade as laggards. Societe Generale is down nearly 12%, while BNP Paribas is down 7.6%. Germany's DAX is down 3.1%. Deutsche Bank (DB) is down 10% after reports indicated the company would post a fourth quarter loss of 4.8 billion euros. Britain's FTSE is currently trading with a 3.5% loss as HSBC (HBC) dives 10% and Barclays (BCS) drops 13%. HSBC is trading near new multiyear lows after having its profit estimates slashed by analysts. Barclays, meanwhile, has indicated some 2,100 jobs are at risk in its global retail and commercial banking unit, according to Dow Jones.

08:30 am : S&P futures vs fair value: -14.20. Nasdaq futures vs fair value: -14.30. Stock futures have slipped lower after the latest batch of economic data hit the wires. Advance December retail sales declined 2.7%, which is worse than the 1.2% decline that was widely anticipated. The decline reflects further deterioration after retail sales fell 2.1% the month before. Retail sales less autos declined 3.1%. They were expected to decline 1.4% after falling 2.5% the month before. Separately, the December Import Price Index declined 4.2% month-over-month, and 9.3% year-over-year. Import prices were expected to decline 5.3% and 9.5%, respectively. November import prices were revised lower to reflect a 7.0% month-over-month decline, and a 5.4% year-over-year decline.

08:00 am : S&P futures vs fair value: -8.10. Nasdaq futures vs fair value: -8.80. Stock futures currently point to a downward start, which marks a continuation of the defensive tone seen in recent sessions. Citigroup (C) and Morgan Stanley (MS) are combining their brokerage businesses into a joint venture, which will be called Morgan Stanley Smith Barney. Morgan Stanley will take 51% ownership of the venture by paying Citi $2.7 billion in cash. Morgan Stanley can purchase an additional 15% stake after the venture's third year, and another 15% after the fifth year. Based on regulatory requirements, a deal is expected to be completed in the second half of 2009. Shares of C were recently indicated almost 6% lower at $5.55 per share in premarket trading. MS was recently indicated 3.5% lower at $18.20 per share in premarket action. According to Dow Jones, Deutsche Bank (DB) has warned it will post a fourth quarter loss of 4.8 billion euros. The loss comes as a reminder that the fundamental picture for banks remains uncertain; investors anxiously await JPMorgan Chase (JPM) to make its quarterly announcement Thursday. The number of companies issuing cautious outlooks continues to mount; Under Armor (UA) and Tiffany (TIF) are among the latest to issue downside guidance.

[UpInArms]

44. 9:49 EST redder still

Dow 8,262.90 185.66 (2.20%)
Nasdaq 1,512.39 34.07 (2.20%)
S&P 500 849.51 22.28 (2.56%)
10-Yr Bond 2.216% 0.081

NYSE Volume 511,486,406.25
Nasdaq Volume 133,428,843.75

[Roland99]

52. 10:14am - Kinda holding at a steady loss of blood.

DJIA 8,258.92 -189.64 -2.24%
Nasdaq 1,512.35 -34.11 -2.21%
S&P 500 849.44 -22.35 -2.56%
Global Dow 1,435.77 -36.17 -2.46%
Dow Util 356.38 -6.85 -1.89%
NYSE 5,365.30 -173.54 -3.13%
AMEX 1,363.90 -41.10 -2.93%
Russell 2000 462.56 -11.23 -2.37%
Semcond 204.41 -6.26 -2.97%
Gold future 819.00 -1.70 -0.21%
30-Year Bond 2.91% -0.11 -3.58%
10-Year Bond 2.18% -0.12 -5.18%

[UpInArms]

51. 10:10 EST stablilized in the red

Dow 8,261.47 187.09 (2.21%)
Nasdaq 1,513.58 32.88 (2.13%)
S&P 500 850.23 21.56 (2.47%)
10-Yr Bond 2.191% 0.106

NYSE Volume 934,894,062.5
Nasdaq Volume 275,352,125

10:00 am : Crude oil futures have reversed course to trade 0.7% lower at $37.50 per barrel. It hovered around $39 per barrel in overnight trading.

The latest weekly inventory data is due at the bottom of the hour. The current consensus estimate calls for a build of roughly 2.5 million barrels.

Natural gas is trading 2.8% lower at $5.05 per contract after spending the night near the flat line

Metals are showing a bit of weakness as well. Gold was recently trading hands near $818.00 per ounce, down 0.3%. Silver, meanwhile, is trading near $10.54 per ounce, which reflects a loss of 1.3%.

Early movers: Trading up: LAB +11.4%, AEPI +11.3%, EROC +10.4%, FAZ +10.3%, MEG +8.8%, SKF +7%, SRS +6.4%, SMN +5.4%... Trading down: STSA -38.8%, FBN -16.6%, FNB -16.3%, ITG -14.6%, BG -14.2%, BCS -12%, IIIN -11.7%, SI -11.6%, ICON -11.6%, RACK -9.7%, HBAN -9.6%, HBC -9.5%, FAS -9.4%, DB -8.5%.

Commodities' downward move follows comes amid continued strength in the U.S. dollar. According to the Dollar Index, the greenback has gained roughly 2.3% this week.

Separately, November business inventories slipped 0.7%, which is worse than the 0.5% decline that was expected. Inventories declined 0.6% the month before.DJ30 -179.68 NASDAQ -32.38 SP500 -21.93 NASDAQ Dec/Adv/Vol 1820/437/208 mln NYSE Dec/Adv/Vol 2560/250/149 mln

[Hugin]

54. New Pool Results... (so far)

"The next pool calls for your prediction on where the Dow will be on Bush's last day and minute, 1/20/09, at 11:59am
Friday by the close is the deadline for submitting your target number."

Entries:

Ozy - No choice yet.
radfringe - 8,243.74
Prag - Up-side: 8837.94, Down-side: 8158.10
Ghost Dog - 7,970 (Playing Cassandra)
AnneD - Still waiting for Jimmy.

Are there any I missed?

[MsLeopard]

59. Please put me in for

7777.77 - the Vegas close. :shrug:

[Hugin]

60. Good choice.

It would do that... Wouldn't it? ;)

[CatholicEdHead]

63. 7863.56

[Ghost Dog]

82. Looks like I'm not the only

Cassandra. :(

[ozymandius]

86. I'm in at $8016.73

Now watch the markets zoom.

[DemReadingDU]

91. I'd like 8080.80

:)

[Hugin]

92. Current Pool Entries as of COB 1/14/2009.

The Pool calls for your prediction on:

Where the Dow will be on Bush's last day and minute, 1/20/09, at 11:59am.

Note: Friday 1/16/2009 by the Market Close 16:00 ET is the deadline for submitting your target number. :o

Entries:

Ozy - 8016.73
radfringe - 8,243.74
Prag - Up-side: 8837.94, Down-side: 8158.10
Ghost Dog - 7,970 (Playing Cassandra)
AnneD - Still waiting for Jimmy.
MsLeopard - 7777.77 (Casino Style.)
CatholicEdHead - 7863.56
DemReadingDU - 8080.80 (A nice round number.)

Anyone else?

[UpInArms]

93. okay, I want in too!

it was 10,578.24 on the day that the squatter took over

it will be 7,578.24 on the day the squatter leaves

only a loss of a mere 3,000 points - isn't that something like 3 trillion in losses on the stocks?

hmmmm....

better minds than mine will have to answer that

:hi:

[Hugin]

95. Pool updated to include UIA.

The Pool calls for your prediction on:

Where the Dow will be on Bush's last day and minute, 1/20/09, at 11:59am.

Note: Friday 1/16/2009 by the Market Close 16:00 ET is the deadline for submitting your target number. :o

Entries:

Ozy - 8016.73
radfringe - 8,243.74
Prag - Up-side: 8837.94, Down-side: 8158.10
Ghost Dog - 7,970 (Playing Cassandra)
AnneD - Still waiting for Jimmy.
MsLeopard - 7777.77 (Casino Style.)
CatholicEdHead - 7863.56
DemReadingDU - 8080.80 (A nice round number.)
UpInArms - 7,578.24 (Wants that in Trillions.)

Anyone else?

:hi:

[PassingFair]

97. 7500.00

Please.

:hi:

[natrat]

96. well if it breaks its gonna be fast so put me down for 6248

[Robbien]

45. Hedge Fund to repay investors in securities not cash

GoldenTree Asset Management, a credit hedge fund, is offering in­vestors who want to withdraw money securities instead of cash, triggering protests from those who in many cases lack means to dispose of such instruments, the FT reported. The fund, which specialises in investing in complex debt ins­truments, had about $10bn under management last year. But losses and redemptions could leave it with half as much if investors made good on withdrawal requests, a person with direct knowledge of the matter told the FT. GoldenTree was down more than 30 per cent in 2008 and is facing demands from investors for about 25 per cent to 30 per cent of their money, the person said.

http://ftalphaville.ft.com/blog/2009/01/14/51112/fund-to-repay-investors-in-securities-not-cash/

[UpInArms]

48. Fraud hits Satyam, probe widens

http://www.reuters.com/article/ousiv/idUSTRE50D1D920090114?sp=true

HYDERABAD, India (Reuters) - India's fraud-hit Satyam Computer Services Ltd named two audit firms on Wednesday to restate its results after being caught in the country's biggest corporate scandal, threatening its survival.

KPMG and Deloitte will restate results prepared by Satyam's previous auditor, the Indian unit of PricewaterhouseCoopers (PWC), which said its opinions on the outsourcing firm's financial statements may be unreliable, given the revelations of fraud announced by Satyam's founder and chairman Ramalinga Raju.

"We placed reliance on management controls over financial reporting, and the information and explanations provided by the management...," Price Waterhouse said in a January 13 letter to Satyam released on Wednesday.

Due to Raju's confession, PWC said its opinions on the financial statements "may be rendered inaccurate and unreliable." It audited Satyam from the quarter ended June 2000 to the quarter ended Sept 2008.

One of Satyam's new government-appointed board members, C. Achutan, told Indian media KPMG and Deloitte would restate results as soon as possible, though a formal appointment of auditors needs the consent of shareholders. No timeframe was given for a shareholder meeting.

...more...

[antigop]

55. Unreal...Senate Republicans want to boost the economy by....

a two-year suspension of payroll taxes. CAN YOU BELIEVE THIS??

http://www.nytimes.com/2009/01/14/us/politics/14stimulus.html?_r=1

But it was also clear that tough negotiations lie ahead. Mr. Obama has told Republicans he is open to suggestions, and Senator Mitch McConnell of Kentucky, the Republican leader, said his conference would urge Mr. Obama to consider a two-year suspension of payroll taxes to benefit individuals and corporations.

Mr. McConnell said Senate Republicans were intensely interested in the idea, which was presented at their own weekly lunch by Lawrence B. Lindsey, who was President Bush’s top economic adviser from 2001 to 2002, and John H. Makin, an economist at the American Enterprise Institute for Public Policy Research.

Hey, you idiots...how about making sure people have J-O-B-S?

[antigop]

56. Ex-UBS wealth management boss declared a fugitive

http://financialweek.com/apps/pbcs.dll/article?AID=/20090114/REG/901149997/1036

The former head of UBS AG’s wealth management business, Raoul Weil, was formally declared a fugitive on Tuesday after failing to surrender to U.S. authorities on charges of conspiring to help wealthy Americans hide assets from U.S. tax authorities.

Prosecutors in Miami released a copy of a judge’s order placing Mr. Weil on the court’s fugitive list, but said they would have no further comment.

An indictment unsealed in November alleged that Mr. Weil and other unidentified bankers conspired to help 17,000 Americans hide $20 billion of assets in Swiss bank accounts in order to avoid paying U.S. taxes.

At the time, an attorney for Mr. Weil said he was innocent and called the indictment against him “totally unjustified.” That attorney, Aaron Marcu, could not immediately be reached for comment on Tuesday night.

The charges were a major escalation of a U.S. investigation into UBS, Switzerland’s biggest bank.

[Dr.Phool]

61. Take a look in the trunk of Phil Gramm's car.

[Demeter]

84. Is Raoul a US Citizen?

[spotbird]

57. It's been a while since my stomach dropped

when I opened this thread. I'd pretty much stopped watching it. Now I remember why.

[CatholicEdHead]

64. It has been tough and depressing to read the past few months

It is the best thread on the net and all of DU now, no matter how rough it reads. Ozy et al have said they do not intentionally put bad news out and as things turn around they will be the first to post the positive rebound signs and stories.

[spotbird]

74. Oh, don't misunderstand

it isn't this thread in particular I've been avoiding, it's market news in general.

The folks who run this shop do a wonderful job, no doubt about it.

[ozymandius]

88. Thanks.

Sarcasm reigns here.

[Festivito]

62. Debt: 01/12/2009 10,609,790,681,008.44 (UP 32,113,401.27) (Very little change.)

(Little movement lately. (I'm working nights and the hospital internet seems to stop posting to DU. At least I can read DU. Good day to all.))

= Held by the Public + Intragovernmental(FICA)
= 6,289,228,157,982.89 + 4,320,562,523,025.55
DOWN 1,098,982,842.59 + UP 1,131,096,243.86

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in 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 a 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)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 20 reports in the last 30 to 31 days.
The average for the last 20 reports is 636,097,154.07.
The average for the last 30 days would be 424,064,769.38.
The average for the last 31 days would be 410,385,260.69.
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$/day.
There were 70 reports in 104 days of FY2009 averaging 8.36B$ per report, 5.63B$/day.

PROJECTION:
GWB** must relinquish the presidency in 8 days.
By that time the debt could be between 10.6 and 10.7T$.
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)
01/12/2009 10,609,790,681,008.40 GWB (UP 4,881,594,884,826.83 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 585,065,784,096.00 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/19/2008 -000,369,261,235.72 ---
12/22/2008 -000,588,542,244.94 --- Mon
12/23/2008 +000,074,940,615.00 ------------*******
12/24/2008 -000,121,597,338.38 ---
12/26/2008 -036,328,594,643.92 -
12/29/2008 -000,737,189,520.41 --- Mon
12/30/2008 +000,055,730,362.68 ------------*******
12/31/2008 +046,553,280,763.13 ------------**********
01/02/2009 -049,252,670,832.20 -
01/05/2009 -000,912,747,082.07 --- Mon
01/06/2009 -000,344,326,906.71 ---
01/07/2009 -000,314,429,077.84 ---
01/08/2009 -027,599,431,464.26 -
01/09/2009 -000,568,123,287.98 ---
01/12/2009 -001,098,982,842.59 -- Mon

-71,551,944,736.21 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $945,158,877,749.37 in last 116 days.
That's 945B$ in 116 days.
More than any year ever, except last year, and it's 93% of that highest year ever only in 116 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 116 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(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=3687602&mesg_id=3689067

[Festivito]

90. Debt: 01/13/2009 10,613,904,888,048.13 (UP 4,114,207,039.69) (Mostly FICA.)

(Little movement lately, except for FICA stuff.)

= Held by the Public + Intragovernmental(FICA)
= 6,289,189,388,739.05 + 4,324,715,499,309.08
DOWN 38,769,243.84 + UP 4,152,976,283.53

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in 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 a 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)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 21 reports in the last 30 to 32 days.
The average for the last 21 reports is 801,721,434.33.
The average for the last 30 days would be 561,205,004.03.
The average for the last 32 days would be 526,129,691.28.
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$/day.
There were 71 reports in 105 days of FY2009 averaging 8.30B$ per report, 5.61B$/day.

PROJECTION:
GWB** must relinquish the presidency in 7 days.
By that time the debt could be between 10.6 and 10.7T$.
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)
01/13/2009 10,613,904,888,048.10 GWB (UP 4,885,709,091,866.53 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 589,179,991,135.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/22/2008 -000,588,542,244.94 --- Mon
12/23/2008 +000,074,940,615.00 ------------*******
12/24/2008 -000,121,597,338.38 ---
12/26/2008 -036,328,594,643.92 -
12/29/2008 -000,737,189,520.41 --- Mon
12/30/2008 +000,055,730,362.68 ------------*******
12/31/2008 +046,553,280,763.13 ------------**********
01/02/2009 -049,252,670,832.20 -
01/05/2009 -000,912,747,082.07 --- Mon
01/06/2009 -000,344,326,906.71 ---
01/07/2009 -000,314,429,077.84 ---
01/08/2009 -027,599,431,464.26 -
01/09/2009 -000,568,123,287.98 ---
01/12/2009 -001,098,982,842.59 -- Mon
01/13/2009 -000,038,769,243.84 ----

-71,221,452,744.33 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $949,273,084,789.06 in last 117 days.
That's 949B$ in 117 days.
More than any year ever, except last year, and it's 93% of that highest year ever only in 117 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 117 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(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=3689085&mesg_id=3689647

[Hugin]

66. Nortel Files for Bankruptcy (BW)

"The recession hits Nortel, the largest North American maker of telecommunications equipment, as the company announces Chapter 11 plans"

By Tom Giles and Arik Hesseldahl

"Plunging demand for phone gear and a global financial crisis finally caught up with Nortel Networks (NT). The largest North American maker of telecommunications equipment said on Jan. 14 that it's filing for bankruptcy protection in Canada, the U.S., and in Europe.

The company said it would seek creditor protection under the CCAA process in Canada and Chapter 11 bankruptcy proceedings in the U.S. Filings in Europe were to be forthcoming. The company said it had sufficient cash on hand—$2.4 billion—to fund ongoing operations, and the company's business would continue without interruption. Affiliates in Asia, the Caribbean, and Latin America are not included in the filing.

Under Chief Executive Mike Zafirovski, the company embarked on an ambitious turnaround in 2005 that involved selling off businesses and eliminating jobs.

But as the recession took hold, customers delayed telecom gear purchases, sending Nortel's sales into a tailspin. Competition from rivals including Huawei also took a toll. "Nortel must be put on a sound financial footing once and for all," Zafirovski said in a statement. "These actions are imperative so that Nortel can build on its core strengths and become the highly focused and financially sound leader in the communications industry."

<snip>

Bankruptcy by Choice
Nortel had $2.6 billion in cash and $4.5 billion in debt at the end of September and has been burning about $300 million to $400 million in cash per quarter, says Nomura analyst Richard Windsor. The company might have been able to "stumble along for about a year or two" before being forced into bankruptcy, he says. "This action has not been forced. The idea is to do something decisive rather than be broken up and sold off at extremely distressed valuations."

<snip>

Read the whole article @ http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090114_375628.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis

[Ghost Dog]

77. Canada government pledges to help Nortel

OTTAWA, Jan 14 (Reuters) - The Canadian government pledged on Wednesday to help Nortel Networks Corp (NT.TO) (NT.N), North America's biggest telephone equipment maker and major source of Canadian R&D spending, as it seeks to emerge from bankruptcy protection.

"The government of Canada appreciates the importance of the telecommunications industry to our economy and will continue to work with Nortel during its restructuring through Export Development Canada (EDC)," Industry Minister Tony Clement said in a statement.

EDC, a government agency, has agreed to provide up to C$30 million ($24 million) in short-term financing through an existing bonding facility.

In addition, Clement said EDC is open to discussing financing for Nortel in conjunction with other financial institutions.

The Conservative government has traditionally opposed using public money to rescue ailing companies but announced C$4 billion in emergency loans to the auto industry last month and has said extraordinary times require extraordinary measures.

/... http://www.reuters.com/article/marketsNews/idCAN1446286920090114?rpc=44

[Tandalayo_Scheisskopf]

71. I have a question:

In checking the energy markets today, I noticed that RBOB is up. Again. Even with healthy stocks and lowering crude prices.

What the hell is going on? Are banks speculating in the energy markets again, this time with our TARP dollars?

[Hugin]

75. That's my theory.

They're using TARP money to drive up gasoline prices via speculation.

There's no other explanation given the surpluses.

And until Congress gets and publicly posts an accounting of where the TARP money went... I'm sticking with my theory.

[Demeter]

85. It's a Holiday Weekend--Gas Up Even in Depression, Michigan!

One thing I can report---people aren't taking off for the weekend, or a month of sun in the depths of winter, like they did even last year. People are BROKE, the Economy is BROKEN, and if BushCo doesn't get the full treatment and reward for criminal behavior, the Civil War will BREAK OUT!

[Ghost Dog]

78. Global Financial Governance: The Fund could tame unfair competitive devaluation

By Jessica Einhorn

Published: January 14 2009 19:52 | Last updated: January 14 2009 19:52

<snip>

The severity of the present crisis is an opportunity to remedy deep-seated problems. A fundamental (not proximate) cause of our economic plight is the imbalance in current accounts – in particular between the US and China – during the past decade. We can choose our narrative tone – for example, that US spending saved the world from a decline in growth as the east Asians and some others built up their reserves through export-led expansion.

Alternatively, the reckless US financial system and irresponsible American consumers accommodated the Chinese mercantilism as the dollar became overvalued and the Chinese built up reserves and maintained an undervalued exchange rate. Of course, both are true. But there is a bigger truth.

The global system as governed by the International Monetary Fund is asymmetric in its approach to deficit versus surplus countries. The IMF has an important operational function – to provide financing to deficit countries that experience a crisis in their balance of payments because of unavailability of external finance in a convertible currency. While the Fund also has provisions prohibiting the manipulation of exchange rates to achieve competitive advantage (what we call a competitive devaluation), there is no operating approach to redress this distortion to fair trade.

...

We should consider a solution that would rely on both the IMF and the World Trade Organisation for judgment and implementation. If a country runs a surplus on its current account for some period (more than a year) and is simultaneously intervening to purchase foreign exchange at a particular percentage of gross national product, then that country should come up for automatic consideration at the IMF. In order to strengthen political will for action, the presumption should be that a country that sustains the scope and pattern of trade surplus and reserves described in the guidelines is achieving a distortion of trade that should be remedied.

Unless an exception is voted by a majority in the Fund, a recommendation to the WTO would follow in favour of remedial action (such as a surcharge on the exports of the named country). This would be consistent with the existing agreements between the two institutions, which gives precedence to the IMF in determinations on foreign exchange matters and provides for the Fund to inform the WTO regarding measures that are inconsistent with Fund articles. All IMF members would be governed by the policy, which would not be subject to a blocking veto in its implementation.

...

Tackling this problem would provide an excellent context to address the long-standing issue of reapportioning quota shares (the system that determines votes at the IMF). These negotiations have been going on for years with little redress. If the big industrial countries had something at stake in curbing the excesses of currency imbalance, the prospects might be more positive.

Indeed, if the US would agree to surrender its hold on the presidency of the World Bank, then there would be a package of reform worthy of the effort. The Europeans give up shares, the Asians and others give up mercantilism, and the US gives up a vestige of unipolarism. The IMF and the World Bank gain legitimacy and the Fund resolves a dilemma that haunts its fundamental mission. A grand slam for international financial governance.

The writer is dean of the School of Advanced International Studies, Johns Hopkins University

/... http://www.ft.com/cms/s/0/5cce475a-e262-11dd-b1dd-0000779fd2ac,dwp_uuid=9c33700c-4c86-11da-89df-0000779e2340.html

[fedsron2us]

80. Strangely not that far from the ideas Keynes was promoting after World War 2

http://www.guardian.co.uk/commentisfree/2008/nov/18/lord-keynes-international-monetary-fund

Of course, these are the great mans real ideas rather than the fantasy policies that are attributed to him by every free market dickhead on the planet

[Ghost Dog]

81. Indeed. This particular piece does appear directed against China, though,

to which this appears to be a response:

US to blame for financial crisis, says China

Source: Agence France-Presse -->DU thread: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3690129

US mistakes are the root cause of the global financial crisis, a senior Chinese central bank official said overnight, rejecting criticism of China's high savings rate and booming trade surplus.

"Errors made in US economic policy-making, financial supervision and markets are the ultimate causes of the crisis," said Zhang Jianhua, research head at the People's Bank of China, in an opinion piece carried by the People's Daily.

Some observers in the West are blaming China and other nations' high savings rate and trade surplus for fuelling excess consumption and asset bubbles in the United States, he said.

"Such views are ridiculous and irresponsible in the extreme," Mr Zhang wrote in the harshly worded piece in the Communist Party's mouthpiece.

Read more: http://www.news.com.au/business/story/0,23636,24915240-14334,00.html?from=public_rss

Edit: Note the way positions, and therefore interests, are somewhat reversed, today. The US is now the deficit nation.

Here's the summary of Keynes's proposal (from George Monbiot's Guardian article, your link above):

...

He proposed a global bank, which he called the International Clearing Union. The bank would issue its own currency - the bancor - which was exchangeable with national currencies at fixed rates of exchange. The bancor would become the unit of account between nations, which means it would be used to measure a country's trade deficit or trade surplus.

Every country would have an overdraft facility in its bancor account at the International Clearing Union, equivalent to half the average value of its trade over a five-year period. To make the system work, the members of the union would need a powerful incentive to clear their bancor accounts by the end of the year: to end up with neither a trade deficit nor a trade surplus. But what would the incentive be?

Keynes proposed that any country racking up a large trade deficit (equating to more than half of its bancor overdraft allowance) would be charged interest on its account. It would also be obliged to reduce the value of its currency and to prevent the export of capital. But - and this was the key to his system - he insisted that the nations with a trade surplus would be subject to similar pressures. Any country with a bancor credit balance that was more than half the size of its overdraft facility would be charged interest, at a rate of 10%. It would also be obliged to increase the value of its currency and to permit the export of capital. If, by the end of the year, its credit balance exceeded the total value of its permitted overdraft, the surplus would be confiscated. The nations with a surplus would have a powerful incentive to get rid of it. In doing so, they would automatically clear other nations' deficits.

When Keynes began to explain his idea, in papers published in 1942 and 1943, it detonated in the minds of all who read it. The British economist Lionel Robbins reported that "it would be difficult to exaggerate the electrifying effect on thought throughout the whole relevant apparatus of government ... nothing so imaginative and so ambitious had ever been discussed". Economists all over the world saw that Keynes had cracked it. As the Allies prepared for the Bretton Woods conference, Britain adopted Keynes's solution as its official negotiating position.

But there was one country - at the time the world's biggest creditor - in which his proposal was less welcome. The head of the American delegation at Bretton Woods, Harry Dexter White, responded to Keynes's idea thus: "We have been perfectly adamant on that point. We have taken the position of absolutely no." Instead he proposed an International Stabilisation Fund, which would place the entire burden of maintaining the balance of trade on the deficit nations. It would impose no limits on the surplus that successful exporters could accumulate. He also suggested an International Bank for Reconstruction and Development, which would provide capital for economic reconstruction after the war. White, backed by the financial clout of the US treasury, prevailed. The International Stabilisation Fund became the International Monetary Fund. The International Bank for Reconstruction and Development remains the principal lending arm of the World Bank.

...

[Demeter]

87. At This Point, China Has Little to Do With the US Economy

This is our own, personal, national little Death Spiral, brought to you by those fine folks at BushCo.

China's got problems of her own, which we caused, partly. Although Europe did their part, too.

[ozymandius]

89. End of today's dump cycle.

Dow 8,200.14 Down 248.42 (2.94%)
Nasdaq 1,489.64 Down 56.82 (3.67%)
S&P 500 842.62 Down 29.17 (3.35%)
10-Yr Bond 2.213% Down 0.084
NYSE Volume 6,180,646,500
Nasdaq Volume 1,978,351,500

4:30 pm : Sellers took control of the stock market early on, driving losses for the third time in four sessions. The decline was deep and broad as 95% of the companies in the S&P 500 finished lower, while all 30 Dow components logged a loss in their worst performance since Dec. 1.

The lack of buying in the broader market reflects waning confidence in corporate profits. Revived profit concerns have been particularly strong in the financial sector (-5.7%), which has fallen nearly 13% during over the last five sessions.

The concerns appear justified as Deutsche Bank (DB 28.98, -2.92) announced it expects to post a fourth quarter loss of 4.8 billion euros, or $6.3 billion. The bank also slashed its dividend to 0.5 euros from 4.50 euros.

Word that Citigroup (C 4.53, -1.37) and Morgan Stanley (MS 17.19, -1.67) are joining their brokerage businesses did little to relieve the sector. Morgan Stanley will pay Citi $2.7 billion for a 51% stake in the venture, but many believe Citi will use the funds to stem ongoing losses. Citi is expected to post a loss when it reports its quarterly results Friday. Shares of C fell to their lowest level since their November low.

Disappointing economic data also weighed on sentiment this session. Advance December retail sales dropped 2.7% month-over-month. Excluding autos, sales were down 3.1%. Though the consensus estimate called for a drop, actual results were much worse than expected. The consensus called for a 1.2% decline in retail sales, and a 1.4% decline when excluding autos.

Softer consumer spending has caused such companies as Under Armour (UA 19.40, -3.25) and Tiffany (TIF 21.95, -0.05) to guide their earnings estimates below analysts' consensus forecast. The two were among the latest companies to cut their outlooks.

Energy companies also fell under stiff selling pressure this session. The sector dropped 4.3% amid weakness in oil and gas refiners (-6.8%) and oil and gas equipment companies (-6.3%). Integrated oil companies fell 3.6%.

In addition to the broad wave of selling, energy stocks were also hurt by falling crude prices. Crude closed roughly 1% lower at $37.40 per barrel. It had been down more than 4.0%, which was reached shortly after the latest inventory data revealed a build of 1.14 million barrels. Though a build of 2.5 million barrels was expected, rising inventory levels continue pointing toward softer demand amid stiff economic headwinds.

More than 1.4 billion shares traded hands on the NYSE this session. That was the most since Dec. 19. All three major indices closed at their lowest level in more than one month.DJ30 -248.42 NASDAQ -26.82 SP500 -29.17 NASDAQ Adv/Vol/Dec 477/1.95 bln/2263 NYSE Adv/Vol/Dec 318/1.42 bln/2793

[Dr.Phool]

98. Early Asian markets down approx. 4% at 9:00pm.

Hang Seng a little more.
Nikkei a little less.