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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 04:38 AM
Original message
STOCK MARKET WATCH, Thursday March 26
Source: du

STOCK MARKET WATCH, Thursday March 26, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 2

AT THE CLOSING BELL ON March 25, 2009

Dow... 7,749.81 +89.84 (+1.17%)
Nasdaq... 1,528.95 +12.43 (+0.82%)
S&P 500... 813.88 +7.63 (+0.95%)
Gold future... 938.00 +12.00 (+1.30%)
30-Year Bond 3.72% +0.11 (+3.08%)
10-Yr Bond... 2.77% +0.12 (+4.45%)




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 Thu Mar-26-09 04:41 AM
Response to Original message
1. Market WrapUp
Never Forget, This Will Be a Process, Not an Event
BY CHRIS PUPLAVA


With the markets up more than 20% off the early March lows, its hard not to get overly excited, but that is exactly what I think investors need to do right here and now. While many of the fundamental and technical indicators I follow are far more constructive than they were heading into this year, suggesting the market is showing signs of A bottom, I still believe that those who jump head long into this market may find that the water is far shallower than they think. Just as easily as the tide of momentum flows in and raises the water levels it can easily flow out just after investors have already jumped in, causing considerable pain. I believe every investor needs to hammer into their heads, tape to their computer monitors, and post on their office walls two things: one a phrase and another, an image. These two things will go a long way in helping investors not to lose focus. The phrase is the title to this article, This will be a process, not an event, and the image below comes from an article in Barrons of an interview with Ray Dalio from Bridgewater Associates. An excerpt from the Barrons article is given below (emphasis added).

Recession? No, It's a D-process, and It Will Be Long

Let's call it a "D-process," which is different than a recession, and the only reason that people really don't understand this process is because it happens rarely. Everybody should, at this point, try to understand the depression process by reading about the Great Depression or the Latin American debt crisis or the Japanese experience so that it becomes part of their frame of reference. Most people didn't live through any of those experiences, and what they have gotten used to is the recession dynamic, and so they are quick to presume the recession dynamic. It is very clear to me that we are in a D-process

The D-process is a disease of sorts that is going to run its course.

When I first started seeing the D-process and describing it, it was before it actually started to play out this way. But now you can ask yourself, OK, when was the last time bank stocks went down so much? When was the last time the balance sheet of the Federal Reserve, or any central bank, exploded like it has? When was the last time interest rates went to zero, essentially, making monetary policy as we know it ineffective? When was the last time we had deflation?

The answers to those questions all point to times other than the U.S. post-World War II experience. This was the dynamic that occurred in Japan in the '90s, that occurred in Latin America in the '80s, and that occurred in the Great Depression in the '30s


.....

The deleveraging process is alive and well in terms of delinquency rates of various assets, from residential real estate to credit cards. Residential real estate 60 day+ delinquency rates continue to rise from subprime to prime mortgages, with subprime delinquency rates resting at 33.94% and prime delinquency rates venturing into double digit territory at 11.22%. As the deleveraging process picks up steam we are seeing a spike in credit card delinquency rates. While Citigroups CEO Vikram Pandit helped spark a rally with the mention that the bank was seeing profits in the first quarter, he didnt mention the dramatic spike in Citigroups credit card delinquency rates (pink line below). While credit card delinquency rates for other issuers may not show quite the dramatic spike that Citigroup does, the image below makes it abundantly clear that not only have delinquency rates not peaked, but they are actually accelerating as consumer balance sheets deteriorate amidst dramatic job losses. Comments on the trends in mortgage and credit card delinquency rates from the CEO of FICO in a CNBC interview make clear the point that we are not out of the woods yet and we should not become too caviler.

http://www.financialsense.com/Market/wrapup.htm
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 04:44 AM
Response to Original message
2. Today's Reports
08:30 Initial Claims 03/21
Briefing.com 645K
Consensus 650K
Prior 646K

08:30 Q4 GDP - Final Q4
Briefing.com -6.6%
Consensus -6.6%
Prior -6.2%

08:30 GDP Price Index Q4
Briefing.com 0.5%
Consensus 0.5%
Prior 0.5%

http://www.briefing.com/Investor/Public/Calendars/Econo...
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Pale Blue Dot Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:34 AM
Response to Reply #2
34. Initial claims 652K. GDP slightly less bad than expected at -6.3.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:52 AM
Response to Reply #34
36. line item reports:
10. U.S. 4Q GDP revised down to -6.3% vs. -6.2%
8:30 AM ET, Mar 26, 2009

16. U.S. 4Q GDP revision better than -6.7% expected
8:30 AM ET, Mar 26, 2009

17. U.S. 4Q GDP lowest since 1982
8:30 AM ET, Mar 26, 2009

18. U.S. 4Q final sales fall 6.2%, lowest since 1980
8:30 AM ET, Mar 26, 2009

19. U.S. 4Q consumer spending falls 4.3%, most since 1980
8:30 AM ET, Mar 26, 2009

20. U.S. 4Q business investment falls 21.7%, most since 1975
8:30 AM ET, Mar 26, 2009

21. U.S. 4Q corporate profits down 16.5%, biggest drop since '53
8:30 AM ET, Mar 26, 2009

22. U.S. weekly initial jobless claims rise 8,000 to 652,000
8:30 AM ET, Mar 26, 2009

23. U.S. 4-week average initial claims falls 1,000 to 649,000
8:30 AM ET, Mar 26, 2009

24. U.S. ongoing jobless claims rise 122,000 to record 5.56 mln
8:30 AM ET, Mar 26, 2009

25. U.S. 4-week avg ongoing claims up 123,750 to record 5.33 mln
8:30 AM ET, Mar 26, 2009
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 04:47 AM
Response to Original message
3. Oil rises in Asia on positive US data, stocks
TOKYO Oil prices rose above $53 a barrel in Asia Thursday as encouraging U.S. data on durable goods orders and home sales spurred hopes for a recovery in crude demand.

Gains in U.S. and Asian stock markets also supported oil prices, and the uptick in sentiment appeared to be enough to temper concerns over sharply accumulating inventories in the U.S.

.....

Oil prices fell Wednesday the contract sank $1.21 to settle at $52.77 a barrel on news that crude in storage last week rose 3.3 million barrels to 356.6 million barrels, according to the Energy Information Administration Wednesday, much more than what was expected. The figure marks a 15.6 percent rise from year-ago levels, and stockpiles are now at their highest level since 1993.

But traders seemed to shake that off amid hopeful signs in the U.S., the world's biggest oil consumer. Durable goods orders increased a better-than-expected 3.4 percent last month, the first advance since July and the strongest one-month gain in 14 months, the Commerce Department said. New home sales also rebounded, rising 4.7 percent to a seasonally adjusted annual rate of 337,000.

.....

In other Nymex trading, gasoline for April delivery gained 0.46 cent to $1.4996 a gallon, while heating oil rose 0.33 cent to $1.4680. Natural gas for April delivery fell 0.4 cent to $4.325 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 04:52 AM
Response to Original message
4. Congress Passes Wide-Ranging Bill Easing Bank Laws
from DailyKos diarist DrSteveB

This is a fun read from the NY Times in November 1999 Congress Passes Wide-Ranging Bill Easing Bank Laws

It's about the repeal of the Glass-Steagall Act which

opens the door for a new era on Wall Street in which commercial banks, securities houses and insurers will find it easier and cheaper to enter one another's businesses.

.....

Larry Summers who of course in now back in charge, said at the time:

''Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,'' Treasury Secretary Lawrence H. Summers said. ''This historic legislation will better enable American companies to compete in the new economy.''

.....

I mean who could have predicted...?

...Well actually:

The opponents of the measure gloomily predicted that by unshackling banks and enabling them to move more freely into new kinds of financial activities, the new law could lead to an economic crisis down the road when the marketplace is no longer growing briskly.

''I think we will look back in 10 years' time and say we should not have done this but we did because we forgot the lessons of the past, and that that which is true in the 1930's is true in 2010,'' said Senator Byron L. Dorgan, Democrat of North Dakota. ''I wasn't around during the 1930's or the debate over Glass-Steagall. But I was here in the early 1980's when it was decided to allow the expansion of savings and loans. We have now decided in the name of modernization to forget the lessons of the past, of safety and of soundness.''

Senator Paul Wellstone, Democrat of Minnesota, said that Congress had ''seemed determined to unlearn the lessons from our past mistakes.''


much more...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 06:45 AM
Response to Reply #4
18. While We Are Revising History--40 Years Ago The Fed Monetized the Debt
Edited on Thu Mar-26-09 06:56 AM by Demeter
So Lyndon Baines Johnson and Nixon after him could get his guns as well as his butter. Instead of shutting down a damning war in Vietnam, they both persisted to appease the warmongers. LBJ'S liberal bias brought in the Great Society, and Nixon tried with his plan to put a floor under every household's income. There isn't much left of that Great Society, I suspect. Nobody's commented on it lately.

Oh, and to get out of the spiraling inflation caused by monetization? Paul Volcker raised the prime rate to 21% ultimately, practically shut down major portions of the country. For which he got replaced by Alan Greenspan, and the rest is too painful to recount. Want to relive the 80's? I sure don't.

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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 08:44 AM
Response to Reply #18
41. Great Society? Ok. Can't resist playing this:
Edited on Thu Mar-26-09 08:48 AM by Ghost Dog
http://www.youtube.com/watch?v=Quhj6PEboCU (Jefferson Airplane (Grace Slick) - White Rabbit).

To be followed if possible by (or come here first, if you've the head for it): http://www.youtube.com/watch?v=YddV91xnUz4 (grace slick & the great society-white rabbit).

...

Let's do this again, in the present circumstances, why not (Cultural Revolution)?


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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 09:31 AM
Response to Reply #41
43. When logic and proportion have fallen sloppy dead.
Great line.

And don't forget to feed your head.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 09:36 AM
Response to Reply #43
46. Chasing the Rabbit, and you know you're going to fall...
Edited on Thu Mar-26-09 09:38 AM by Ghost Dog
Right on. :smoke:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 11:18 AM
Response to Reply #41
63. Excellent theme song for this thread--Thanks!
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Hissyspit Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:12 AM
Response to Reply #4
28. Wow...
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Roland99 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 10:48 AM
Response to Reply #4
54. That deserves its own thread to be kicked and recommended to the highest heights.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 04:57 AM
Response to Original message
5. Sources: Extensive regulatory overhaul planned
WASHINGTON The Obama administration is proposing an extensive overhaul of financial regulations to increase oversight of such exotic instruments as credit default swaps that have been blamed for contributing to the worst financial crisis to hit the country in seven decades.

.....

Officials said Wednesday that the administration will seek to regulate the market for credit default swaps and other types of derivatives and require hedge funds to register with the Securities and Exchange Commission.

.....

The administration is proposing that hedge funds and other private pools of capital, including private equity funds and venture capital funds, be required to register with the SEC if their assets exceeded a certain size. The threshold amount has yet to be determined, officials said.

The proposal on credit default swaps and other derivatives would require the markets on which they are traded to be regulated for the first time and for the buying and selling of these instruments to be conducted in a way that will foster greater oversight.

Credit default swaps, which trade in a $60 trillion global market without government oversight, are contracts to insure against the default of financial instruments like bonds and corporate debt. They played a prominent role in the credit crisis that brought the downfall of investment banking giant Lehman Brothers Holdings Inc. last fall and pushed insurance giant American International Group Inc. to the brink of collapse, forcing the government to provide more than $180 billion in support.

http://news.yahoo.com/s/ap/20090326/ap_on_bi_ge/financi...
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spotbird Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 01:29 PM
Response to Reply #5
70. Obama Backs Banks, Seeks to Block State Fair-Lending Crackdown
March 26 (Bloomberg) -- The Obama administrations call for greater financial regulation may have its limits.

The administration late yesterday urged the Supreme Court to bar New York and other states from enforcing their fair- lending and other consumer-protection laws against federally chartered banks including JPMorgan Chase & Co. and Wells Fargo & Co.

The legal brief, which adopts the Bush administrations position, is a setback for consumer and civil-rights groups that had urged President Barack Obamas team to switch positions. The filing puts the administration at odds with New York Attorney General Andrew Cuomo over the respective roles of state and federal regulators. The high court will hear arguments April 28.

National banks are created by the government to serve federal purposes, argued Solicitor General Elena Kagan, the Obama administrations top courtroom lawyer. She said that oversight of the banks is therefore principally entrusted to the United States.

The court filing coincides with this weeks proposal by the administration to put large hedge funds, private-equity firms and derivatives under federal supervision for the first time.




http://www.bloomberg.com/apps/news?pid=20601087&sid=aCd...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 04:59 PM
Response to Reply #70
79. Makes One Wonder Which Side the Prez is On, Doesn't It?
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:23 PM
Response to Reply #79
87. And of course some of us have been wondering. . . .
. ... for quite a while.

In fact, I've reached the point where I'm wondering just exactly what Obama has done for our side so far. Lifted the global gag rule. Restarted stem cell research. Anything else?




Tansy Gold
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:11 AM
Response to Original message
6. Economy shows positive signs but it may not last
WASHINGTON Orders to U.S. factories for big-ticket manufactured goods and new homes sales both rose unexpectedly in February, but economists said the gains were unlikely to last as the recession persists.

....

Last month's strength in durable goods orders was led by a surge in orders for military aircraft and parts, which shot up 32.4 percent. Demand for machinery, computers and fabricated metal products also rose.

Still, the rebound in both factory orders and new home sales may be temporary. Upticks in retail sales and housing starts last month, along with a private sector group's index of leading economic indicators dropping less than expected were welcomed, but none were viewed as sustainable given all the problems facing the economy. And a large drop in durable goods orders in January was revised even lower, bolstering estimates that February data represented a blip.

....

The government is scheduled to report Thursday on the overall economy. Economists believe that data will show the economy falling at an annual rate of 6.5 percent in the final three months of last year, even deeper than the 6.2 percent drop in the gross domestic product reported a month ago.

http://news.yahoo.com/s/ap/20090325/ap_on_bi_go_ec_fi/e...



If I may don my Economics teacher hat here: Remember that GDP is an aggregate number expressed algebraically as Y = C+I+G+Nx. Whereas this figure can be tweaked and exaggerated - especially through government expenditures (the 'G' in the algorithm) these days when discretionary consumer and investment spending ('C' and 'I') are falling off a cliff.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:15 AM
Response to Reply #6
7. Ahh... Here's news on another part of the GDP algorithm. (my apologies for the wonkish flurry)
Edited on Thu Mar-26-09 05:25 AM by ozymandius
That would be net exports ('Nx')...

Fed's Lockhart: U.S. exports won't spur 2009 recovery

PARIS (Reuters) U.S. exports, which supported economic growth until collapsing at the end of 2008, are unlikely to fuel a rebound this year, a Federal Reserve official said on Thursday.

"In my economic outlook for the remainder of 2009, I do not expect a sudden return of exports as a driver of recovery in the United States," Atlanta Fed President Dennis Lockhart said in remarks prepared for delivery to a conference.

A decades-long expansion of global trade came to a juddering halt in the fourth quarter last year as global trade financing collapsed amid a broader credit freeze, Lockhart said in a speech to a conference on food and water stability organized by the Global Interdependence Center and Bank of France.

"The recent sharp contraction of trade appears to be far more severe than would be expected given the decline in global economic activity," he said.

more...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 08:51 AM
Response to Reply #7
42. So, export military aircraft and parts?
Edited on Thu Mar-26-09 08:54 AM by Ghost Dog
Nah. Already doing that. Nothing new there. No-brainer.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:25 PM
Response to Reply #42
88. Yes and No.
Purchase military aircraft and parts. That shows as the 'G' side of the GDP equation. Exportation however does not show up as a net export sum.

It might be really interesting if something abstract were introduced to the GDP model. Like chaos, for example. Our former political regime specialized in Chaos Capitalism.
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janedum Donating Member (374 posts) Send PM | Profile | Ignore Thu Mar-26-09 07:11 AM
Response to Reply #6
26. How can the economy show positive signs when ..
600,000 people a month are losing jobs.
The U.S. manufactures NOTHING! What are we exporting?
ROFLMAO!!
New homes sales are up because home prices have DROPPED 30%.
Uptick in retail sales? HA! Just a blip in the radar!
People are NOT spending what little money they have. NOT!!
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burf Donating Member (745 posts) Send PM | Profile | Ignore Thu Mar-26-09 07:49 AM
Response to Reply #26
35. The only reason I
could in anyway believe there is an increase in spending is that people are using their income tax refunds to purchase items that have been on the back burner for the past year.
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 09:42 AM
Response to Reply #26
48. You're absolutely right. People need jobs.
I won't believe there's a real turnaround until we see the number of jobs increase. We need about a million new jobs a year just to keep up with population growth. We added 3 million over the last 8 years--5 million short. And now we're bleeding jobs like an arterial wound. Unemployment here in Michigan hit 12%. That's the official number. The real number is something like holy fuck percent.
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Festivito Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:19 AM
Response to Original message
8. Debt: 03/24/2009 11,046,928,257,010.20 (UP 5,216,712,704.86) (Small plus FICA.)
(Small moves.)

= Held by the Public + Intragovernmental(FICA)
= 6,746,864,697,941.99 + 4,300,063,559,068.21
UP 222,913,900.31 + UP 4,993,798,804.55

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: $9.8, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,035,743 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,096.86.
A family of three owes $108,290.57. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 9,693,961,816.63.
The average for the last 30 days would be 6,785,773,271.64.
The average for the last 28 days would be 7,270,471,362.47.
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$/day.
There were 44 reports in 63 days of Obama's part of FY2009 averaging 0.56B$ per report, 0.46B$/day so far.
There were 119 reports in 175 days of FY2009 averaging 8.59B$ per report, 5.84B$/day.

PROJECTION:
There are 1,398 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 21.2T$.
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)
03/24/2009 11,046,928,257,010.20 BHO (UP 420,051,208,097.12 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: 1,022,203,360,097.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/04/2009 +000,625,214,862.41 ------------********
03/05/2009 +006,943,273,604.61 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********

93,040,251,893.45 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,382,296,453,751.13 in last 187 days.
That's 1,382B$ in 187 days.
More than any year ever, including last year, and it's 136% of that highest year ever only in 187 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 187 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 Mar-26-09 02:36 PM
Response to Reply #8
74. Debt: 03/25/2009 11,037,916,881,157.83 (DOWN 9,011,375,852.37) (Moslty FICA.)
(Very small public debt move. Mostly the FICA part took a quick drop. Time to get those monthly SS checks out.)

= Held by the Public + Intragovernmental(FICA)
= 6,746,924,596,902.85 + 4,290,992,284,254.98
UP 59,898,960.86 + DOWN 9,071,274,813.23

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: $9.8, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,041,915 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,066.68.
A family of three owes $108,200.05. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 9,543,697,620.51.
The average for the last 30 days would be 6,680,588,334.36.
The average for the last 28 days would be 7,157,773,215.38.
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$/day.
There were 45 reports in 64 days of Obama's part of FY2009 averaging 0.41B$ per report, 0.38B$/day so far.
There were 120 reports in 176 days of FY2009 averaging 8.44B$ per report, 5.76B$/day.

PROJECTION:
There are 1,397 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 21.0T$.
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)
03/25/2009 11,037,916,881,157.83 BHO (UP 411,039,832,244.75 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: 1,013,191,984,245.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/05/2009 +006,943,273,604.61 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********
03/25/2009 +000,059,898,960.86 ------------*******

92,474,935,991.90 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,373,285,077,898.76 in last 188 days.
That's 1,373B$ in 188 days.
More than any year ever, including last year, and it's 135% of that highest year ever only in 188 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 188 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 Thu Mar-26-09 05:25 AM
Response to Original message
9. White House team to overhaul fiendish US tax code (fiendish?)
WASHINGTON (AFP) The White House Wednesday announced a new task force headed by former Federal Reserve chairman Paul Volcker to reform the Byzantine US tax code in the hope of recouping billions in lost revenue.

White House budget chief Peter Orszag said Volcker and four other top economists will report their recommendations back to President Barack Obama by December 4, and their review will cover three main areas.

"One is tax simplification, the second is closing tax loopholes and reducing tax evasion, and the third is reducing corporate welfare," the director of the Office of Management and Budget told reporters.

....

The task force will have two constraints: it cannot recommend any tax increases in 2009 or 2010, and it cannot call for taxes to be raised on families earning less than 250,000 dollars a year.

http://news.yahoo.com/s/afp/20090325/pl_afp/uspoliticse...
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 06:57 AM
Response to Reply #9
20. Ah, yes, I remember well when Reagan did a tax overhaul.
He said he was "simplifying" the tax code (Tax Reform Act of 1986). A tax accountant gave us a presentation. Said he wasn't worried about losing business "because here's the old tax code" and he holds up a thick book "and here's the new tax code" and holds up a book twice as thick. In DC, "simplifying" means "making things thicker." It sounds just like English, but the words have different meanings.

TRA86 was supposed to reduce taxes, also. BUT, according to the United States Treasury, it actually raised taxes. See http://www.ustreas.gov/offices/tax-policy/library/ota81... Page 16 has a nice table. The second part, in 1992 dollars, gives a good way to compare various tax increases and decreases. For instance, it shows the Tax Equity and Fiscal Responsibility Act of 1982 (Reagan era) increased taxes more than the Omnibus Budget Reconciliation Act of 1993 (Clinton era).
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:14 AM
Response to Reply #20
30. Oh, there are good graphs, too!
Just a few pages later. I didn't look at the whole pdf file before I posted.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:30 PM
Response to Reply #20
89. I remember the press conference signing ceremony on tee-vee.
He sat at a desk with the bill set to one side of the table. It was eight inches thick. "Greatly simplify the tax code" my ass.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:11 AM
Response to Reply #9
27. IRS challenges AIG unit tax deals: report
http://www.reuters.com/article/businessNews/idUSTRE52N1...

(Reuters) - The U.S. Internal Revenue Service is challenging some of the tax deals structured by AIG Financial Products Corp, the unit of the giant insurer that has caused political outrage over $165 million in employee bonuses, the Wall Street Journal said.

Some banks that received government-funded payouts to settle contracts with American International Group turned to the insurer for help cutting their income taxes in the U.S. and Europe, the paper said, citing court records and people familiar with the business. The company paid $61 million last year in disputed taxes stemming from the deals, but sued the U.S. government last month in federal court in New York, seeking a refund, the paper said, citing filings in the case.

Banks that worked with AIG on tax deals include France's Credit Agricole SA, Bank of Ireland and Bank of America Corp, the paper said, citing AIG's lawsuit. The banks declined to comment to the paper.

In general, AIG's tax deals permitted U.S. companies and foreign banks to effectively claim credit in their home country for a single tax payment, partly through the use of an offshore AIG subsidiary, the paper said.

In its lawsuit against the government, the insurer said it was told by the IRS that AIG hadn't shown that the transactions "had sufficient economic substance and business purpose" to justify tax benefits, the paper said. The IRS declined to comment to the paper.

...more...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:33 AM
Response to Original message
10. Treasuries Fall as Stocks Gain, Cutting Demand Before Auction
Geithner is sweating this I'll bet.


March 26 (Bloomberg) -- Treasury notes fell for a sixth day, the longest losing streak in almost five months, after gains in Asian stocks cut demand for government debt just as the U.S. prepares to sell $24 billion of seven-year notes.

U.S. securities are dropping even after the Federal Reserve bought $7.5 billion of Treasuries yesterday, its first targeted purchases since the 1960s. Government reports today will show the worlds largest economy shrank the most since 1980 in the fourth quarter and the pace of firings accelerated last week, economists said.

Supply is overwhelming the market, said Satoshi Okumoto, general manager in Tokyo at Fukoku Mutual Life Insurance Co., which has $58.2 billion in assets. Yields should rise.

.....

Seven-year yields rose two basis points to 2.36 percent. They have declined from 2.748 percent at the last auction of the securities on Feb. 26. Investors at that sale, the first since 1993, bid for 2.11 times the amount of debt on offer.

.....

The Treasury Department is selling a record $98 billion in notes this week. The U.K. failed to attract enough bidders yesterday at an auction of 1.75 billion pounds ($2.55 billion) of gilts for the first time in almost seven years.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a4L...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 06:00 AM
Response to Reply #10
14. Optimism over U.S. economy boosts Asia stocks
HONG KONG (Reuters) - Asian stocks rose to their highest in nearly three months on Thursday, led by energy and financial shares, and oil climbed on hopes the U.S. economic slowdown may be easing.

...

The U.S. dollar steadied against major currencies after tumbling overnight on comments from U.S. Treasury Secretary Timothy Geithner that he was open to expanding the use of the International Monetary Fund's special drawing rights, appearing to endorse an idea put forward by China.

Regional bonds were hit by stock market gains, while U.S. Treasuries steadied after falling on Wednesday on concerns that a planned surge in government debt supply to fund stimulus plans would exceed demand.

Strong U.S. housing and durable goods data fed a global equity rally that has persisted for nearly three weeks, based on scattered signs of stabilization and confidence the financial sector has seen its worst days.

...

The MSCI index of Asia-Pacific stocks outside Japan (^MIAPJ0000PUS - News) gained for a fourth consecutive session and climbed 2.1 percent to the highest since January 8.

Japan's Nikkei average (Osaka:^N225 - News) finished 1.8 percent higher, with large exporters such as Canon Inc (Tokyo :7751.T - News) and Sony Corp (Tokyo:6758.T - News) among the biggest boosts to the index.

Hong Kong's Hang Seng index jumped 3.4 percent, propelled by a 13 percent gain in Industrial and Commercial Bank of China (HKSE:1398.HK - News) after Goldman Sachs said it would extend the lockup on most of its stake in the firm.

An easing of concerns about the U.S. economy and its banks, plus hopes the U.S. government is getting to grips with toxic assets has fueled a rise of 18 percent in the MSCI ex Asia index so far this month.

...

Geithner told policy makers and business executives at the Council on Foreign Relations that he was "quite open" to a Chinese suggestion to move toward greater use of SDRs, a basket of dollars, euros, sterling and the yen, used by the IMF.

Earlier this week, Chinese central bank governor Zhou Xiaochuan said the world should consider using the IMF's SDRs basket as a super-sovereign reserve currency.

But the dollar pared losses after Geithner reiterated that he expected the currency to remain the top reserve currency for a long time.

"The dollars reaction to his comments demonstrates that even statements by a US Treasury Secretary who clearly has not yet worked out that he has to choose his words carefully cannot question the role of the dollar as reserve currency -- if for no other reason than lack of alternatives," said Commerzbank currency strategists in a note.

/... http://finance.yahoo.com/news/Optimism-over-US-economy-...
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janedum Donating Member (374 posts) Send PM | Profile | Ignore Thu Mar-26-09 07:07 AM
Response to Reply #10
22. Futures UP Huge this a.m. .. Spring Rally in Full Force!!
Thank G*D for Spring Rallies!
If you're still holding stocks, you get to dump your losers before the next drop.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:09 AM
Response to Reply #22
25. Welcome Aboard, Jane!
We are a lifeboat of infinite capacity.
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54anickel Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 10:26 AM
Response to Reply #10
51. Poor, Timmay. Time to call for the calvary?
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 11:06 AM
Response to Reply #51
58. Cavalry, not Calvary
Calvary is NEXT month, when they try to raise the economy from the dead, after nailing it to a cross of debt.
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54anickel Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 11:13 AM
Response to Reply #58
60. DOH! Sorry, wasn't thinking - as usual.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 11:18 AM
Response to Reply #60
62. It makes a good innuendo, though. You can be my "straight man" any time!
Just love punning around.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:36 AM
Response to Original message
11. UPDATE 2-IBM to cut 5,000 jobs in U.S. - sources
NEW YORK, March 25 (Reuters) - IBM (IBM.N) will cut about 5,000 jobs in the United States, adding to similarly large cuts in the past few months, sources with knowledge of the matter told Reuters on Wednesday.

The job cuts will account for over 4 percent of IBM's U.S. workforce, which totaled around 115,000 at the end of 2008. The sources, who were not authorized to speak publicly on the issue, said the cuts will mostly be in IBM's global services business, which includes outsourcing and consulting services.

....

IBM has been hit by slower U.S. technology spending, and its fourth-quarter revenue fell 6.4 percent from a year ago, although it has fared better than many rivals thanks to its global footprint and a decreased emphasis on hardware sales.

http://www.reuters.com/article/rbssTechMediaTelecomNews...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:38 AM
Response to Original message
12. Toyota says U.S. sales still weak, Honda delays plant
TOKYO (Reuters) - U.S. auto industry sales are showing no signs of recovery from a weak start to the year, the president of Toyota Motor Corp (7203.T) said, as rival Honda Motor Co (7267.T) announced further delays to the start of a new factory in Japan.

U.S. car sales slumped by more than a third in January and February, taking them to 27-year lows. That has hammered profits across the industry and driven Detroit stalwarts General Motors Corp (GM.N) and Chrysler LLC to the brink of bankruptcy.

"Annualized sales in January and February were a little above 9 million, and we're hearing that March will be about the same if not worse than February," Toyota President Katsuaki Watanabe told a news conference to unveil the remodeled Crown Majesta sedan.

http://www.reuters.com/article/reuterscomService5/idUST...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 06:05 AM
Response to Reply #12
16. Nikkei hits 2-1/2-mth high on U.S. recovery hopes
TOKYO, March 26 (Reuters) - Japan's Nikkei average rose 1.8 percent to hit a 2-1/2-month closing high on Thursday as exporters such as Sony Corp (6758.T) gained after unexpectedly strong U.S. economic data sparked hopes for an economic recovery.

...

Adding to the market's bullish tone, a U.S. senior lawmaker said on Wednesday that an Obama administration task force is likely to recommend more aid for struggling U.S. automakers.

"Japanese stocks were boosted by speculation U.S. stocks will rise later in the day on expectations U.S. automakers could receive further aid," said Masayoshi Yano, a senior market analyst at Meiwa Securities. "Investors are turning a little more optimistic about the U.S. economy, also on economic data."

The benchmark Nikkei .N225 ended up 156.34 points at 8,636.33, its highest close since Jan. 9. The Nikkei has jumped nearly 1,600 points or over 22 percent from a 26-year closing low hit near 7,000 on March 10.

The broader Topix gained 1 percent to 826.81.

...

Wednesday was the last day for investors to buy many Japanese stocks and still get dividends on them for the financial year ending this month. This ex-dividend impact may be lopping about 70-80 points off the Nikkei average .N225, market analysts said.

The Nikkei was dragged down by the dividend factor in early trade then quickly recovered, underscoring the firmness in the market. That prompted speculators to cover short positions, traders said.

"Given the impact from ex-dividend, the rise in stocks was better than it appeared to be," said Fujio Ando, senior managing director of Chibagin Asset Management. "Share are likely to extend their rally until mid-April when corporate earnings figures start to come out, with the Nikkei possibly trying the 9,000 level soon."

Some institutional investors started to buy stocks for the new business year as Thursday's trades will be settled on April 1, when Japan's new fiscal year starts.

Trade was light on the Tokyo exchange's first section, with 1.9 billion shares changing hands, compared with last week's daily average of 2.2 billion.

Advancing stocks outnumbered declining ones by five to three.

EXPORTERS LEAD

Among exporters, Sony jumped 6.8 percent to 2,215 yen and Canon Inc (7751.T) climbed 3.5 percent to 2,965 yen. Advantest Corp (6857.T) gained 4 percent to 1,592 yen.

/... http://www.reuters.com/article/marketsNews/idCAT3749862...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:45 AM
Response to Original message
13. We knew this would happen. Big Banks are gaming the Geithner plan.
Buying Toxic Assets with Bailout Money

The NYPost reports the two biggest banking wrecks, CitiGroup and Bank of America, have been aggressively buying toxic assets with bailout money, and goosing the MBS auctions.

You can imagine why this might get people upset. I suspect its rather unavoidable. These banks have investment wings, and they are trolling for opportunities.

One Wall Street trader told The Post that whats been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.




This is how they install an artificial floor under their worthless assets. And they're doing it with our money.
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radfringe Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 06:17 AM
Response to Reply #13
17. I mentioned this a few days ago...
Treasury Presses Ahead With Plan For Toxic Assets
New Body to Work With Private Investors
By David Cho
Washington Post Staff Writer
Sunday, March 22, 2009; Page A01
http://www.washingtonpost.com/wp-dyn/content/article/20...

The Treasury Department will unveil the next step in its financial rescue efforts tomorrow, announcing that it intends to create a government body, called the Public Investment Corp., to finance the purchase of as much as $1 trillion in soured loans and toxic assets from ailing banks, according to sources.

The plan calls for the new entity to combine its resources with the Federal Deposit Insurance Corp., the Federal Reserve and private investors to buy those loans and other assets. But the government will put far more money into the deals and take on more risk than the investors, which could include hedge funds, private-equity firms, pension funds and foreign investors with U.S. headquarters, the sources said. The corporation will be funded with $75 billion to $100 billion from the $700 billion financial rescue package.

=============



The Public Investment Corp (PIC) - buys toxic assets from the banks/corps. It plans on at least partially using PRIVATE INVESTORS.

Ok - so who are these PRIVATE INVESTORS? Will the include the very same corporate banksters that got us in this mess in the first place? If so - WHAT A SWEET DEAL!

How so? Let's say I'm a bankster, I've got $100million toxic assets on my books, I sell them to PIC for $Xmillion, then I turn around and buy them back for even less than the "sale price" - after all I don't want to pay "full price" because these assets are Toxic.

Meanwhile, what regs are going to be put in place to ensure the "PRIVATE INVSESTORS" don't go all hog-wild again.
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newfie11 Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:15 AM
Response to Reply #13
31. hmmm, Kind of similar to a ponzi scheme?n/t
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 08:21 AM
Response to Reply #31
40. More Like Money Laundering and Raiding the Public Purse, Again
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 10:53 AM
Response to Reply #13
55. Related, recommended:
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 06:01 AM
Response to Original message
15. Gotta run.
Good morning to you. :donut: :donut: :donut:

I hope your day is an easy one. I'll check back when there's time.

:hi:
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 06:51 AM
Response to Original message
19. London G20 Summit: Last chance before global geopolitical dislocation (LEAP/E2020)
Edited on Thu Mar-26-09 06:52 AM by Ghost Dog
The LEAP/E2020 open letter to the G20 leaders, published in the Financial Times's worldwide edition on March 24, 2009, can be read here: http://leap2020.eu/London-G20-Summit-Last-chance-before... . I reproduce some of it below.

There is, further, a fascinating 55-minute interview with Franck Biancheri, director of studies of LEAP/E2020, in the program "Guns & Butter", March 25, 2009, on KPFA radio, out of Berkeley, CA, that discusses the background to this letter and can be listened to here: http://www.kpfa.org/archive/id/49464 .

Some extracts from the letter:

...

Until now you have merely been concerned with the symptoms and secondary effects of this crisis because, unfortunately, nothing prepared you to face a crisis of such an historic scale. You thought that adding more oil to the global engine would be enough, unaware of the fact that the engine was broken, with no hope of repair. In fact, a new engine must be built, and time is running out, as the international system deteriorates further each month.

In the case of a major crisis, one must get to the heart of the matter. The only choice is between undertaking a number of radical changes, thus greatly shortening the duration of the crisis and diminishing its tragic outcome or, on the contrary, refusing to make any such changes in an attempt to save what is left of the present system, thus extending the crisis duration and increasing all the negative consequences. In London, next April 2nd, you can either pave the way for the crisis to be solved in an organised manner in 3 to 5 years, or drag the world through a terrible decade.

We will content ourselves with giving you three recommendations that we consider strategic ones in the sense that, according to LEAP/E2020, if they have not been initiated by this summer 2009, global geopolitical dislocation will become inevitable from the end of this year onward.

LEAP'S THREE STRATEGIC RECOMMENDATIONS

1. The key to solving the crisis lies in creating a new international reserve currency!

...

You must ask the imf and concerned central banks to prepare this plan for June 2009, with an implementation date of January 1st, 2010. This is the only way for you to regain some control over currently unwinding events, and this is the only way for you to bring about shared global management, based on a shared currency located at the centre of economic and financial activity. According to LEAP/E2020, if this alternative to the currently collapsing system has not been initiated by this summer 2009, proving that there is another solution than the every man for himself approach, todays international system will not survive this summer.

...

2. Set up bank control schemes as soon as possible!

The second recommendation has already been mentioned many times in the preliminary debates to your upcoming summit. It should therefore be easy to adopt. It is about creating, before the end of this year, a scheme of bank control on a global scale, suppressing all the systems black holes .

...

3. Get the IMF to assess the US, UK and Swiss financial systems!

The third recommendation relates to a politically sensitive issue, which cannot be ignored. It is essential that, no later than July 2009, the imf presents to the G20 an independent assessment of the three national financial systems at the heart of the current financial crisis: US, UK and Switzerland.

/... http://leap2020.eu/London-G20-Summit-Last-chance-before...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 10:42 AM
Response to Reply #19
52. Brazil's Lula: Crisis will worsen if G20 fails
Thu Mar 26, 2009 11:11am EDT BRASILIA, March 26 (Reuters) - Brazil's President Luiz Inacio Lula da Silva said on Thursday that the global economic crisis will worsen if next month's G20 meeting in London fails to come up with concrete initiatives to bolster the world economy.

"If the G20 becomes a meeting just to set another meeting, we'll be discredited and the crisis can deepen," Lula said after meeting British Prime Minister Gordon Brown.

/.. http://www.reuters.com/article/marketsNews/idINN2648674...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 10:43 AM
Response to Reply #19
53. Currency issues will be discussed at G20-UK's Brown
Thu Mar 26, 2009 11:36am EDT BRASILIA, March 26 (Reuters) - British Prime Minister Gordon Brown said on Thursday that currency issues would be discussed at a crucial G20 financial summit next week.

"Yes, we'll discuss currency issues, yes we'll discuss fiscal issues," Brown told a news conference after meeting Brazil's President Luiz Inacio Lula da Silva.

/.. http://www.reuters.com/article/marketsNews/idINLQ491183...
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BelgianMadCow Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 11:43 AM
Response to Reply #53
66. Poll on main belgian financial paper's website
Edited on Thu Mar-26-09 11:44 AM by BelgianMadCow
Should the USD be abandoned as reserve currency - 65 % yes. Not scientific, but this is the Bush legacy imho.

When you lose credibility, so does your currency.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:04 PM
Response to Reply #66
80. I think We'd Be A Better Country Without That Burden
It's been an issue since the FIRST oil shock--1973, was it? The year I got a license and a car.
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BelgianMadCow Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 11:20 AM
Response to Reply #19
64. I read LEAP/2020 as well - the public parts, that is. And I expect the G20
to come up with "we remain committed to boosting the economy" - "we will come up with stronger regulation" and "we will not throw up trade barriers".

Different day, same shit
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 03:59 PM
Response to Reply #64
76. I think what they say makes a lot of sense. & I'm not at all hopeful.
It will be very difficult for US-UK to change.
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 04:22 PM
Response to Reply #19
77. New reserve currency could come quickly-Stiglitz
Thu Mar 26, 2009 5:10pm EDT UNITED NATIONS, March 26 (Reuters) - A reserve currency system based on an IMF unit instead of the U.S. dollar, a proposal floated by China, could be phased in within a year, Nobel Prize-winning economist Joseph Stiglitz said on Thursday.

Stiglitz, a Columbia University economics professor who heads a U.N. expert panel analyzing the financial crisis and recommending reforms, addressed an issue that became a hot topic this week.

Asked at a news conference when the International Monetary Fund's Special Drawing Rights (SDR) could replace the dollar as the top reserve unit, Stiglitz replied, "It could begin to be phased in next year.

He said the system could be phased in within 12 months. "Realistically, I don't think it'll happen that fast," Stiglitz said.

One of the main issues left to be worked out is how the SDRs would be allocated, he said.

The reserve currency topic is expected to come up at next Thursday's London summit meeting of the Group of 20 big developed and developing nations on the financial crisis.

Stiglitz's panel has issued a set of recommendations for global financial reforms, including a proposal for a new SDR-based reserve system.

In an 18-page report released on Thursday, the panel said such a system "could contribute to global stability, economic strength, and global equity." The panel said such an SDR system would be "feasible, non-inflationary, and could be easily implemented."

...

'DEFLATIONARY, UNSTABLE, UNFAIR'

Stiglitz said there was a "growing consensus that there are problems with the dollar reserve system." He added that economists have been discussing the weaknesses of single-currency reserve systems for decades.

"One of the problems (with single currency reserves) is that because of the huge level of volatility, countries are accumulating large amounts of reserves," he said.

The use of dollar reserves was also "contributing to the weakness of the global economy," the former World Bank chief economist said.

"The dollar reserve system is deflationary, unstable and it also has some inequity associated with it," Stiglitz said.

Stiglitz said the effect of the dollar reserve system is that developing countries have been lending the United States trillions of dollars at almost zero interest rates when they themselves desperately need that money.

"It's a net transfer, in a sense, to the United States of foreign aid," he said.

Brazil's President Luiz Inacio Lula da Silva also weighed in on the issue on Thursday. In a news conference with British Prime Minister Gordon Brown, he said it was important to discuss Russia's proposal but did not elaborate.

However, Canada's finance minister, Jim Flaherty, predicted in Ottawa that China's SDR proposal would not get much attention.

/... http://www.reuters.com/article/marketsNews/idINN2650403...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:04 AM
Response to Original message
21. Arianna Huffington: Take the Steering Wheel out of Geithner's Hands
http://www.huffingtonpost.com/arianna-huffington/geithn...


On February 10th, the New York Times reported that there had been a "spirited" battle within the Obama administration over restrictions on executive pay and bonuses, and over attaching stringent conditions to any bailout money given to banks.

The clash pitted Tim Geithner, who opposed the restrictions and conditions, against David Axelrod, who favored them. According to the Times, Geithner had "largely prevailed."

In light of what has happened since then, that outcome must now be viewed as a tragic surrender to Geithner, Summers, and the political/Wall Street class -- a "victory" that could lead to the unraveling of the president's entire economic policy.

Maintaining the public trust is always important for a leader, but especially so during hard times. There is a fascinating chapter on Nelson Mandela in Stan Greenberg's new book, Dispatches from the War Room, in which Greenberg writes about how even the revered Mandela suffered a loss of public confidence when change did not come fast enough after he took office. "Don't assume the current euphoria, even with your high approval rating will carry you through," Greenberg counsels Obama, stressing the need to try to build up enough trust so that the public will stay with the president until they can actually experience change.

The Axelrod camp understood this and, according to the Times' February story, argued that "rising joblessness, populist outrage over Wall Street bonuses and expensive perks, and the poor management of last year's bailouts could feed a potent political reaction if the administration did not demand enough sacrifices from the companies that receive federal money."

Axelrod was right. And his loss has already cost the young Obama administration a lot.

No wonder the public is not convinced when Geithner, having laid the groundwork that made the AIG bonuses possible, and having gotten Chris Dodd to include a bonus loophole in the stimulus bill, now acts shocked over the bonuses.

Geithner's feigned surprise at AIG has been a body blow to public confidence in the president. According to Sunday's Rassmussen poll, just 12 percent of those Rassmussen defines as "Populists" have a favorable opinion of Geithner while those Rassmussen identifies as "America's Political Class" have a 76 percent favorable opinion of him.

It was painful to watch Obama, just hours after Geithner had admitted his role in the Dodd/bonus loophole affair, go on Jay Leno and say that Geithner is doing an "outstanding job." Even before Frank Rich's Sunday column was titled "Has a 'Katrina Moment' Arrived?," Obama's assessment had more than a whiff of Bush telling Brownie he was "doing a heck of a job."

My dictionary defines outstanding as "excellent, exceptional, superior to others in the same category." So how could Obama say that and then, not a minute later, tell Leno that his administration plans to "open up separate credit lines outside of banks for small businesses" and "set up a securitized market for student loans and auto loans outside of the banking system" in order to "get credit flowing again"?

Back in January, after the Senate voted to release the second $350 billion tranche of TARP money, Obama had told the nation that he was "gratified" he'd been given the authority to "maintain the flow of credit to families and businesses."

Now, here he was, just over two months later, basically admitting that we have to find other ways to "maintain the flow of credit to families and businesses" -- completely contradicting a central tenet of the bank bailout, expressed by Axelrod in January when he told George Stephanopoulos that the president was "going to have a strong message for the bankers. We want to see credit flowing again. We don't want them to sit on any money that they get from taxpayers... And we have to make sure that the money doesn't go to excessive CEO pay and dividends when it should be going to lending."

Then Geithner happened. According to the Times, during the internal debate the Treasury Secretary "resisted those who wanted to dictate how banks would spend their rescue money." And we see how well that turned out.

The AIG bonus backlash is the first serious threat to the Obama administration. It has created an opening that allows conservatives to storm the populist barricades, suddenly acting like the second coming of Huey Long or Upton Sinclair.

Shameless opportunists like Mitch McConnell, Richard Shelby, and Eric Cantor, who have all argued against limiting executive pay and bonuses, are now positioning themselves in front of the populist parade, railing against AIG and pointing the finger at Obama for allowing this to happen on his watch.

Yes, the same free-market ideologues who were instrumental in bringing America to the brink of economic disaster are now arming themselves with pitchforks and torches.

It would be laughable if it weren't so dangerous -- serving to undercut the essential narrative of how we got into the current crisis and, therefore, how we can get out of it.

On Leno, the president lauded Geithner as "a smart guy...a calm and steady guy" who is dealing with a surfeit of crises "with grace and good humor." And he's clearly very hard working, reportedly arriving at the Treasury at 6:30 in the morning and leaving at 9:30 at night. But no one disputes Geithner's intelligence, steadiness, and work ethic.

And neither is the problem Geithner's lack of comfort in the public arena. "When you run a Fed bank," a senior Democratic operative told Chris Cillizza, "you live deep in a cave. just needs to get used to the sunlight."

But the issue isn't Geithner's delivery, it's what he's delivering: an approach to the crisis that is as toxic as the assets that have hamstrung the economy. Geithner, brilliant and hardworking though he is, is trapped within a Wall Street-centric view of the world and seems incapable of escaping.

That's why every proposal he comes up with is dj vu all over again -- a remixed variation on the same tried-and-failed let-the-bankers-work-it-out approach championed by his predecessor, Hank Paulson. For Paul Krugman, this "insistence on offering the same plan over and over again, with only cosmetic changes, is itself deeply disturbing. Does Treasury not realize that all these proposals amount to the same thing? Or does it realize that, but hope that the rest of us won't notice? That is, are they stupid, or do they think we're stupid?"

I don't believe Geithner thinks we're stupid (although he almost certainly doesn't think we're as smart as he is). He just can't change who he is: a creature of Wall Street, habitually sympathetic to the people at the top of the financial system, who he clearly thinks were born to run the world.

Geithner's actions throughout his career are proof that the toxic thinking that got us into this mess is part of his DNA.

While President of the New York Fed, he eliminated two key regulatory measures -- a quarterly risk report and a ban on major acquisitions -- that may have prevented (or at least lessened the impact of) the unraveling of Citigroup, which his office was responsible for supervising. Then, together with Hank Paulson, he was instrumental in the original bailout of AIG and the creation of the TARP plan. And he was a key player in the decision to let Lehman Brothers fail.

And now he surrounds himself with others who share his Wall Street Weltenschauung, including his chief of staff Mark Patterson, a former lobbyist for Goldman Sachs who had lobbied against then-Senator Obama's 2007 bill to reform CEO pay.

Geithner's Masters of the Universe, the people he still thinks are the ones we should turn to to save the day, are the same people who brought us here. And that is why Geithner either needs to go or keep his job but have his authority stripped and transferred to someone who does not share his Wall Street DNA. Call him or her the "Recovery Czar."

In other words, use any window dressing you want, just take the steering wheel out of Geithner's hands.

It might seem extraordinary to be calling for the resignation or demotion of President Obama's point man on our financial system.

But let me remind you of a few other things that are extraordinary: the government has spent $2.2 trillion and committed another $7.7 trillion to bolster America's struggling financial system; $7 trillion of shareholders' wealth was lost in the stock market in 2008; over 4.2 million jobs have been lost in the last 14 months; 2.3 million houses were foreclosed in 2008, with another 121,756 foreclosures last month alone.

Things that we never would have imagined are happening all around us. So this is a time for doing things that might have seemed unthinkable just a month ago.

A month ago... when Tim Geithner gambled the administration's political capital, putting his money -- actually our money -- on the behavior of bankers and CEOs who continue to operate as if it is business as usual.

A month ago... when Geithner crossed swords with Axelrod, winning the battle and losing the war.
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sendero Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:14 AM
Response to Reply #21
29. EXACTLY..
... nailed it 100%.
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Tansy_Gold Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 08:18 AM
Response to Reply #21
38. he he he he he he he he he he he he he he he
:hi:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 08:20 AM
Response to Reply #38
39. She is a Corker, sometimes, that Arianna
Morning, Tansy!
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 07:07 AM
Response to Original message
23. Slouching Towards Solvency: The system of securitizing loans became a doomsday machine. Robert Kuttn
Edited on Thu Mar-26-09 07:08 AM by Demeter
http://www.prospect.org/cs/articles?article=slouching_t...


President Obama has worked wonders with the budgetary part of the recovery program. But if he doesn't solve the banking and housing crises, the economy will continue collapsing. The latest programs from Treasury Secretary Timothy Geithner are both implausible and impolitic. Geithner's "public-private partnership" to jump-start bank lending would invite the same high rollers who caused the collapse to speculate in securitized bonds, this time with guarantees from the Federal Reserve. Supposedly, once these buyers appear, banks will resume normal lending. If the securities turn out to be worth something, the hedge funds and private-equity investors gain. If the investments go bad, the taxpayers lose. But that's not even the worst part.

This trillion-dollar scheme pays dearly to fetch buyers for newly issued bonds -- but doesn't create a market to help the banks unload the older toxic bonds issued during the bubble years. However, these older bonds are precisely the ones clogging bank balance sheets. If Geithner's plan doesn't address that part of the problem, it won't get the banking system functioning normally.

Meanwhile, the new $75 billion mortgage-relief plan is almost as flawed as the banking rescue. People are denied help if they've been late on even one monthly payment in the past year. But it is these struggling borrowers who need the most urgent help.

The plan permits refinancing, if the new mortgage can be brought down to 105 percent of the current depressed value of the house (thus excluding much of the Sunbelt where mortgages are typically much further underwater). Banks can try to negotiate workouts to reduce the principal value of the mortgage, but if the loan has been securitized, they must persuade the bondholder to eat the loss. The plan is designed primarily for loans held by banks, while most of the troubled mortgages are the "securitized" ones.

At the heart of this entire mess is the system of securitization, which dates only to the 1970s. In principle, it usefully allowed banks to sell off loans and thereby replenish cash to make other loans. But in practice, the system turned into an unsupervised doomsday machine. Not only did the system invite lenders to relax underwriting standards because some sucker down the line was absorbing the risk; more seriously it led to an aftermath that has proven impossible to unwind without having government temporarily take the big banks into receivership to sort out what's really on their books. This remedy is what Geithner hopes to avoid, thus prolonging the agony.

Rather, like Paulson before him, Geithner keeps pursuing more securitization, with the same futile results. Having speculators do the job cannot be done except at an unacceptably high price to taxpayers, with the added cost of inviting a new round of excess leverage and risk.

The refinancing of distressed mortgages, likewise, can only be done efficiently and quickly if government does it directly. This is what Franklin Roosevelt did with the Home Owners Loan Corporation. The seemingly insoluble problem of turning currently worthless mortgage-backed bonds back into loans can be solved using the government's power of eminent domain. Government could then compensate bondholders at so many cents on the dollar.

Recently, economist Alan Blinder, a former vice chairman of the Federal Reserve and occasional contributor to these pages, told The Wall Street Journal, "There has been somewhat of a collapse of the banking system, but an almost total collapse of the shadow banking system. Given our reliance on the latter, we need to get the shadow banking system revived." Ordinarily, I find Blinder a thoughtful and public-minded economist. But this view has it exactly backward.

The real challenge is to minimize the role of exotic securitization and to subject the shadow banking system to full regulatory scrutiny. Somehow, before 1975 businesses got ample credit, homeowners received mortgages, and entrepreneurs were hooked up with investors -- all without securitization. If there is a legitimate but limited role for turning loans into bonds, capital reserve requirements, disclosures, and greater scrutiny are all indicated. Geithner plans none of this.

Recently I interviewed the former governor of the Bank of India, Dr. Yaga Reddy, on how the Indian banking system, and by extension the Indian economy, has avoided catastrophe. India projects growth of about 7 percent in 2009, The New York Times recently reported. In the last quarter of 2008, India grew at 5.3 percent compared to a decline of 6.2 percent for the U.S. How did India dodge the financial bullet?

"We are a poor developing nation," Dr. Reddy explained. "We don't really understand these securities, so we don't permit our banks to use them. We leave them to the advanced nations like you."
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Mar-26-09 05:06 PM
Response to Reply #23
81. That Screams Out for a Rimshot
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