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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:49 AM
Original message
STOCK MARKET WATCH, Wednesday January 21
Source: du

STOCK MARKET WATCH, Wednesday January 21, 2009

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


AT THE CLOSING BELL ON January 20, 2009

Dow... 7,949.09 -332.13 (-4.01%)
Nasdaq... 1,440.86 -88.47 (-5.78%)
S&P 500... 805.22 -44.90 (-5.28%)
Gold future... 855.20 +15.30 (+1.82%)
30-Year Bond 2.95% +0.05 (+1.83%)
10-Yr Bond... 2.35% +0.04 (+1.78%)




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


Market Conditions During Trading Hours





GOLD,EURO, YEN, Loonie and Silver












Read more: du
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:52 AM
Response to Original message
1. Market WrapUp
The Obama Administration
Confronting an Unprecedented Tsunami

BY FRANK BARBERA, CMT

It has been a long time since a US President took office under such extreme economic conditions. In the last 100 years, we have seen FDR take office amid the Great Depression, Gerald Ford take office in the wake of Watergate, and Ronald Reagan take office in the midst of a severe recession and energy crisis. On this occasion, there can be no doubt that it is refreshing to have such an articulate, and well spoken intellect taking over the helm of the US government at a time when so many major decisions are in the offing.

In contemplating the historic events of today, I thought I would take a little retrospective at the last 100 years of US presidents during the time for which there have been actively traded financial markets. Prior to 1885, it is hard to gauge the economic/financial conditions under which a new president was inaugurated as the stock market did not exist. In my view, President Barack Obama is facing arguably the worst set of circumstances ever seen, ever confronted by a new US President or, at the very least, the second worst when it comes to the state of the nation and financial markets in the post industrial revolution era.

Strangely enough, the only other President who took office under the same kind of miserable circumstances was Gerald Ford in early 1974. Now we know that statement is a bit controversial right off the bat, but bear with me for a moment while I make the case. A number of you have probably been watching the media today and have seen the Obama and FDR comparisons, which have been airing quite regularly these last few weeks. In many respects there are clearly valid comparisons to be made. Both men had to cope with extremely bad economic circumstances upon taking office, and both men employed huge Keynesian budget deficit spending in order to stimulate the economy out of contraction and put people back to work. Obamas Presidency is already shaping up as a kind of New Deal Part II. Dwelling on the comparison a bit further, it is true that when FDR was inaugurated for the first time on March 4th, 1933, the country was still mired in the Great Depression. At that time, virtually 25% of the workforce was unemployed, with Industrial Production down by more then 50% since the peak in 1929. On his inauguration day, two million people in the US were homeless and over 9,000 banks had failed between 1929 and 1933. During that time, $140 billion dollars disappeared as a result of the bank failures or roughly 145% of a single year's GDP.

http://www.financialsense.com/Market/wrapup.htm
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:55 AM
Response to Original message
2. no goobermental reports today n/t
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:58 AM
Response to Original message
3. Oil falls below $41 amid grim economic news
SINGAPORE Oil prices hovered below $41 a barrel Wednesday in Asia as dismal economic news pointed to deteriorating crude demand.

Light, sweet crude for March delivery was down 12 cents at $40.72 a barrel by midday in Singapore in electronic trading on the New York Mercantile Exchange. The contract fell $1.53 overnight to settle at $40.84.

...

The deteriorating global economic outlook means forecasts for crude demand are being slashed.

The International Energy Agency on Friday cut its global oil demand forecast by one million barrels a day to 85.3 million. The IEA said it expected 2009 world crude demand to drop 0.6 percent after falling 0.3 percent last year. Its forecast assumes global economic growth of 1.2 percent this year.

...

In other Nymex trading, gasoline futures rose 0.69 cent to $1.15 a gallon. Heating oil gained 1.57 cents to $1.39 a gallon while natural gas for February delivery was steady at $4.65 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:03 AM
Response to Reply #3
7. Yet gasoline and heating oil continue their mysterious rise.
Yeesh. :eyes:
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radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:13 AM
Response to Reply #7
10. the excuse now
cost of actually producing gas/heating oil is more expensive

I guess the $40brazillion dollar profits they earned last year wasn't enough
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:00 AM
Response to Original message
4. GM official says cash could run out by March 31
DETROIT (AP) -- The target date for General Motors Corp. to get its second installment of government loans passed last week, but a top company executive says he expects the money to arrive in the next several days.

Fritz Henderson, GM's president and chief operating officer, said without the second installment of $5.4 billion, the company would run out of cash long before March 31.

In December, the Treasury Department authorized $13.4 billion in loans for GM and another $4 billion for Chrysler LLC to keep both automakers out of bankruptcy.

GM received $4 billion late last year and was to get $5.4 billion Jan. 16 and another $4 billion on Feb. 17, the day it is to submit its plan to show the government how it will become viable.

Henderson told the Automotive News World Congress in Detroit that the money is critically needed to pay its bills. He attributed the delay in receiving the second installment to the Treasury Department's workload and the change in administrations.

http://finance.yahoo.com/news/GM-official-says-cash-cou...
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:07 AM
Response to Reply #4
8. Pimco Quits GM Bondholder Group After Reneging on GMAC Deal (Bloomberg)
By Caroline Salas and Kathleen Hays

"Jan. 21 (Bloomberg) -- Pacific Investment Management Co., manager of the worlds biggest bond fund, resigned from an investor committee negotiating with General Motors Corp. to exchange debt for shares.

The decision by Pimco comes about a month after it reneged on a Dec. 15 agreement to join bondholders in GMAC LLCs $38 billion debt swap. The 10-member GM bondholder committee overlaps with the GMAC group, including San Mateo, California- based Franklin Resources Inc. and Fidelity Investments of Boston, said a person with knowledge of the situation who declined to be identified because the members havent been publicly announced.

Were just not good committee members, Bill Gross, Pimcos co-chief investment officer, said in an interview yesterday from his Newport Beach, California-based office. We have the interests of our clients more at heart than the interests of particular corporations or even the government, I guess, so its best that we simply look at the situation from afar as opposed to from inside.

The withdrawal means Pimco may gain less information from other investors or have a smaller say in talks with Detroit- based GM, which needs to cut two-thirds of its $27.5 billion in unsecured public debt. GM is negotiating with the committee of creditors as part of a government bailout of the biggest U.S. carmaker."

More on this... http://www.bloomberg.com/apps/news?pid=20601087&sid=am....

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Festivito Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:01 AM
Response to Original message
5. Debt: 01/16/2009 10,628,881,485,510.23 (UP 1,172,731,818.74) (No Monday yet.)
(Bush is gone. Just a few days before his actions up to 1/20/09 account. I'm already breathing easier. Monday's report did not appear probably due to the changing of the guard.)

= Held by the Public + Intragovernmental(FICA)
= 6,308,564,856,414.67 + 4,320,316,629,095.56
DOWN 579,761,204.80 + UP 1,752,493,023.54

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

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 22 reports in the last 30 to 31 days.
The average for the last 22 reports is -76,137,154.07.
The average for the last 30 days would be -55,833,912.99.
The average for the last 31 days would be -54,032,819.02.
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$/day.
There were 74 reports in 108 days of FY2009 averaging 8.16B$ per report, 5.59B$/day.

PROJECTION:
GWB** must relinquish the presidency in less than 4 days from the date of this report.
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)
01/16/2009 10,628,881,485,510.20 GWB (UP 4,900,685,689,328.63 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: 604,156,588,597.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ----
01/14/2009 -000,515,208,818.51 ---
01/15/2009 +020,470,437,698.93 ------------**********
01/16/2009 -000,579,761,204.80 ---

-51,210,786,100.39 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $964,249,682,251.16 in last 120 days.
That's 964B$ in 120 days.
More than any year ever, except last year, and it's 95% of that highest year ever only in 120 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 120 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.ph...
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Festivito Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 07:10 AM
Response to Reply #5
89. Debt: 01/20/2009 10,626,877,048,913.08 (DOWN 2,004,436,597.15) (BHO at zero.)
(This starts the Obama era in daily debt reports. There is no Monday report, only Friday and Tuesday, Tuesday-inaugural day. Obama starts here at zero added to the debt.)

= Held by the Public + Intragovernmental(FICA)
= 6,307,310,739,681.66 + 4,319,566,309,231.42
DOWN 1,254,116,733.01 + DOWN 750,319,864.14

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.82, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
At the end of the workday of this report, there should be 305,646,943 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $34,768.47.
A family of three owes $104,305.41. And that is IN ADDITION to their mortgage.

ANALYSIS:
There were 20 reports in the last 30 to 32 days.
The average for the last 20 reports is 1,434,098,391.43.
The average for the last 30 days would be 956,065,594.28.
The average for the last 32 days would be 896,311,494.64.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 0 reports in 0 days of Obama's part of FY2009 averaging 0.00B$ per report, 0.00B$/day so far.
There were 75 reports in 112 days of FY2009 averaging 8.03B$ per report, 5.38B$/day.

PROJECTION:
There are 1,461 days remaining in this Obama 1st term.
By that time the debt could be between 11.9 and 18.5T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
01/20/2009 10,626,877,048,913.08 BHO (UP 0.00 so far since Obama 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: 602,152,152,000.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ----
01/14/2009 -000,515,208,818.51 ---
01/15/2009 +020,470,437,698.93 ------------**********
01/16/2009 -000,579,761,204.80 ---
01/20/2009 -001,254,116,733.01 -- Tue

-16,136,308,189.48 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $962,245,245,654.01 in last 124 days.
That's 962B$ in 124 days.
More than any year ever, except last year, and it's 95% of that highest year ever only in 124 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 124 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.ph...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:02 AM
Response to Original message
6. World stock markets down as bank jitters mount
HONG KONG (AP) -- World stock markets dropped Wednesday, with Japan's benchmark losing 2 percent, as concern that rising bank losses will cripple the world economy overshadowed the inauguration of President Barack Obama.

The downward lurch followed Wall Street, where investors returning from a holiday reacted with alarm to a rash of negative news about Western banks like Royal Bank of Scotland and sent key stock measures tumbling by more than 4 percent.

....

In Japan, the Nikkei 225 stock average dropped 164.15 points, or 2 percent, to 7,901.64, while Hong Kong's Hang Seng Index shed 381.19 points, or 2.9 percent, to 12,578.58.

Benchmarks in South Korea and India retreated about 2 percent or more, Singapore's index was down 1.6 percent and Australia's stock measure lost 1 percent. Shanghai's main stock gauge was off around 0.5 percent, while Taiwan's stock measure inched modestly higher.

As trading got underway in Europe, Britain's FTSE lost 1.8 percent, Germany's DAX shed 2.2 percent and France's CAC-40 was off 2.7 percent.

http://finance.yahoo.com/news/World-stock-markets-down-...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:09 AM
Response to Reply #6
9. Investors Dump Shares As Banking Fears Mount
NEW YORK, Jan. 20 -- At the dawn of the Obama presidency, the stock market could not shake its dejection over the rapidly deteriorating state of the banking industry.

....

The market's most recent bout of angst, which began with multibillion-dollar losses reported last week by Bank of America and Citigroup, intensified after Royal Bank of Scotland's forecast that its losses for 2008 could top $41.3 billion.

A collapse in bank stocks followed: State Street plunged 59 percent Tuesday, Citigroup fell 20 percent, and Bank of America lost 29 percent. Royal Bank of Scotland fell 69 percent in New York trading.

....

The shrinking value of bank stocks means the financial industry accounts for less than 10 percent of the Standard & Poor's 500 for the first time since 1992. At the end of 2006, banks made up 22 percent of the index.

http://www.washingtonpost.com/wp-dyn/content/article/20...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:33 AM
Response to Reply #9
32. "the entire financial sphere is suspected of being a giant black hole"
LEAP 2020 sees us entering a period of insolvency, including financial system insolvency:

...the situation prevailing today throughout the entire global financial system, a large part of the world economy and all the economic players (including States) who based their growth on debt in the past years. The crisis translates and magnifies a problem of global insolvency. The world is becoming aware of the fact that it is a lot poorer than it used to believe in the last decade. And 2009 is the year when all the economic players must try to assess their real level of solvency, knowing that many assets are still losing value. Moreover a growing number of investors no longer trust the traditional instruments and indicators of measurement. Quoting agencies have lost all credibility. The US Dollar is just a fiction of international monetary unit and many countries are striving to get away from it as quickly as possible (6). Thus, quite rightly, the entire financial sphere is suspected of being a giant black hole.


Roubini: Credit Crisis Losses Could Hit $3.6 Trillion January 20, 2009 10:36 AM ET At a conference in Dubai, NYU's Nouriel Roubini said credit crisis losses could hit $3.6 trillion, up from $1 trillion worth of writedowns and losses estimated by Bloomberg to have already roiled the global financial system.

... Roubini says that if losses are really as large as he fears it means the U.S. banking system is effectively insolvent because it starts with a capital of $1.4 trillion. This is a systemic banking crisis. He also warns the disease is spreading to Europe, where the Royal Bank of Scotland Group faces an estimated $41 billion loss. Roubini also said the global slowdown will keep oil prices in the $30-$40 a barrel range this year, and he predicted commodities would fall another 15-20 percent from current levels...


So, is the money just vanishing down a black hole, vapourising, since the globalised financial system was sitting on a bubble inflated by leverage and exotic toxic instruments? And/Or are certain or incertain parties taking advantage of the situation and making killings, resulting in an unprecedented concentration of private wealth"?

( Cross post: http://www.democraticunderground.com/discuss/duboard.ph... )
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:14 AM
Response to Original message
11. Geithner Faces Senate Grilling on Taxes, Financial Rescue Plans
Jan. 21 (Bloomberg) -- Timothy Geithner faces a grilling in Congress over why, after underpaying his taxes, lawmakers should trust him with a $700 billion rescue fund as Treasury secretary in the worst economy since the Great Depression.

The Senate Finance Committee today is likely to demand answers on issues ranging from Geithners tax troubles to his solutions for broken U.S. financial markets. While few lawmakers question Geithners ability, the missteps with the Internal Revenue Service give him an extra hurdle to clear before an expected Senate vote this week to confirm his nomination.

Market turmoil and the 13-month recession so far are outweighing senators concerns about the tax returns of the man nominated to rebuild the U.S. economy. He retains strong backing among Democrats, and even critics say his experience as president of the Federal Reserve Bank of New York has readied him to be President Barack Obamas economic policy chief.

....

For Geithner, 47, the hearing will also serve as his first opportunity to begin outlining the Obama administrations plan for the devastated financial industry, while providing support for average Americans who have lost homes or jobs. Lawmakers say they want to hear a comprehensive plan detailing how Geithner will deploy the remaining $350 billion of the Troubled Asset Relief Program.

http://www.bloomberg.com/apps/news?pid=20601068&sid=ajw...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 06:38 PM
Response to Reply #11
85. Geithner Not Squeaky Clean Obama-style Material
Get the hook. Next!
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:19 AM
Response to Original message
12. Cox Quits at SEC, Leaves Schapiro to Restore Clout After Madoff
Jan. 21 (Bloomberg) -- Christopher Cox stepped down as U.S. Securities and Exchange Commission chairman, leaving behind a demoralized agency that failed to spot Bernard Madoffs alleged fraud and had its role diminished by the collapse of Bear Stearns Cos. and Lehman Brothers Holdings Inc.

His resignation took effect yesterday, agency spokesman John Nester said. During Coxs 3 1/2-year tenure, the SEC has been criticized by lawmakers, investors and its own inspector general as lacking aggressiveness and being deferential to Wall Street banks. President Barack Obama, a Democrat, picked Mary Schapiro, the head of the U.S. brokerage industrys self- regulator, to succeed the Republican Cox.

....

The agency lost clout in March when the Federal Reserve rescued Bear Stearns and began lending to and examining investment banks regulated by the SEC. Its domain shrank further in September after Lehman declared bankruptcy, Merrill Lynch & Co. sold itself to Bank of America Corp., and Goldman Sachs Group Inc. and Morgan Stanley became Fed-regulated commercial banks.

--

Another blow came in December when Cox, 56, admitted the SEC missed Madoffs alleged $50 billion Ponzi scheme even though it had received credible and specific complaints about the New York-based money manager for at least a decade.

http://www.bloomberg.com/apps/news?pid=20601103&sid=axZ...
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lonestarnot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:24 AM
Response to Reply #12
31. Well this is good news, no?
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:37 AM
Response to Reply #31
33. Sure. But who heads the SEC in the interim?
Confirmation sessions take a while, no?
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Robbien Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:28 AM
Response to Reply #33
38. One of Cox's subordinates is to be named acting chair

Since Cox set up the SEC to treat businesses as their clients, this acting chair probably has the same mindset.

So no change until Shapiro comes in. Shapiro also believes she should be protecting business but is willing to be open to maybe negotiating some terms a little more favorable to shareholders. In other words she has promised to be "moderate".
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Best_man23 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:08 AM
Response to Reply #12
37. Cox should have been fired
Congress needs to appoint a special prosecutor to look at Cox's term in the SEC, heard stories that some within SEC were engaging in insider trading.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:24 AM
Response to Original message
13. Years in Review: Bushs Economic Mistakes
From The Big Picture

With all inauguration coverage, all the time today, I thought we might try to keep the focus on erconomic/market related matters.

Time magazine has an article on Bushs economics mistakes that I would direct you to except for the annoying 9 page clicks required (click whores!).

Rather than send you there, Ill give you the 8, with excerpts of their commentary:

1. The Return to Deficits: Bushs tax cuts and spending increases and clear disdain for the pay-as-you-go approach that had brought deficits down in the 1990s brought a return to permanent deficits.

2. Iraq: Even if you think the war did bring benefits to the U.S., they would have to be pretty gigantic to justify the costs of $1-3 trillion dollars;

3. Tax Cuts for the Rich: Bush came to Washington facing almost diametrically opposing economic conditions, yet he offered up the same solutions as Reagan.

4. Financial Regulation: What is true is that most Bush-era financial regulators were less than enthusiastic about the very act of regulating, and that Bushs ownership society push glossed over a lot of potential dangers.

5. Telling Us to Go Shopping: After the 9/11 terrorist attacks, President Bush didnt call for sacrifice. He called for shopping.

6. Energy Policy: Not much to say here, except that there wasnt an energy policy.

7. A State of Denial: Every Administration spins and sugarcoats the economic truth. But the Bush White House took this disingenuousness to new levels.

8. The Muddled Bailout: The main problem has been the ambivalence with which both Paulson and the White House have approached the financial rescue.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:31 AM
Response to Reply #13
15. This Ritholtz post opens the floor to discuss the Bush post-mortem.
We have the data, warts and all, from the Bush years. It seems appropriate to compile a simple graphic with basic economic information that can reside on the opening page. I do not wish to dwell on the horrible conditions that descended upon our nation during the past eight years. However, my point is, to know where we are going we need to know from whence we came.

So what data would you like to see compiled in a wallet-sized graphic? What is not so important?

Thanks! :hi:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:51 AM
Response to Reply #15
18. Employment, Wages, Consumer Debt, Household Equity, Company Failures
I'm more a micro than macro type, I guess.
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 06:27 AM
Response to Reply #15
22. Jobs. Federal debt. Deficits. Before and after market numbers, with total 8 year % declines.
Maybe a brief list of two-term Presidents who left office with a lower stock market than when they entered. Oh, there's only the one on that list? Record disapproval rating. Number of days spent on vacation. Number of Americans killed in terrorist attacks.
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boomerbust Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 06:32 AM
Response to Reply #15
24. Oil company profits
Over the last eight years. That single stat might explain it all.
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DrDebug Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 01:26 PM
Response to Reply #24
72. Very good
Edited on Wed Jan-21-09 01:27 PM by DrDebug


Cropped from: http://www.oilwatchdog.org/resources/Oil_Prof_Charts.pd...

Exxon: Doubled
BP: Seriously failed the past years and hasn't shown any growth.
Shell: Doubled
Chevron: Is more or less back after some miserable years under Rice
Conoco Philips: Used to be small compared to the others, but has trippled
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DrDebug Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 01:54 PM
Response to Reply #72
76. The 2008 list (because it's not in the graph)
Global 500 ranking based on profit

Rank# Name Revenue Profit Oil company?


1 Exxon 372,824 40,610 Yes
2 Royal Dutch Shell 355,782 31,331 Yes
3 General Electric 176,656 22,208 No
4 BP 291,438 20,845 Yes
5 Gazprom 98,642 19,269 Yes
6 HSBC Holdings 146,500 19,133 No
7 Chevron 210,783 18,688 Yes
8 Petronas 66,218 18,118 Yes
9 Total 187,280 18,042 Yes
10 J.P. Morgan Chase & Co. 116,353 15,365 No

http://money.cnn.com/magazines/fortune/global500/2008/f... / (resorted by profit)
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 07:05 AM
Response to Reply #15
25. Is there a way to find out CEO salary & bonuses

Maybe the top 10 who were paid the most
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:08 AM
Response to Reply #25
29. Try this.....
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MsLeopard Donating Member (717 posts) Send PM | Profile | Ignore Wed Jan-21-09 08:21 AM
Response to Reply #15
30. Income inequality
The gap has increased dramatically under BushCo. It's wider than the Gilded Age, more like during the Crusades, I think.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:14 AM
Response to Reply #15
53. Population; Population Growth/Shrink rate GDP; GDP Growth/Shrink rate...
... and a range of consumption figures and/or a summary "Resource Consumption index".
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lumberjack_jeff Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:36 AM
Response to Reply #15
58. Wealth concentration, household discretionary income, debt. n/t
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:50 AM
Response to Reply #13
17. Capitalist Fools By Joseph E. Stiglitz
http://www.vanityfair.com/magazine/2009/01/stiglitz2009...

Behind the debate over remaking U.S. financial policy will be a debate over whos to blame. Its crucial to get the history right, writes a Nobel-laureate economist, identifying five key mistakesunder Reagan, Clinton, and Bush IIand one national delusion.



December 11 , 2008 "Vanity Fair" --- -There will come a moment when the most urgent threats posed by the credit crisis have eased and the larger task before us will be to chart a direction for the economic steps ahead. This will be a dangerous moment. Behind the debates over future policy is a debate over history-a debate over the causes of our current situation. The battle for the past will determine the battle for the present. So it's crucial to get the history straight.

What were the critical decisions that led to the crisis? Mistakes were made at every fork in the road-we had what engineers call a "system failure," when not a single decision but a cascade of decisions produce a tragic result. Let's look at five key moments.

No. 1: Firing the Chairman

In 1987 the Reagan administration decided to remove Paul Volcker as chairman of the Federal Reserve Board and appoint Alan Greenspan in his place. Volcker had done what central bankers are supposed to do. On his watch, inflation had been brought down from more than 11 percent to under 4 percent. In the world of central banking, that should have earned him a grade of A+++ and assured his re-appointment. But Volcker also understood that financial markets need to be regulated. Reagan wanted someone who did not believe any such thing, and he found him in a devotee of the objectivist philosopher and free-market zealot Ayn Rand.

Greenspan played a double role. The Fed controls the money spigot, and in the early years of this decade, he turned it on full force. But the Fed is also a regulator. If you appoint an anti-regulator as your enforcer, you know what kind of enforcement you'll get. A flood of liquidity combined with the failed levees of regulation proved disastrous.

Greenspan presided over not one but two financial bubbles. After the high-tech bubble popped, in 2000-2001, he helped inflate the housing bubble. The first responsibility of a central bank should be to maintain the stability of the financial system. If banks lend on the basis of artificially high asset prices, the result can be a meltdown-as we are seeing now, and as Greenspan should have known. He had many of the tools he needed to cope with the situation. To deal with the high-tech bubble, he could have increased margin requirements (the amount of cash people need to put down to buy stock). To deflate the housing bubble, he could have curbed predatory lending to low-income households and prohibited other insidious practices (the no-documentation-or "liar"-loans, the interest-only loans, and so on). This would have gone a long way toward protecting us. If he didn't have the tools, he could have gone to Congress and asked for them....MORE ABOUT GREENSPAN'S FOLLIES


No. 2: Tearing Down the Walls

The deregulation philosophy would pay unwelcome dividends for years to come. In November 1999, Congress repealed the Glass-Steagall Act-the culmination of a $300 million lobbying effort by the banking and financial-services industries, and spearheaded in Congress by Senator Phil Gramm. Glass-Steagall had long separated commercial banks (which lend money) and investment banks (which organize the sale of bonds and equities); it had been enacted in the aftermath of the Great Depression and was meant to curb the excesses of that era, including grave conflicts of interest. For instance, without separation, if a company whose shares had been issued by an investment bank, with its strong endorsement, got into trouble, wouldn't its commercial arm, if it had one, feel pressure to lend it money, perhaps unwisely? An ensuing spiral of bad judgment is not hard to foresee. I had opposed repeal of Glass-Steagall. The proponents said, in effect, Trust us: we will create Chinese walls to make sure that the problems of the past do not recur. As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest-toward short-term self-interest, at any rate, rather than Tocqueville's "self interest rightly understood." MORE ABOUT CONSEQUENCES


No. 3: Applying the Leeches

Then along came the Bush tax cuts, enacted first on June 7, 2001, with a follow-on installment two years later. The president and his advisers seemed to believe that tax cuts, especially for upper-income Americans and corporations, were a cure-all for any economic disease-the modern-day equivalent of leeches. The tax cuts played a pivotal role in shaping the background conditions of the current crisis. Because they did very little to stimulate the economy, real stimulation was left to the Fed, which took up the task with unprecedented low-interest rates and liquidity. The war in Iraq made matters worse, because it led to soaring oil prices. With America so dependent on oil imports, we had to spend several hundred billion more to purchase oil-money that otherwise would have been spent on American goods. Normally this would have led to an economic slowdown, as it had in the 1970s. But the Fed met the challenge in the most myopic way imaginable. The flood of liquidity made money readily available in mortgage markets, even to those who would normally not be able to borrow. And, yes, this succeeded in forestalling an economic downturn; America's household saving rate plummeted to zero. But it should have been clear that we were living on borrowed money and borrowed time.

The cut in the tax rate on capital gains contributed to the crisis in another way. It was a decision that turned on values: those who speculated (read: gambled) and won were taxed more lightly than wage earners who simply worked hard. But more than that, the decision encouraged leveraging, because interest was tax-deductible. If, for instance, you borrowed a million to buy a home or took a $100,000 home-equity loan to buy stock, the interest would be fully deductible every year. Any capital gains you made were taxed lightly-and at some possibly remote day in the future. The Bush administration was providing an open invitation to excessive borrowing and lending-not that American consumers needed any more encouragement.

No. 4: Faking the Numbers BUT YOU KNEW ALL THAT


No. 5: Letting It Bleed PAULSON'S LOOK FOR AN EASY FIX THAT PAYS OFF HIS BUDDIES


The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, "I have found a flaw." Congressman Henry Waxman pushed him, responding, "In other words, you found that your view of the world, your ideology, was not right; it was not working." "Absolutely, precisely," Greenspan said. The embrace by America-and much of the rest of the world-of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.
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Danascot Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:07 AM
Response to Reply #17
28. More recent Stiglitz
Do not squander Americas stimulus on tax cuts

By Joseph Stiglitz

As news of the US economy worsens, worries about whether a stimulus could restart the economy are growing. Making matters more complicated is the fact that our 2009 fiscal deficit will exceed 8 per cent of gross domestic product, even before the stimulus.

What is clear is that tax cuts will not help much. When Barack Obama, president-elect, last week proposed to use nearly 40 per cent of the stimulus for tax cuts, he was rightly told this would be less effective than, say, spending on infrastructure. It has been surprising, then, to see President George W. Bushs former economic advisers, including Greg Mankiw, argue that tax cuts are the way forward.

Mr Mankiw cites a recent study by Christina Romer and David Romer, economists at the University of California, Berkeley, who found that each dollar of tax cuts raises GDP by about $3 (2.30). Such studies, based on past data, may have little to say about the situation the world now faces. Americans confronted with debt, shrinking retirement accounts, houses worth less than mortgages and a tough credit environment will save more of their money than in the past. That was the experience with the February 2008 tax cut, where less than half of it has been spent. It matters who gets the break if it is lower income Americans, the fraction spent will, on average, be greater than for wealthier Americans.

Tax breaks for business may prove to be a sink-hole as bad as the troubled assets relief programme. Particularly worrisome are rumours that companies will be allowed to set off their losses against profits made in the past five years to get tax rebates a big gift to those who mismanaged risk, including banks such as Citibank. Some suggest that, having exhausted the more transparent bail-out strategy, banks are seeking less transparent help through the tax code. We learnt the lesson from Tarp: we need to link handouts to changes in behaviour. We should have insisted banks commit to more lending. Now we should insist any tax breaks for business are linked to investment.

http://www.ft.com/cms/s/0/a78e69a4-e30d-11dd-a5cf-00007...
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mrdmk Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:59 AM
Response to Reply #28
42. Time for an old joke that I pull out from in cases such as this
How do rich people get rich?

They know how to save money!

another words: The rich DO NOT SPEND MONEY...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 06:41 PM
Response to Reply #42
86. Updating for Our Modern Times--How Do Rich People Get Rich?
They know how to STEAL money!
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:32 PM
Response to Reply #13
80. The economy and economic progress is measured by...
Edited on Wed Jan-21-09 02:35 PM by AnneD
or should be measured by the health of the middle class.

I recommend:
the deficit when he took office and when he left
the wage gap in real spending terms and saving rate
the real jobless rating
the stratification of wealth
consumer sentiment
the number of CEO's under indictment
the progress of the bailout and how much has been spent


plus th wonderful graphs. We will need hard info to measure what Bush did, what obama walked into, and what he accomplished.

edited to add-for grins the companies that went bankrupt on his watch.
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radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:26 AM
Response to Original message
14. State Street Plunges as Bond Losses Threaten Capital

---State Street Plunges as Bond Losses Threaten Capital

By Christopher Condon
Jan 20, 2009 - Bloomberg

State Street Corp., the worlds largest money manager for institutions, shed 59 percent of its stock market value as analysts said the company may have to raise capital after unrealized bond losses almost doubled.

Losses that State Street would incur if it sold its fixed- income investments at current market value rose to $6.3 billion at Dec. 31 from $3.3 billion three months earlier, the company said today in its fourth-quarter earnings statement. State Street also spent almost $3 billion to prop up stable value funds that were hurt by the global decline in credit markets.

Net income fell 71 percent in the quarter from a year earlier, State Street said, as the worst financial markets since the Great Depression reduced the client assets on which State Street charges investment and custody fees. Consolidated tangible common equity, a measure of a companys ability to absorb financial shocks, fell to 1.05 percent, including off- balance-sheet conduits.

We believe there will be increased pressure on the company to raise common equity in the near future to maintain its credit ratings, Gerard Cassidy, an analyst with RBC Capital Markets in Portland, Maine, wrote in a research note today. A common equity ratio below 2 percent is something investors frown upon, he said in an interview.

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

For background info check out: http://sttwhistleblowers.blogspot.com /

http://sttpresscenter.blogspot.com / <-- click on the thumbnails on left side of page

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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 07:17 AM
Response to Reply #14
26. - 59%

wow!
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:07 AM
Response to Reply #14
36. Aw, crap! That's exactly what I've been worried about...
Edited on Wed Jan-21-09 09:09 AM by antigop
From the article posted:

State Street also spent almost $3 billion to prop up stable value funds that were hurt by the global decline in credit markets.

Here is some more info on stable value funds:
http://www.smartmoney.com/investing/mutual-funds/a-hidd...

For most investors, the market crash shattered the notion of safe investments. Bond funds lost money, the government stepped in to bail out money funds, banks failed.

Now millions of workers who invest through their 401(k) plans are finding that one of the last pillars of safety so-called stable value funds may be riskier than they assumed.

These funds, which are typically only available through retirement plans, are essentially bond portfolios wrapped in insurance contracts that promise to smooth returns over time. As the value of the underlying portfolio rises and falls, the insurance company makes up (or holds onto) the difference. Historically, theyve been considered tremendously safe: Two out of three retirement plans offer a stable value fund as the most conservative option.

But as we pointed out in our earlier story, Think Your Moneys Safe?, stable value funds are only as good as the guarantees behind them. And now that a fund in the Lehman Brothers retirement plan has suffered an unprecedented drop, investors and their employers are forced to wonder just how stable their fund really is.
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radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:31 AM
Response to Reply #36
39. no surprise
it's no surprise considering the bush misadministration was overseeing the distribution and then there was all that blustering when the crap first hit the fan about corporations NOT taking the bail out if they had to adhere to oversight...
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:56 AM
Response to Reply #39
41. I'm wondering how much of that loss was due to securities lending n/t
Edited on Wed Jan-21-09 09:56 AM by antigop
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radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:36 AM
Response to Reply #41
45. we don't know - there was no "oversight" or accounting of how funds were used..n/t
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:42 AM
Response to Reply #45
46. This isn't a bailout issue-- it's a question of the securities lending process
Edited on Wed Jan-21-09 10:52 AM by antigop
I've posted about securities lending on previous threads.

Stable value funds are supposed to be conservative funds. As the previous article stated, two out of three 401(k) funds have stable value funds as their "most conservative" option.

Securities lending has been going on for years. The question is, "What are they getting as collateral when they loan out the securities in the fund?"

This isn't about accounting of bailout funds that may have been received.

It's a question about the entire process of securities lending.

<edit to add> The article states, "These included $450 million to protect investors from losses in stable-value funds:" I'm assuming this means State Street (previous paragraphs also talk about Bank of New York and Northern Trust.)

So out of the $450 million they had to spend to protect losses in stable-value funds -- how much of the $450 million loss was due to collateral losses from securities lending?
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:59 AM
Response to Reply #46
47. More info: State Street earnings hit by stable value charges, securities lending
Edited on Wed Jan-21-09 11:12 AM by antigop
http://www.cranedata.us/archives/all-articles/2088 /

State Street Corporation, by some estimates the largest manager of cash and cash equivalents, released its 4th quarter earnings Friday and hosted a conference call this morning. The company revealed positive earnings, but took a $​450 million charge on its stable value funds and revealed stresses in its securities lending pools. The company'​s SSgA and State Street Institutional money market funds were not involved, though, and these continue to be unharmed by the continued market turmoil.


revealed stresses in its securities lending pools

Oh, my....

<edit to add> I'm not familiar with this website, but it claims this is what was discussed on the conference call.

I'll try to find other reports.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:07 AM
Response to Reply #47
50. My meager pension is managed by State Street

Pensions are supposedly only to have stable value securities, government agencies, and other 'safe' assets.

It wouldn't surprise if if I were to get a letter saying that my pension from my former company which is being managed by State Street, is in effect, insolvent.

I worry about spouse's union pension, too.


:grr:
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:11 PM
Response to Reply #50
78. They handle mine also, through the PBGC.
I wonder how that's going to work out.

And I think that asshole in Sarasota had my wife's YMCA 401k fund.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:59 AM
Response to Reply #46
48. Securities lending

Where the manager, takes the money in the stable value funds and uses that money to purchase riskier but sometimes higher profit securities. But now those profits have evaporated. I think this is securities lending?


I don't have a stable value fund, but I do worry that this same lending practice is also being done with money market funds. And it's so difficult to find anyone to get a straight answer from.


:grr:
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:00 AM
Response to Reply #48
49. Read previous post #47 (posted at about the same time) n/t
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:10 AM
Response to Reply #48
51. "State Street has been providing securities lending services since 1974"
From the State Street website.
http://www.statestreet.com/securitiesfinance/en/index.h...

I don't think people are aware of how much securities lending really goes on.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:28 AM
Response to Reply #51
54. Oh my

I never this practice went on, until all this market turmoil.






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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:37 AM
Response to Reply #54
59. That's why I've been posting about it...I don't think people had any idea n/t
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:35 AM
Response to Reply #51
56. Wikipedia: Securities Lending
Edited on Wed Jan-21-09 11:39 AM by DemReadingDU
In finance, securities lending or stock lending refers to the lending of securities by one party to another. The terms of the loan will be governed by a "Securities Lending Agreement", which, under U.S. law, requires that the borrower provides the lender with collateral, in the form of cash, government securities, or a Letter of Credit of value equal to or greater than the loaned securities. As payment for the loan, the parties negotiate a fee, quoted as an annualized percentage of the value of the loaned securities. If the agreed form of collateral is cash, then the fee may be quoted as a "rebate", meaning that the lender will earn all of the interest which accrues on the cash collateral, and will "rebate" an agreed rate of interest to the borrower.

Securities Lending is an over-the-counter market, so the size of this industry is difficult to estimate accurately. According to the industry group ISLA, in the year 2007, the balance of securities on loan exceeds $2 trillion globally.

Example
In an example transaction, a large institutional money manager with a position in a particular stock would allow those securities to be borrowed by a securities lender. The securities lender (investment bank) would then allow a short seller to borrow the stock and sell it. The short seller would like to buy the stock back at a lower price (which would create a profit). Once the shares are borrowed and sold, it generates cash from selling the stock. That cash would become collateral for the borrow. The cash value of the collateral would be marked-to-market on a daily basis to maintain 105%. The institutional manager would have access to the cash for overnight investment and maintains a long position in the stock.

more...
http://en.wikipedia.org/wiki/Securities_lending
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:37 AM
Response to Reply #56
60. I was going to post that...thanks. n/t
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:47 AM
Response to Reply #60
64. This stuff really upsets me

It's like they (the greedy fund managers, and others), figured out a way to make more and more money for their ever increasing greedy pockets...They gambled using our hard-earned money!



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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 12:01 PM
Response to Reply #64
67. Yeah, I think so.. and people had(have) no idea this was going on
I've previously asked, "What the HELL are they doing with our retirement money?"

It looks like pension funds (defined benefit trust funds) and some 401(k) funds were(are) doing this.

It's almost like it's another part of the shadow banking system.

It does look like a couple of funds, though in the minority, at least temporarily ended he practice. I don't know if they have since resumed or not. The following article is from October:

http://www.financialweek.com/apps/pbcs.dll/article?AID=...
Some mutual fund compa-nies are deciding the cash their funds earn from lending stocks doesn't justify the risk in light of unpredictable markets and the Securities and Exchange Commission's crackdown on short sales of selected financial stocks.

That's why Columbia Management Group, a Boston-based unit of Bank of America, temporarily ended the practice entirely Sept. 19.


One of the things that really upsets me about this is that they are using OUR MONEY to aid and abet people who are betting opposite you in the market. Securities are lent from our retirement funds to people who are shorting stocks. That's the way I see it, even though the funds do collect management fees on their securities lending programs. But I don't think people have any idea of the risk behind these programs.

And I'm particularly ticked because we don't have a money market fund 401(k) option.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 06:45 PM
Response to Reply #51
87. It Is the Only Way Market Volume Could Get in the Millions
There aren't that many shares of publicly traded companies out there, even if you turned each one over two or three times a day....
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:41 AM
Response to Reply #48
62. How much securities lending is done?
http://www.sungard.com/financialsystems/solutions/capit...

Nine trillion in securities lending is managed on SunGards capital markets solutions


NINE TRILLION managed by SunGard's solutions. I don't know what other companies provide these types of solutions.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:54 AM
Response to Reply #62
65. Thanks for finding all these articles

I have read that some companies, after a certain timeframe, let the employees rollover parts of their 401(k) to an IRA, which is nice for employees to control their own money. But most people don't have this option. After all these fiascoes, what's going to be left?
:grr:
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 12:04 PM
Response to Reply #65
68. Wish we could rollover to an IRA -- but it's not an option, until you quit, get fired, or
turn 59 1/2. At least that's what the plan documents seem to say.

We should periodically have a way of getting our money out. We should be able to rollover 401(k) funds to an IRA. Our retirement money shouldn't be held captive in a bunch of funds that we didn't pick and whose contract we didn't negotiate.
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amandabeech Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Jan-22-09 02:04 AM
Response to Reply #65
88. Bleh.
And thanks.
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 12:09 PM
Response to Reply #46
69. Update to post #46 above
Previous post said:
Securities lending has been going on for years. The question is, "What are they getting as collateral when they loan out the securities in the fund?"

Another question is, "If they received cash as collateral, did they invest that cash in something else, and what was the something else they invested it in?"
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:31 AM
Response to Reply #14
55. State Street shares cut in half after company outlines new risks
http://money.cnn.com/news/newsfeeds/articles/djhighligh...


State Street in a filing Friday updated its risk factor disclosures, which helped fuel the sell-off in the shares.

The company said it may be exposed to customer claims, financial loss, reputational damage and regulatory scrutiny as a result of transacting purchases and redemptions relating to the unregistered cash collateral pools underlying its securities lending program "at a net asset value of $1.00 per unit rather than a lower net asset value based upon market value of the underlying portfolios."

"This relates to the company's decision to protect its clients in the securities lending business from loss related to their cash float," said Ladenburg Thalmann analyst Richard Bove in a research note. "The assumption had been that State Street had paid out the monies in question and no new funds would be exposed. This new risk provision raises questions as to whether this assumption is correct or not."

State Street warned it could recognize a material charge to earnings and see its capital ratios hurt if all or a significant portion of the unrealized losses in its portfolio of investment securities "were determined to be other-than- temporarily impaired."

Finally, its business activities, including the unconsolidated asset-backed commercial paper conduits its administers, expose it to liquidity and interest- rate risk.


I'm wondering if State Street had Lehman commercial paper exposure. Don't know.
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:36 AM
Response to Reply #14
57. WSJ article from October: State Street sets restrictions on securities-lending funds
http://online.wsj.com/article/SB122368779676125241.html


In the latest sign of the tightening squeeze on securities lending, the investment-management unit of State Street Corp. is restricting the ability of investors to withdraw money from such loan funds.

State Street Global Advisors told clients in a letter this week that they wouldn't be allowed to pull out money all at once from the firm's securities-lending funds. State Street offers at least four of those funds, which loan the securities of investors and then manage cash collateral received in exchange for the securities. The funds invest in various short-term instruments.

Clients who want to cash out of the securities-lending funds still can do so, but a portion of their money now will be parked in a separate investment pool run by State Street.

"Our securities-lending program remains strong," a spokeswoman for the Boston company said. "We have not experienced any losses, and there are no restrictions on normal course transactions within the lending funds."

Northern Trust Corp. and Bank of New York Mellon Corp. also have imposed restrictions on securities lending funds.

Who uses securities lending programs:"Securities-lending programs are widely used by pension funds, endowments, index-fund managers and other large investors as a way of squeezing extra income out of a large stock or bond portfolio. Short sellers are among the biggest borrowers of shares."
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:45 AM
Response to Original message
16. Have a nice day folks!
It's time for me to get to school. I'll drop by in the afternoon.

ozy :hi:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:54 AM
Response to Original message
19. The Speech President Obama Should Deliver" But Won't By David Korten
http://www.opednews.com/articles/The-Speech-President-O...



David Korten's new book Agenda for a New Economy: From Phantom Wealth to Real Wealth outlines an agenda to bring into being a new economy-locally based, community oriented, and devoted to creating a better life for all, not simply increasing profits.

In this special pre-publication excerpt, Korten summarizes his version of the economic address to the nation he wishes Barack Obama were able to deliver.
Barack Obama was elected to the U.S. presidency on a promise of change. Before his inauguration, indeed before his election, I drafted the following as my dream for the economic address he might deliver to the nation during his administration in fulfillment of the economic aspect of that promise. It is the New Economy agenda presented in the style of candidate Obama's political rhetoric.

I suffer no illusion that he will deliver it. He has surrounded himself with advisers aligned with Wall Street interests in an effort to establish public confidence in his ability to restore order in the economy. Because there has been no discussion of any other option, to most people "restoring order" means restoring the status quo with the addition of a job-stimulus package, and that is most likely what he will try to do.

This speech presents the missing option-the program that a U.S. president must one day be able to announce and implement if there is to be any hope for our economic, social, and environmental future.

Here is the address:



Fellow Citizens:

My administration came to office with a mandate for bold action at a time when our most powerful economic institutions had clearly failed us. They crippled our economy; burdened governments with debilitating debts; corrupted our political institutions; and threatened the destruction of the natural environment on which our very lives depend.

The failure can be traced directly to an elitist economic ideology that says if government favors the financial interests of the rich to the disregard of all else, everyone will benefit and the nation will prosper. A thirty-year experiment with trickle-down economics that favored the interests of Wall Street speculators over the hardworking people and businesses of Main Street has proved it doesn't work.
We have no more time or resources to devote to fixing a system based on false values and a discredited ideology. We must now come together to create the institutions of a new economy based on a values-based pragmatism that recognizes a simple truth: If the world is to work for any of us, it must work for all of us.

Corrective action begins with recognition that our economic crisis is, at its core, a moral crisis. Our economic institutions and rules, even the indicators by which we measure economic performance, consistently place financial values ahead of life values.

We have been measuring economic performance against GDP, or gross domestic product, which essentially measures the rate at which money and resources are flowing through the economy. Let us henceforth measure economic performance by the indicators of what we really want: the health and well-being of our children, families, communities, and the natural environment.

Like a healthy ecosystem, a healthy twenty-first-century economy must have strong local roots and maximize the beneficial capture, storage, sharing, and use of local energy, water, and mineral resources. That is what we must seek to achieve, community by community, all across this nation, by unleashing the creative energies of our people and our local governments, businesses, and civic organizations.

Previous administrations favored Wall Street, but the policies of this administration henceforth will favor the people and businesses of Main Street-people who are working to rebuild our local communities, restore the middle class, and bring our natural environment back to health.

* We will strive for local and national food independence by rebuilding our local food systems based on family farms and environmentally friendly farming methods that rebuild the soil, maximize yields per acre, minimize the use of toxic chemicals, and create opportunities for the many young people who are returning to the land.
* We will strive for energy independence by supporting local entrepreneurs who are creating local businesses to retrofit our buildings and develop and apply renewable-energy technologies.
* It is a basic principle of market theory that trade relations between nations should be balanced. So-called free trade agreements have hollowed out our national industrial capacity, mortgaged our future to foreign creditors, and created global financial instability. We will take steps to assure that our future trade relations are balanced and fair as we engage in the difficult but essential work of learning to live within our own means.
* We will rebuild our national infrastructure around a model of walkable, bicycle-friendly communities with efficient public transportation to conserve energy, nurture the relationships of community, and recover our farm and forest lands.
* A strong middle-class society is an American ideal. Our past embodiment of that ideal made us the envy of the world. We will act to restore that ideal by rebalancing the distribution of wealth. Necessary and appropriate steps will be taken to assure access by every person to quality health care, education, and other essential services, and to restore progressive taxation, as well as progressive wage and benefit rules, to protect working people.
* We will seek to create a true ownership society in which all people have the opportunity to own their homes and to have an ownership stake in the enterprise on which their livelihood depends. Our economic policies will favor responsible local ownership of local enterprises by people who have a stake in the health of their local communities and economies. The possibilities include locally owned family businesses, cooperatives, and the many other forms of community- or worker-owned enterprises.

We will act to render Wall Street's casino-like operations unprofitable. We will impose a transactions tax, require responsible capital ratios, and impose a surcharge on short-term capital gains. We will make it illegal for people and corporations to sell or insure assets that they do not own or in which they do not have a direct material interest.

To meet the financial needs of the new twenty-first-century Main Street economy, we will reverse the process of mergers and acquisitions that created the current concentration of banking power. We will restore the previous system of federally regulated community banks that are locally owned and managed and that fulfill the classic textbook banking function of serving as financial intermediaries between local people looking to secure a modest interest return on their savings and local people who need a loan to buy a home or finance a business.
Cover of Agenda for a New Economy by David Korten
David Korten's new book: Agenda for a New Economy BUY THE BOOK: Get the YES! discount: 20% off cover price

And last, but not least, we will implement an orderly process of monetary reform. Most people believe that our government creates money. That is a fiction. Private banks create virtually all the money in circulation when they issue a loan at interest. The money is created by making a simple accounting entry with a few computer keystrokes. That is all money really is, an accounting entry.

My administration will act immediately to begin an orderly transition from our present system of bank-issued debt money to a system by which money is issued by the federal government. We will use the government-issued money to fund economic-stimulus projects that build the physical and social infrastructure of a twenty-first-century economy, being careful to remain consistent with our commitment to contain inflation.

To this end I have instructed the treasury secretary to take immediate action to assume control of the Federal Reserve and begin a process of monetizing the federal debt. He will have a mandate to stabilize the money supply, contain housing and stock market bubbles, discourage speculation, and assure the availability of credit on fair and affordable terms to eligible Main Street borrowers.

By recommitting ourselves to the founding ideals of this great nation, focusing on our possibilities, and liberating ourselves from failed ideas and institutions, together we can create a stronger, better nation. We can secure a fulfilling life for every person and honor the premise of the Declaration of Independence that every individual is endowed with an unalienable right to life, liberty, and the pursuit of happiness.

No government on its own can resolve the problems facing our nation, but together we can and will resolve them. I call on every American to join with me in rebuilding our nation by acting to strengthen our families, our communities, and our natural environment; to secure the future of our children; and to restore our leadership position and reputation in the community of nations.




Work on the YES! website marked as (cc) is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License.



David Korten's new book, An Agenda for a New Economy: From Phantom Wealth to Real Wealth, to be published by Berrett-Koehler, Feb 2009. This extract forms part of the YES! series, Path to a New Economy. An earlier version of this chapter first appeared as part of David's article in Tikkun, Nov/Dec 2008. David Korten is the author of the international bestseller When Corporations Rule the World and The Great Turning: From Empire to Earth Community. He is co-founder and board chair of YES! Magazine, and a board member of the Business Alliance for Local Living Economies.




Authors Bio: David Korten is co-founder and board chair of the Positive Futures Network. This article draws from his newly released book, The Great Turning: From Empire to Earth Community. Go to www.yesmagazine.org/greatturning for book excerpts, related articles, David's talks, and resources for action.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:55 AM
Response to Reply #19
20. Can we start new employee-owned companies in Ohio on a mass scale? Tools from Spain By John Logue
http://www.opednews.com/articles/Can-we-start-new-emplo...


This article was first written for "Owners at Work", v. 20, no. 2 (Winter 2008/09).

Dateline: December 2, 2008. National Bureau of Economic Research announces that US in recession since December 2007.

Another recession in Ohio? We are still in the last one! Between January 1, 2000, and November 30, 2007, Ohio lost 255,200 manufacturing jobs -- 25% of our manufacturing base. Total Ohio employment dropped 154,700 or 2.8%. Since the "new" recession began on December 1, 2007 through October 2008, weve lost an additional 23,800 manufacturing jobs and 41,700 jobs over all.

The employee-owned sector is less likely to shed jobs. If we compare the performance of Ohios Employee-owned Network companies for which we have employment data in 2000 and 2007 (24 manufacturing companies and 37 total companies), the manufacturing firms have shed 1% of their jobs not 25% -- and total employment has grown by 15% -- not dropped 3%. If Ohios manufacturing sector had matched Network companies, wed have 230,000 more manufacturing jobs than we had in November 2007 (the 2008 data arent available yet) and close to one million additional total jobs in the state. Now, Network companies arent representative of the entire employee-owned sector: They are more participatory, more likely to communicate how the business is doing, and more likely to provide training. Moreover, the employee-owned sector as a whole is less likely to shed employment than their conventional competitors, far less likely to offshore or outsource, and more likely to reinvest in new plant, property and equipment in Ohio.

Yet despite these advantages, the employee-owned sector has grown only slowly over the last 15 years.

What can we do to encourage greater growth?

Why we should start new employee-owned firms

One of the big holes in American employee ownership is the absence of employee-owned start ups. ESOPs are far too expensive for start ups. Co-ops dont cost too much, but they are virtually unknown. What Small Business Development Center knows enough about them to suggest a co-op when you come in announcing "My buddy and I want to start a new business"?

Besides, they are hard to capitalize. They arent designed to include outside capital from non-members.

We need new tools for creating new employee-owned businesses. The most promising come from Spain. They were developed initially to deal with the massive economic dislocations that accompanied Spains entry into the European Union in 1986. Since then they have been developed sequentially to meet the needs of the times and they have become a substantial source of new business and job creation.

In the Basque region alone, which has a population of 2.1 million, or roughly that of greater Cleveland, between 100 and 150 new employee-owned firms are established annually. Over the last three decades, Spain has developed three new employee-ownership mechanisms for responding to economic dislocation which we should consider.

The first is a new form of corporation: the Sociedad Laboral (SL), or "Corporation of Labor." It is a form of corporation majority-owned by employees but based on stock ownership and able to include non-employee capital (unlike cooperatives). Its a simple, flexible, and cheap way for employees to buy troubled companies or to start new ones. Since 1997, when Law of Labor Corporations changed, about two-thirds of new employee-owned companies have used this legal form.

The second is a way to capitalize new SLs and co-ops through lump-sum distributions of unemployment compensation and severance pay. This approach not only capitalizes new employee-owned businesses, it tends to preserve "social capital" more below. Both make business success more likely.
The third is an intense support system that helps new start ups and provides economies of scale for small, employee-owned businesses.

Labor Corporations

The Spanish system of "Corporations of Labor" (Sociedades Laborales, SLs) offers a unique tool to recapitalize companies under employee ownership and to start new companies out of the wreckage of the old. As a form of incorporation, its also inexpensive. As a result, there are about 20,000 of these Labor Corporations in Spain today, employing about 130,000.

In October I visited with the general director of the Basque regional association of Sociedades Laborales, Josetxo Hernandez Duabeitia, in Bilbao, Spain. Hernandez was one of the pioneers of this form of share-based employee ownership in his company in the 1970s, and has worked since 1982 with the Basque regional association of Corporations of Labor ASLE (Agrupacin de Sociedades Laborales de Euskadi). Although the initial SLs were, says Hernandez, all industrial companies, today there are about 1000 SLs with a bit more than 13,000 employees in the three Basque provinces in all sectors of the economy.

The core of the Corporation of Labor is the following:

1. It is a form of incorporation in which workers in the company own more than 50% of the shares in the company;
2. No single person (employee or outsider) generally can own more than 1/3 of the stock in the company (one exception when a public organization takes partial ownership, it can hold up to 49%); and
3. No more than 25% of the hours worked by permanent employees of the company can be worked by non-owners in companies with fewer than 25 employee shareholders and no more than 15% of the hours can be worked by permanent employees in companies with more than 25 employee owners, i.e., employee owners have to provide at least 75% of the hours worked in smaller companies and more than 85% in larger companies.

The SLs are part of the "social economy," says Hernandez. They seek "balance between human and business development" and to create "an equilibrium between capital and labor."

SLs come in two varieties. The first is the regular Corporation of Labor (Sociedad Anonima Laboral) which originated as a way to buy companies threatened by shutdown or job loss. It dates in practice to the late 1970s in worker buyouts, and was accorded separate legal status through 1986 legislation; it requires a minimum capitalization of 60,000 Euros (about $80,000 at the current exchange rate of 1 = roughly $1.35). The second is the Limited Liability Corporation of Labor, established in 1997, which requires a minimum capitalization of 3,000 Euros and is appropriate to new start-ups. So easy to establish are the SLs that roughly 3 out of 4 employee-owned start ups in the Basque region now take that legal form.

In Spain as a whole, there are 2600 of the former, employing 38,000, and 17,700 of the latter, employing 93,000. So average employment is low (under 7) but total employment is a respectable 130,000.

While Sociedades Laborales have modest tax benefits (primarily for incorporation and transfer taxes), their real appeal since 1985 is that employees can receive their unemployment compensation (24 months in Spain and between 24,000 and 30,000, depending on the number of children the unemployed worker has) in a lump sum to recapitalize the company or to start a new company.

Capitalizing new firms: Financial and social capital

There are two major problems in starting new businesses: (1) capitalizing the firm (financial capital), and (2) building a reliable group of employees who can work together successfully (social capital).

("Social capital" is the relations of collaboration and trust between the employees that grew out of years of working together in an existing business. Its lost automatically in plant shutdowns and takes years to rebuild. The failure to do so successfully is one of the major causes of new business failure in the US.)

Beginning in the late 1970s, Spain began encouraging groups of employees who lost their jobs to shutdowns or layoffs to jointly start new employee-owned businesses, saving social capital for the new business, and converting worker financial rights into capital for new business start ups.

The initial mechanism for capitalizing new firms was lump-sum distribution of severance pay in shutdown or layoff situations. (Spain had a general system of severance pay for valid dismissals today it is 20 days wages for each year of service up to a maximum of 12 months pay.) Obviously bankrupt businesses that are shutting are not going to pay severance to their workers, so the Ministry of Labor lent the employees their severance to help capitalize the new business. Today theres a national severance insurance fund which can provide severance pay when companies cant.

Beginning in 1985, the government also provided lump-sum distribution of unemployment compensation to employees in major permanent layoff/shutdown situations to help capitalize new employee-owned companies through co-ops or Labor Corporations. In order for the employee group to receive lump-sum distributions, they needed to have a viable business plan to resuscitate their shut firm or to start a new employee-owned company. The plan has to have been vetted by a reputable cooperative or SL development program and to pass the scrutiny of the unemployment compensation system. The unemployment compensation system continues to monitor the new employee-owned business for three years.

The funds are used to capitalize or recapitalize the business and to provide working capital (including wages) in the start-up or restart phase. Obviously this system also reduces long-term unemployment by creating new businesses.

Whats to keep us from trying a pilot program like this in Ohio?

Support system for employee-owned start-ups

One of the truly astonishing aspects of the Spanish system of employee ownership start-ups is the intense level of services provided by various employee-ownership business development centers. They are well staffed and provide services that go far beyond what our Small Business Development Centers provide.

And they have an extraordinary success rate assisting employee groups with adequate social and financial capital: only about 1 in 5 cooperative business start-ups fail in the first five years, as contrasted with about 4 out of 5 conventionally owned business start-ups in the US.

We visited 3 cooperative business assistance centers which all work just in the Basque region.

Saiolan, located as Mondragon University, is the Mondragon cooperatives business start-up center though it assists conventional business start ups as well as cooperative start ups. It was started in the early 1980s, a time of high unemployment of university graduates in the Basque region and when, coincidentally, the Bank of Spain required that the Caja Laboral, the Mondragon cooperatives bank, get out of the cooperative development business. Saiolan provides a startling range of services to new businesses, be they co-ops or conventional firms. It maintains an inventory of business ideas which have been vetted for feasibility and which are available with assistance to groups wanting to start new businesses. Saiolan will also do prototypes for new products; it is, after all, located in an engineering school that developed out of a metal trades vocational school.

Saiolans success rate is impressive: 89% of the business start ups it assisted are still in business after 5 years and 83% are in business after 10 years.

Elkar-lan is the cooperative development center for the Basque region which is jointly supported by two cooperative associations (one representing worker, finance and social service co-ops, the other representing farmer and consumer co-ops) and the Basque regional governments cooperative agency. It has a staff of three professionals who provide start-up services for new co-ops including information, training, feasibility studies, software for business plans, legal services for incorporation, and monitoring and mentoring services for a year. The last includes regular review of financial statements, attendance at co-op meetings, forwarding official governmental information, and handling all sorts of queries. Each new co-op gets a staff member assigned for a year who serves as its advisor during its first year of business.

Elkar-lan doesnt handle ongoing payroll, tax, and legal services for co-ops on an on-going basis, but it does provide co-op specific advice to the consultants who provide these services as needed.

Elkar-lan has been setting up 30-40 co-ops a year since it was set up itself in 2003, typically creating 150-300 new jobs annually. About nine-tenths of these are new businesses, largely in the service sector; the remainder are ownership conversions.

Elkar-lans success rate: Of the 38 co-ops set up in 2003, 35 92% have survived for 5 years.

ASLE, discussed above, is the umbrella organization for SLs in the Basque region. About one-third of the SLs by number with about three-fourths of the SLs by employment are ASLE members. ASLE provides a remarkably broad range of services both through general services available to all members and through specific consulting services on a fee for service basis. These services include accounting, legal services, human resources management, occupational health and safety, agreements with financial institutions, marketing, assistance with government programs, IT advising, quality assurance, and training services. It has a staff of 28.

For new SLs, ASLE assists in preparation of feasibility studies, and screens them for the unemployment compensation system in order to determine whether the employees starting the SL receive a lump-sum distribution of unemployment compensation to capitalize the new business. It does the legal work for incorporation and business set up. It estimates that it assists about 30 new SL start ups annually out of the roughly 90 established annually in the Basque region.

****************

The impact of this series of measures has been the creation of a vibrant sector of start-up employee-owned businesses. The Spanish system encourages employees who have worked together, but been laid off, to start new businesses that preserve the social capital built over years, capitalize the new firms with lump sum unemployment compensation and/or severance pay, and provide substantial support in the first several years of business.

This is obviously not a panacea for the ills of modern economies, but it has helped to create one thousand or so new employee-owned businesses employing 13,000 in a region with the population of greater Cleveland with a survival rate that we can only envy.

Sidebar: Izar Cutting Tools

I visited one of the largest of the SLs, Izar Cutting Tools SAL, to see how the form works in practice. Located just outside of Bilbao in a brand new factory when opened in March 2008, Izar traces its origins to 1910. It began as a division of a family-owned automotive supplier, producing cutting tools for the parent companys use. Now it produces drill bits and milling machine tooling for CNC machining centers.

Under the government of Francisco Franco (1939-1975), Spain sought to achieve complete economic self-sufficiency ("autarky") behind high tariff walls. It sought to be self-sufficient in everything: cars, trucks, etc. At its peak employment before the crisis, Herramientas de Amorebieta had more than 1000 employees. As Spain prepared to enter the European Union in 1986, it was apparent that many things had to change. The local Basque government sought to achieve international competitiveness by marrying local companies to foreign "technological partners." By that time, the family had already sold Herramientas de Amorebieta which was split into an automotive supply company and a cutting tool company. The latter was sold to an Italian investor based in France "who put into nothing but drained a great deal from the company," according to Izar General Manager Carlos Pujana.

This absentee investor was ousted after pressure from the workers which included strikes, demonstrations, assemblies, and picketing his home in Paris. "He basically got the plant for nothing and we got it back from him for nothing" in a purchase in 1991, says Pujana.

At the time the employees took over the company, it had been subject to substantial disinvestment and needed to be recapitalized. That was financed from three sources:

The first was the payment of 24 months unemployment compensation in a lump sum to the employees to invest in the company. Wasnt this a risk? "Sure, but it was the only option to preserve our jobs," said board president Maria Feli Arrizabalaga, who is an inside sales person and has 30 years seniority at Izar.

The second was the advance of severance pay from the national severance pay fund (which backstops insolvent companies for their severance obligations (20 days pay per year worked up to 12 months pay) as a loan to the company. That loan is currently a matter of dispute since the government has twice passed legislation forgiving loans for from this fund made for the purpose of keeping firms open as Sociedades Laborales.

The third was a 20 percent pay cut and increase in working hours agreed to by employees. Subsequently the company required additional capitalization in 1997, and the employees put in additional funds.

Izar is governed by an elected administrative board (similar to a Board of Directors) of 7 members. The General Manager is not a member of the board. All of them are inside members (and unpaid), drawn from various areas of the company: inside sales, workshop manager, purchasing, machine operator, quality control, etc., and elected by the employee owners. Additionally, there is a non-member secretary of the board, an outside lawyer, who is paid. The presence of an outside lawyer in the Board is legally mandated. "Its a balanced board that reflects the makeup of the company," says Pujana. Thats better, he thinks, than the previous board that represented primarily production. The board meets monthly, and Pujana reports to it. The company is also unionized, and Pujana meets with the union on a monthly basis as well. Board officers are elected by the board, but the Izar pattern is to elect the top vote getters among the board members as President and Vice-President.

The company is owned by 130 of its 204 employees as a Sociedad Anonima Laboral (SAL). All permanent employees are owners, and none but employees are owners. Unlike other SALs, all permanent employees are expected to become members. By contractual agreement (which is not a SL legal requirement), employees who retire are required to sell their shares back to the company, and the company is required to buy them. Shares are valued at the price originally paid by the initial SAL members, adjusted for inflation. The current value of the original members shares is 28,000 (ca. $38,000). New employees put in 14,000 for their ownership stakes. This can be paid through a wage checkoff over a period of up to 10 years, depending of the needs of each employee.

In general the company has plowed 70% of profits back into reinvestment in the company (and it now has a brand new plant), far above the 10% compulsory reinvestment in the SL sector; it has paid out 30% of profits to its employee owners in dividends. Today Izar is the largest producer of cutting tools in Spain and one of the top 5 in Europe.
John Logue is the director of the Ohio Employee Ownership Center and a professor of political science at Kent State University. He visited Spain in October with the Cleveland Foundation study group and stayed on to visit ASLE, Izar Cutting Tools, and Elkar-lan. He appreciates the assistance and hospitality of Jone Nolte Usparitza and Josetxo Hernandez Duabeitia, of Carlos Pujana, and of Mirene Arri of those organizations, respectively.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:57 AM
Response to Reply #20
21. Coming soon to U.S., 1 million jobs lost every month: Report Filed by Stephen C. Webster
http://rawstory.com/news/2008/Coming_soon_to_U.S._1_mil...

12/07/2008 @ 7:23 pm


London-based GFC Economics is making a frightening prediction: By spring 2009, the United States could be facing more than 1 million layoffs every successive month.

Expenses related to corporate debt, and muddy credit markets consumed by fear, are driving a fast-approaching "hard landing," claims a Sunday report in UK's Guardian.

"Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds," the paper reported.

"November's jobs figures were so much worse than analysts had expected that the Dow Jones share index actually rallied by 259 points, more than 3 per cent, as investors bet that Washington would have to launch a major new rescue package for the economy even before President-elect Barack Obama takes over the White House in January."

Sunday morning, during an appearance on Meet the Press, President-elect Obama cautioned Americans that the crisis would only get worse before it begins to ease. He also outlined a new stimulus package some senior Democrats have said could cost as much as $1 trillion.

"Mr. Obama refused to put a cost on the plan, but senior Democrats are talking about $700 billion, with others urging up to $1 trillion," reported the Times Online. "When he met the nations governors last week he was told that on the state level there was $136 billion worth of building projects ready to go if federal money was made available."

David Frost, director-general of the British Chamber of Commerce, paints a grim deadline.

"The worry is that next year the job losses will be just horrendous," he said. "All sectors are taking the hit. In the middle of the year it was construction and estate agencies. Now it is services, the automotive industry, retailers. Firms are waiting for Christmas and if they can't see any improvement they will cut their payrolls."
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:42 AM
Response to Reply #20
35. Exactly what I recommend: Employee-owned businesses. Cut out the overhead.
Employee-owned businesses tend to be responsible to customers as well as to employees, more efficiently run (due to leaner management and employees' intimate knowledge of the business), and relatively honest and just.
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 06:32 AM
Response to Original message
23. Hey, who won the inaugural pool yesterday?
I know it wasn't me! :-)
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:35 AM
Response to Reply #23
44. It ended up between my low-end pick and Koko01's pick.
I'll post some more comprehensive analysis here in awhile.

What I want to look at is that I think the mean of the picks came pretty close to the closing value...

If you exclude Dr.Phool's 10,000. (Although the optimism was appreciated.)
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:03 AM
Response to Original message
27. Morning Marketeers.....
:donut: and lurkers. I'll be popping in and out today. My brother (that adopted our niece) will be undergoing major surgery...about 8 hrs worth. He is nervous but otherwise in good spirits. The family gallows humour has kicked in (we tend to be a tough crowd).

A side note-their nanny goat dropped 2 kids yesterday, one white and one black. We were cracking up because my little niece named the black one Barack and the white one Obama. Now if she isn't the crest of a trend. You know that if you name your farm animals-they cease to be farm animals and are more like pets. Farmer Brother now has two pet goats and there won't be a barbecue during spring break.

Happy hunting and watch out for the bears.
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:11 AM
Response to Reply #27
52. Good luck to your brother!
And that's awesome about the now-pet goats! too funny!
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:55 AM
Response to Reply #52
66. He's still in surgery...
but they told us he was doing ok.

It's a shame about the goats. We were looking forward to cabrito-but I am too DEM to eat either kid. Guess it's brisket for us.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 08:39 AM
Response to Original message
34. dollar watch


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

Last trade 86.208 Change -0.142 (-0.18%)

US Dollar Rally Continues, Yields Nearly 900 Pips

http://www.dailyfx.com/story/topheadline/US_Dollar_Rall...

Positioning in favor of the US Dollar continued to prove lucrative last week: floating short positions against the Euro and the Australian Dollar added to previous gains while new exposure selling the Canadian Dollar yielded over 450 pips. Our short USDJPY trade inched a meager 38 pips in the wrong direction on a weekly basis but remains in positive territory overall.



...more...


Pound Freefall Continues As BoE Signals Quantitative Easing, Unemployment Highest in Eight Years

http://www.dailyfx.com/story/bio1/Pound_Freefall_Contin...

The Pound dropped after climbing back above 1.4000, but failed to hold the level ahead of the BoE’s minutes and employment data as traders started to price in further rate cuts and quantitative easing from the central bank. The Sterling would fall to as low as 1.3715 after BoE Governor King in a speech in Nottingham stated that officials may need to start buying assets in the next few weeks to promote lending. Meanwhile, the minutes from the MPC’s last meeting showed an 8-1 voted to lower the benchmark rate by 50 bps, as perennial dove David Blanchflower called for a full %1 reduction. The tight credit markets continue to impact the economy which was evident in the employment report which showed jobless claims of 77,900 and the unemployment rate reaching the highest since 2000 at 3.6%

It is clear that a ZIRP is in the future for the U.K. and that has pressured the Sterling to the lowest levels since June 2001. The troubles of the banking system may ultimately force the government to nationalize banks and start buying corporate bonds and commercial paper to improve lending to businesses and consumers. Despite inflation remaining above the central bank’s 3% threshold, Governor King still sees the risk of it falling below the 2% target which would justify lower interest rates and quantitative easing. Last month’s meeting showed that the central bank refrained from a deeper rate cut as it feared it would sink confidence, but the current banking troubles and continued weakness in the labor market has accelerated the need for action. We could see the Sterling look to test the 2001 low 1.3680 before finding significant support. However, a break of this level would leave the Sterling susceptible to a possible drop to 1.100 with parity not far behind.

After failing to hold 1.300 overnight the Euro would fall back to support at 1.2850 before another move higher. Risk aversion flows had the single currency on the run before Hawkish comments from ECB President Trichet and other committee members fueled support. The MPC leader would reaffirm his contention that the region was not at risk for deflation and that it should be disciplined and maintain its medium term perspective. The comments would reinforce earlier ones by committee member Nowotny that there are no plans for a zero interest rate policy. The central bank signaled following its last meeting that no action was likely at their February meeting and that March would be the next “rendezvous” of importance. Another failed attempt at 1.300 could send the Euro down to previous congestion above 1.2500.

The dearth of fundamental releases on the U.S. calendar continues today with only the NAHB housing market index scheduled. The second tier indicator is expected to show a level reading of 9, which may be a signal that the housing sector has started to stabilize. However, giving the mounting troubles of the banking system, credit conditions may start to tighten again which will make it formidable for buyers to secure funding. The lack of demand may push battered home values even lower which will only add to the woes of the economy. Therefore, President Obama’s economic team is fast at work to develop a bank bailout package that will be implemented along side the already proposed fiscal stimulus plan. The call for action may help ease market fears and spark risk appetite which could lead to dollar weakness. However, after U.S. equity markets dropped more than 4% and the weakness saw in Asia and Europe overnight, it is more likely that we could see more losses today and the safe haven flows add to bullish dollar sentiment.

...more...
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Robbien Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 09:32 AM
Response to Original message
40. BlackRock profits fall 84%
BlackRock, one of the worlds biggest fund management companies, had a sharp drop in earnings of 84 per cent in the fourth quarter, as investors pulled money from hedge funds and performance fees plunged.

BlackRock, 49 per cent owned by Merrill Lynch, said on Wednesday its net income fell to $53m, or 40 cents a share from $322.4m, or $2.43 a share, in the same quarter the previous year. It was BlackRocks second consecutive quarter of falling profits.

Performance fees also dropped by 84 per cent, falling to $23.7m in the fourth quarter compared with $152.7m last year. The results were due to steep declines in alternative investment products

. . .

The value of its shares has fallen by nearly half in the last year, but its reputation for risk management remains solid. It has been advising the Fed on managing troubled assets for financial institutions from Bear Stearns to AIG.

http://www.ft.com/cms/s/0/5c8d3a58-e7c1-11dd-b2a5-00007...
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Robbien Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 10:22 AM
Response to Original message
43. Australian Banks safe from market predators for six more weeks
BATTERED Australian banks and other financial stocks have been granted six more weeks of protection from rapacious hedge funds.

The ban on short selling financial stocks put in place last year was due to expire next week but the Australian Securities and Investments Commission, citing the growing crisis among British and American banks, said last night it would retain the prohibition until March 6.

The news came after the close of another tough trading session for Australian banks. Over two days this week, the major lenders have lost up to 7 per cent, driving the stock market to new lows.

However, the losses have paled next to the carnage inflicted on British banks after a ban on short selling financial stocks was lifted on Friday. Despite Prime Minister Gordon Brown unveiling the second phase of his bailout of the banking system, Royal Bank of Scotland shares collapsed by more than 70 per cent this week, while Lloyds TSB dived 55 per cent.

http://www.theaustralian.news.com.au/business/story/0,2...


Sure banks suck, but how can banks even pretend to be solvent when every time there is an uptick in their financial situation (usually caused by bailout monies) hedge funds swoop in and feed on their carcasses?

In the EU the hedge fund propaganda campaign is going strong blaming everyone but themselves for the problems with plummeting bank stock prices. They have nothing to do with it says hedgies.

Short-selling curbs failed
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Robbien Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:37 AM
Response to Original message
61. UBS, bank that allowed clients to hide assets from being taxed, is being sued by client
for allowing him to hide assets from taxation.

Billionaire Olenicoff Adds Racketeering, Kurer to UBS Complaint

an. 20 (Bloomberg) -- Real-estate billionaire Igor Olenicoff, who sued UBS AG for fraud after investing more than $200 million offshore with the bank, has added racketeering counts and Chairman Peter Kurer to his complaint.

Olenicoff filed his initial complaint in September, nine months after pleading guilty in a tax evasion scheme tied to his former private banker at Zurich-based UBS. The amended complaint alleged UBS engaged in a racketeering conspiracy from 2001 to 2008 that entitles him to $500 million in damages.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 11:45 AM
Response to Original message
63. Oil and gold AKA Something is rotten in Denmark....
I may not know much-but I do know a bit about oil and have been learning a thing or two about gold. Things have not been jiving lately-in wierd ways. I know some folks don't care for Kirby-but this article has some good observations (the oil are spot on no pun intended).


Questions Begging Answers
By: Rob Kirby



To say that markets have been behaving strangely recently is an understatement. In recent weeks and months weve been witness to historic lows in sovereign interest rates in-the-face-of record amounts of debt being issued by governments? Weve seen the price of gold behave counter intuitively by not rising in-the-face-of unprecedented systemic global economic malaise? Last, but not least, weve witnessed a complete flip-flop in the traditional pricing of Brent Crude Oil versus West Texas Intermediate ?


<snip>


The Situation In Gold



First and foremost it is imperative that everyone realize and understand that Gold is Money. We know that gold is money because every Central Bank in the world carries gold on their balance sheets as an official reserve asset.



With that in mind, folks would do well to read one of James Turks latest articles titled, The Fed's blueprint for market intervention . In this article, Turk offers commentary on a recently unearthed 1961 document from the archives of the late, long-time former Chairman of the Federal Reserve, William McChesney Martin Jr. which details in the Feds own pen; their plans to intervene surreptitiously in the currency and gold markets to support the dollar and to conceal, obscure, and falsify U.S. government records so that the intervention would not be discovered.

<snip>

The mounting evidence is this regard is so compelling that from this point forward any economist attempting to explain our current situation without prefacing their explanation with an EXPLICIT ACKNOWLEDGEMENT that our capital markets are not free and are in fact RIGGED by officialdom their analysis is not worth the time to read it. In this regard, perhaps never have more prescient words been uttered than GATAs Chris Powell in Washington in April, 2008 when he opined, There are no markets anymore, just interventions.



<snip>

Brent Crude trading at a 7 Dollar premium to West Texas Intermediate is like the SUN rising in the west and setting in the east and no-one asking any questions why?



Thanks to the unearthing of the Feds Playbook Document, referenced above, along with cumulative knowledge of the existence of the Presidents Working Group On Financial Markets ; we know that interference in strategic markets with national security implications is now practiced commonly by the Government and the Fed working together. No other explanation for this distortion is plausible other than NYMEX regulators like the Commodities Futures Trading Corp. are more brazen and actively complicit in market rigging of strategic commodities than their London counterparts. This manipulation is all being done in desperation; to preserve U.S. Dollar hegemony by perpetuating the illusion that inflation is being held at bay. Ample anecdotal evidence exists in a host of articles particularly relating to derelict CFTC oversight of COMEX gold and silver futures - archived at kirbyanalytics.com to support this position.



more........

http://news.goldseek.com/GoldSeek/1232485460.php
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KoKo Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 01:09 PM
Response to Reply #63
71. Agree...the enormity of this crisis, the people who've been picked to fix it
(being the ones who helped cause it) and the fear and panic is just too reminiscent of the Iraq Invasion Fiasco. I don't know why the Dems are complicit in this unless they've all been aware of manipulation and are either feeling to guilty to fess up...or were part of it in some way had have too much to lose not to keep covering up more about what was really going on. It's almost like the markets are manipulated to create fear when they need it and optimism when they need a trader bounce. Frankly the trading manipulation is very bizarre. I remember watching CNBC for years (since it first started as the old FNN) and they used to focus information for "Investors" In the past years there's been ever increasing "Trader Talk" and little mention of "Investors" who are interested in information for long term, value investing.

The Kirby article is interesting in that it probably is true...even if he's a gold bug that doesn't mean that he hasn't found manipulation that is really there. We know traders and speculators along with PPT have been moving these markets for over a decade...revealed recently. Now it's Index Funds and more Trading that are the emphasis as everything implodes. I really was hoping Obama would would cut some of the ties with the Goldman-Saks crowd. They seem to be running everything and have a big voice on the airwaves for their views.
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antigop Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 12:44 PM
Response to Original message
70. Wisconsin school district slammed by Wall Street meltdown (teacher retirement and healthcare)
Edited on Wed Jan-21-09 12:44 PM by antigop
http://money.cnn.com/2009/01/15/news/wisconsin_loss_har...

Lehman Brothers. Washington Mutual. And now ... Whitefish Bay Schools?

The global financial crisis that claimed some of the world's biggest banks now has this suburban Milwaukee school district and four others on the brink of losing a hefty $200 million investment.

Two years ago board members from the districts signed off on an investment to fund their teachers' retirement and health care benefits.

Shawn Yde, business director for the Whitefish Bay School District, says he and his board members were told they were making a conservative investment in "AA" and "AAA"-rated bonds. Mark Hujik, from the Kenosha school board, says he and other board members were told they were investing in highly rated, and relatively safe, corporate bonds.

But instead of buying corporate bonds, the school districts actually purchased one of Wall Street's most complex financial instruments: synthetic collateralized debt obligations (CDOs).
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 01:30 PM
Response to Reply #70
73. NPR did a series about Wisconsin school last November
Edited on Wed Jan-21-09 01:34 PM by DemReadingDU
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 01:37 PM
Response to Original message
74. Japans Severe Recession May Last Three Years, Yoshikawa Says
Jan. 21 (Bloomberg) -- Japans recession may become the longest in the postwar era, according to Hiroshi Yoshikawa, head of the government committee that charts the economic cycle.

Wed better get ready for a three-year recession, the Tokyo University professor said in an interview in Tokyo this week. The decline will be very severe, not only in terms of duration but also depth, he said.

The downturn probably began in the fourth quarter of 2007 and may exceed the 36-month slump that ended in 1983 because demand from abroad will remain weak, Yoshikawa said. Japan has yet to shake off its dependence on exports, which collapsed last quarter as the global financial crisis intensified.

The worlds second-largest economy will probably shrink about 1 percent in each of the two years ending March 2010, said Yoshikawa, 57, who is also a member of Prime Minister Taro Asos economic advisory panel. He said the ensuing recovery will be driven by sales to Asia rather than the U.S. and Europe.

While economies such as China and India will probably slow in coming months, theyre still growing at a very different level than in the developed world, Yoshikawa said. China probably expanded 6.8 percent last quarter, economists estimate a report will show on Jan. 22. The U.S., Europe and Japan all contracted in the third quarter of 2008.

Too Optimistic

Its too optimistic to expect a U.S. recovery this year because financial problems linger in the worlds biggest economy, he said. Asian economies have a relatively healthy banking sector and Japan can benefit from its close proximity to the region, said Yoshikawa, who earned a Ph.D. at Yale University under James Tobin, a Nobel Prize-winning economist.

/... http://www.bloomberg.com/apps/news?pid=20601068&refer=e...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 01:55 PM
Response to Reply #74
77. Singapore May Boost Spending as Economy Contracts 5%
Jan. 21 (Bloomberg) -- Singapore said its economy may shrink an unprecedented 5 percent this year, fanning speculation the government will announce record spending in its budget tomorrow to help companies hurt by the global recession.

Finance Minister Tharman Shanmugaratnam may outlay as much as S$20 billion ($13.3 billion), or 8 percent of gross domestic product, to help households and businesses survive the slump, Macquarie Capital Securities predicts. The government may also tap into its reserves for the first time to fund the expenditure.

Singapore is going through its sharpest recession and may experience the deepest deflation since 1986 this year, the government said today. Falling demand has forced companies such as DBS Group Holdings Ltd. and Stats Chippac Ltd. to fire workers, and Credit Suisse Group predicts as many as 300,000 jobs may be lost by the end of 2010.

/... http://www.bloomberg.com/apps/news?pid=20601068&sid=aih...
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MadinMo Donating Member (519 posts) Send PM | Profile | Ignore Wed Jan-21-09 01:53 PM
Response to Original message
75. Jobs forum?
I'm posting this here because it seems to me that this was where it was initially suggested.

What ever became of the suggested Jobs Forum?

Having recently been RIFFED out of my job I am seriously looking but options here are few. I'd love to have a forum where those of us who are in the same boat can commiserate.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 02:15 PM
Response to Reply #75
79. We have been to Skinner with this-
haven't got a no but haven't got a yes. E mail him with your request. I will ask again.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:51 PM
Response to Reply #75
83. I expect that the inauguration and other duties has slowed things a bit.
So I've felt it wise to wait after the dramatic change of government before engaging the Admins over this issue again. Don't worry - I will.
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MadinMo Donating Member (519 posts) Send PM | Profile | Ignore Thu Jan-22-09 09:12 AM
Response to Reply #83
90. Thanks Ozy and Anne!
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Robbien Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 04:13 PM
Response to Original message
81. Finance Coalition (Carlyle, Morgan Stanley, Credit Suisse) Touts Private Stimulus
WASHINGTON -- A coalition of banks and private-equity firms is pushing for a greater role in reshaping the nation's infrastructure, hoping to capitalize on government budget deficits and a dearth of funds for transportation projects.

In a report due out Wednesday, a group including Morgan Stanley, Credit Suisse and the Carlyle Group says $180 billion of private capital is available for investment in highways, airports and other transportation infrastructure. The report says this money could help create millions of jobs, boost economic growth, reduce travel congestion and free up government dollars for other priorities.

"It's really a perfect fit with Obama's objectives," said Douglas Fried, a partner at law firm Chadbourne & Park LLP who represents clients bidding for privatization deals. "Here you have the opportunity to use private investment in infrastructure to create millions of jobs."

. . .

Business lobbyists also note that Mr. Obama supports the creation of a National Infrastructure Bank, which could leverage federal funds by pairing them with private investments.

. . .

Private groups hope the stimulus bill will contain incentives for states to work with banks and other investment groups in choosing which projects to fund, but that may be unlikely given the bill's focus on projects that quickly put money to work. Banks may have a better chance of persuading cash-strapped governors to turn to private capital to fund transportation projects.

http://online.wsj.com/article/SB123249627623600271.html


Privatization of roads part of stimulus package?
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:21 PM
Response to Reply #81
82. ah, the smarmy vultures are hanging out near the checkbook again
:sheesh:

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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Wed Jan-21-09 05:53 PM
Response to Original message
84. end of the day thingies
Dow 8,228.10 Up 279.01 (3.51%)
Nasdaq 1,507.07 Up 66.21 (4.60%)
S&P 500 840.24 Up 35.02 (4.35%)
10-Yr Bond 2.526% Up 0.181

NYSE Volume 7,403,005,000
Nasdaq Volume 2,142,189,000

4:30 pm : A bit of short-covering helped fuel a relief rally among stocks Wednesday. The S&P 500 closed 4.4% higher, but that still wasn't enough to offset the prior session's 5.3% drop.

Concerted leadership from the financial sector helped drive the rebound. The ascent by financials was partly triggered by the recognition that the sector was looking oversold, having lost more than 35% in the two weeks leading up to the open. Better-than-expected results from Northern Trust (NTRS 57.51, +13.58) and word that insiders were making big purchases at Bank of America (BAC 6.68, +1.58) also provided support.

Northern Trust reported fourth quarter earnings of $1.39 per share, which is $0.47 more than the $0.92 per share consensus estimate. Its shares responded by advancing 31%.

Bank of America saw its stock rebound 31% after regulatory reports revealed company directors purchased the stock in the prior session, which marked a multiyear low. CEO Ken Lewis purchased some 200,000 shares at prices ranging from $5.75 to $6.06 per share.

Shares of Bank of New York Mellon (BK 23.00, +4.24) registered strong gains after disclosing quarterly results that outshined State Street's (STT 17.07, +2.18) latest results, which were announced yesterday. Concerns regarding increased risks at State Street led Moody's to downgrade State Street's credit rating.

U.S. Bancorp (USB 16.09, +0.75) posted earnings of $0.15 per share, which failed to meet the $0.22 per share that Wall Street forecast. The stock traded in the red for much of the session, but managed to close with a gain.

U.S. Bancorp indicated during its conference call that earnings should be able to more than cover its dividend. However, if conditions become increasingly impaired, the company indicated it will not preserve the dividend.

Citigroup (C 3.67, +0.87), meanwhile, cut its quarterly dividend to $0.01 per share in connection with receiving TARP funds. The quarterly dividend was $0.16 per share.

Financials finished the session 14.6% higher. Their leadership helped rebuff a midmorning selling effort that took the broader market back to the neutral line.

IBM (IBM 91.42, +9.44) provided leadership to all three major indices. IBM reported fourth quarter earnings of $3.28 per share, which is $0.25 better than the consensus estimate of $3.03 per share. IBM also expects 2009 earnings to be at least $9.20 per share, which is more than the $8.75 per share that Wall Street forecast.

IBM's strength helped the tech sector, which is the largest in the S&P 500, advance 5.4% this session.

Health care, currently the second largest sector in the S&P 500, advanced 2.2% with help from Abbott Labs (ABT 52.32, +3.12). Abbott reported in-line quarterly results and reaffirmed its outlook, which is also in-line with expectations.

All 10 economic sectors finished higher. Whether the bounce is sustainable will only be seen in time. Many market participants believe that the broader market will not begin staging a sustainable rally until financials stabilize. DJ30 +279.01 NASDAQ +66.21 NQ100 +4.3% R2K +5.3% SP400 +4.6% SP500 +35.02 NASDAQ Dec/Adv/Vol 693/2037/2.11 bln NYSE Dec/Adv/Vol 632/2462/1.74 bln
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