STOCK MARKET WATCH, Wednesday April 8

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday April 8, 2009

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

AT THE CLOSING BELL ON April 7, 2009

Dow... 7,789.56 -186.29 (-2.39%)
Nasdaq... 1,561.61 -45.10 (-2.81%)
S&P 500... 815.55 -19.93 (-2.39%)
Gold future... 883.30 +10.50 (+1.19%)
30-Year Bond 3.73% -0.03 (-0.77%)
10-Yr Bond... 2.91% -0.03 (-1.02%)

---

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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Read more: du

[ozymandius]

1. Market WrapUp

Tactical Analysis Part II: The Strong Bear Market Rally Outcome
BY FRANK BARBERA, CMT

In last week's review, we spent some time looking at the equity market from a dispassionate stance, first dwelling on some of the more potentially negative outcomes. In this week's update, we are going to spend some time looking to set up some parameters for getting a better idea of precisely what a “better than expected” stock market outcome might be. To this end, we have seen some potential progress, with the Financial Accounting Standards Board (FASB) showing a willingness to relax some of the very difficult accounting rules which have hampered the nation's banks. In addition, there are strong rumors that a second large stimulus program could be seen later this year, and that may help to jump start a late 2009 fledgling recovery. Of course, it is too soon to tell, but one thing we can be fairly confident about. If there is a recovery ahead, the US Equity market along with other world markets will likely pick it out in advance. The stock market tends to be quite good at sniffing out recoveries and turning higher in advance. In last week's update, I pointed out what is perhaps one of the strongest positives the stock market has going for it at the current time, namely, the idea that it has been so bad, it might be hard to get any worse.

.....

As the market steadily recovers in the bear market rally phase, the 50 day average begins to turn up more strongly, and at some point meets the declining 1 year moving average narrowing the spread, and possibly even turning the spread briefly positive. Yet where 2009 is concerned, I would argue strongly that an outcome like this is really about the BEST CASE outcome for the stock market, and for those who might not believe it, it is a very good outcome indeed. Why and how so? Well, this is one time when a little basic ‘Technical Analysis’ can really speak volumes, and where a little knowledge can help investors avoid what could otherwise be painful periods of time. You see, when moving averages get as far apart as they did in 2008 and in the early going of 2009, you can basically count on (a) some regression to the mean but also (b) the idea that the first attempt to cross-over will end in a failure. It is just the way markets change direction. Like ocean liners, the trend tends to change a little bit at a time, and the kind of severe price damage seen in the last 18 months will take real time to repair. That means that the first bear market rally, even if it is very powerful, will almost certainly burn itself out on the upside, and then give way to a second, ideally, much smaller and slower paced bear market decline. This second bear market phase is the 'retest’ phase and in a situation like the one we have today, you can really count on this as a reasonably high probability outcome. Retesting the lows can take months, as retest declines are usually a long and slow process.

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

[Demeter]

20. Whatever Drug He's On, I'd Like to Sample

It's probably addictive and rots out the organs, though.

[Dr.Phool]

23. It's worse than drugs. He's been watching CNBC and doing drugs.

Cramer called the bottom....again....for the sixth time.

I guess Roubini tore into him, and called him a buffoon.

http://www.nytimes.com/aponline/2009/04/08/world/AP-Canada-Roubini-Cramer.html?_r=2

TORONTO (AP) -- CNBC's Jim Cramer has another feud on his hands.

Just weeks after ''The Daily Show'' host Jon Stewart took Cramer to task for trying to turn finance reporting into a ''game,'' famous bear economist Nouriel Roubini criticized Cramer on Tuesday for predicting bull markets.

''Cramer is a buffoon,'' said Roubini, a New York University economics professor often called Dr. Doom. ''He was one of those who called six times in a row for this bear market rally to be a bull market rally and he got it wrong. And after all this mess and Jon Stewart he should just shut up because he has no shame.''

Cramer recently wrote in a blog that Roubini is ''intoxicated'' with his own ''prescience and vision'' and said Roubini should realize that things are better since the stock market bottom in March.

Roubini said in 2006 that the worst recession in four decades was on its way. He has attracted attention for his gloomy -- and accurate -- predictions of the U.S. financial market meltdown.

(snip)

[burf]

28. Weren't the cheerleaders at CNBS

the ones who told us over a year ago that "if" there was going to be a recession, it was going to be "short and shallow"? Cramer and his wife Maria Bartaloma (sp) are just a couple of court jesters for their financial overlords.

Good morning and great day to all!

[Tansy_Gold]

32. But but but

I thought court jesters generally told the truth.. . . . . . . .

[burf]

37. If so,

then I must have gotten court jester and village idiot mixed up! Please forgive me. My excuse is the old reliable, first cup of coffee.

[ozymandius]

49. They are our modern Raymond and Connie Marble.

Need background? Go here.

[amandabeech]

65. Cramer is married to Maria Bartiromo?

Surely you jest.

[AnneD]

66. Spouse is

Jonathan Steinberg-although I swear I have seen her all but servicing Jack Welch on her show.

It took me a while after that to watch her show with any degree of seriousness.:puke:

[amandabeech]

69. Well, at least it's not Cramer.

They all bow and scrape to Welch. It's sickening.

[ozymandius]

2. Today's Reports

10:00 Wholesale Inventories Feb
Briefing.com -0.6%
Consensus -0.6%
Prior -0.7%

10:30 Crude Inventories 04/03
Briefing.com NA
Consensus NA
Prior +2840K

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

[UpInArms]

47. U.S. Feb. wholesale inventories fall 1.5%

01. U.S. Feb. wholesale inventories fall 1.5%
10:05 AM ET, Apr 08, 2009

[UpInArms]

57. Petroleum Inventories Report:

06. U.S. gasoline inventories rise 600,000 barrels last week
10:33 AM ET, Apr 08, 2009

07. U.S. distillate inventories fall 3.4 million barrels
10:33 AM ET, Apr 08, 2009

08. U.S. crude inventories rise 1.7 million barrels last week
10:32 AM ET, Apr 08, 2009

[ozymandius]

3. Oil falls to $48, following stocks down

SINGAPORE – Oil prices fell Wednesday in Asia as crude markets followed equities down on waning optimism the U.S. economy will soon recover from a severe recession.

Benchmark crude for May delivery fell $1.11 to $48.05 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. The contract fell $1.90 on Tuesday to settle at $49.15.

....

Investors will be looking to the Energy Information Administration's weekly inventory report on Wednesday for a gauge of U.S. crude demand. The International Energy Agency will follow with its monthly global oil demand survey and outlook on Friday.

....

In other Nymex trading, gasoline for May delivery fell 3.64 cents to $1.42 a gallon and heating oil dropped 2.53 cents to $1.37 a gallon. Natural gas for May delivery was steady at $3.56 per 1,000 cubic feet.

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

[ozymandius]

4. Fed's Fisher says U.S. economy grim

TOKYO (Reuters) – The U.S. economy is grim, and the Federal Reserve is "duty bound to apply every tool" to clean up the financial system and clear a path for a return to sustainable growth, Richard Fisher, president of the Dallas Fed, said on Wednesday.

But he said monetary policy alone would not be enough to resuscitate the economy, adding fiscal stimulus was critical in providing a spark for U.S. growth.

....

Fisher, who is not a voting member on the Fed's policy-setting committee this year, said the U.S. economy probably shrank in the just-ended first quarter of 2009 at a rate similar to the 6.3 percent annual decline posted in the fourth quarter of 2008. He gave no timeline for a potential recovery.

....

With firms doing all they can to cut costs, and especially the cost of labor, the jobless rate is likely to hit 10 percent by year-end compared with 8.5 percent in March, he said. "Presently, the risk is deflationary job destruction."

http://news.yahoo.com/s/nm/20090408/bs_nm/us_usa_fed_fisher

[tclambert]

15. "Deflationary job destruction."

I'm gonna use that phrase. It sums up what I've been saying is the worst problem we have. So far, the economic solutions attempted have been like the old neutron bomb--they get rid of the people, but leave the banks standing. Freeing up credit markets only goes so far in stimulating spending. If people lose their jobs, that's an eroding customer base. So you also have "deflationary customer destruction."

[ozymandius]

18. This, too, feeds every variety of unemployment.

Structural unemployment included. When jobs disappear because the market for those skills is no longer needed, but should be needed, then we have a new set of horns on our unemployment dilemma. What a vicious feedback cycle!

[Demeter]

21. Oooh! Clever!

You have a career in political wordsmithing there.

[ozymandius]

5. U.S. stock futures fall as Alcoa stokes earnings fears

LONDON (MarketWatch) -- U.S. stock futures slipped on Wednesday, with the previous session's apprehension over earnings looking justified after Alcoa's worse-than-forecast first quarter.

S&P 500 futures fell 7 points to 806.90 and Nasdaq 100 futures fell 6.75 points to 1,274.00. Dow industrial futures fell 77 points.

....

Minutes from the last Federal Reserve interest-rate setting meeting will be released in the afternoon, giving the market more information on the decision to buy $300 billion of government bonds.

Washington also will be eyed for news from the Securities and Exchange Commission, which votes on rules to reinstate some version of the uptick rule that previously forced short-sellers to wait for a stock to rise before initiating a trade.

http://www.marketwatch.com/news/story/us-stock-futures-fall-alcoa/story.aspx?guid={D7519F9B-2871-420F-B6AB-7917FAF548FB}&dist=msr_1

[tclambert]

17. Maybe if their CEO leaked a memo . . . ?

[burf]

33. Now in the last half hour

before trading begins, the futures turn positive. Never mind Alcoa earnings, which were "not as bad as they could have been". Whatta joke the market has become.

[ozymandius]

6. Fed Said to Weigh Charging Higher Rates for Longer TALF Loans

April 8 (Bloomberg) -- The Federal Reserve may offer investors longer-term loans at higher interest rates to buy commercial mortgage-backed securities, aiming to protect the central bank’s balance sheet while acceding to an industry plea.

Lobbyists in the commercial mortgage-backed securities industry say the Fed needs to provide loans of at least five years, rather than the current three-year limit, to avert a meltdown in the market. Fed officials, wary of granting the request outright, are considering a compromise in altering terms of its $1 trillion emergency-lending program.

Fed policy makers are wary of loosening limits on the Term Asset-Backed Securities Loan Facility because longer loans would make it more difficult to tighten credit when inflation picks up. At the same time, rejecting the industry’s request may further stymie the TALF after a slow start that’s hindering Chairman Ben S. Bernanke’s efforts to revive the economy.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aoohQpz4xDDM&refer=home

[spotbird]

30. They just can't reject the industry request

The banks wouldn't ask for free money unless they really needed it.

[KoKo]

35. CNBC reporting the TALF program had few takers yesterday and

didn't go well last week. Maybe that's why they are thinking it needs changing.

[Roland99]

36. oops

[ozymandius]

7. ‘I Want You,’ Uncle Sam Says to Unemployed Wall Street Analysts

April 8 (Bloomberg) -- Uncle Sam to Wall Street: I want you.

Underscoring Washington’s appeal as the financial industry shrinks, about 400 finance professionals have signed up for a New York job fair this month featuring nine federal agencies ranging from the Federal Deposit Insurance Corp. to the FBI and the Securities and Exchange Commission. That’s double the tally at similar events last year, organizers say.

.....

The job-seekers are among 23,300 people who lost industry work in New York in the year through February as banks worldwide announced almost $870 billion in losses and writedowns. The credit crisis that claimed Lehman Brothers Holdings Inc., Merrill Lynch & Co. and Bear Stearns Cos. may cost another 23,000 jobs over the next year, New York City estimates.

.....

The SEC, criticized in recent months for having too many lawyers and not enough analysts as it failed to unearth Bernard Madoff’s Ponzi scheme, is in the market, according to Chairman Mary Schapiro.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aCTNQjrpq2RI&refer=exclusive

[Roland99]

8. Maybe I should show up. Heck knows we all realized what was going on before they did.

We're bloody geniuses compared to these buffoons.

[ozymandius]

10. And you should.

I wish you good luck this week, Roland. After reviewing yesterday's thread, I am very happy that you have a face-to-face interview scheduled.

Also referencing yesterday's thread: it would be some comfort to know a person working for the SEC whom I would not chortle over being made into dog food.

[Roland99]

38. Youch. $1,000 registration fee. *That's* how they make their money

;-)

Sorta like how I always thought those get-rich-quick seminars worked. They sell you a kit on how to make money and I always wondered if all that was in that kit was how to host your *own* get-rich-quick seminars and charge a fee for entrance. A ponzi scheme, in essence.

[Hugin]

44. I must've missed the culinary discussion yesterday.

Is it too late for this?




Also applies to several too-large-to-fail conporations. :cough:AIG:coff:

Fava beans and a fine Chianti... That's all I have to say.

[Dr.Phool]

45. All cooked to order at Sam and Ella's Upscale Beanery.

Free Humble Pie for dessert of Thursday's.

[ozymandius]

46. Kibbles-n-Bits o' Bankers; Hedge Fund Gravy Train; Bilked-Jac (found in your angry grocer's freezer)

Just a few ideas from the referenced discussion...

The illustration you've supplied here is a fine example of the possibilities.

[Hugin]

50. I considered posting this one, but, found it oddly disturbing.

It rubs the Worcestershire Sauce on it's Skin.

Check out the Graduate Bovine in the lower left hand corner to see what I mean.

[ozymandius]

51. That is so wrong.

Bovine cannibal pimp

[AnneD]

71. Cognitive dissonance

if I ever saw it.

I love to eat meat-but I grew up on a farm. I have no illusions. I have processed our own meat before. Gives you a whole new respect for the farm animals. You eat less meat too.

[boomerbust]

12. Afghanistan

Is in need of some good men and women.

[ozymandius]

9. SEC to consider restricting short sellers

WASHINGTON (Reuters) - U.S. securities regulators meet on Wednesday to consider restrictions on short selling, a type of investing blamed by some lawmakers and executives for exacerbating the financial crisis and driving down share prices.

The Securities and Exchange Commission will consider reinstating the "uptick rule," which allowed short sales -- a bet that a stock's price will fall -- only when the last sale price was higher than the previous price.

The rule, first adopted after the 1929 stock market crash, is viewed by some as a way to relieve downward pressure on a stock that is dropping precipitously.

http://uk.reuters.com/article/gc06/idUKTRE53718S20090408

[Festivito]

11. Debt: 04/06/2009 11,149,346,771,082.81 (UP 2,779,938,785.48) (Tiny up.)

(The public debt is up 7% of a billion, i.e. a tiny amount.)

= Held by the Public + Intragovernmental(FICA)
= 6,868,606,323,636.60 + 4,280,740,447,446.21
UP 73,808,356.95 + UP 2,706,130,428.53

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 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 306,115,972 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,421.97.
A family of three owes $109,265.91. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 8,989,475,555.63.
The average for the last 30 days would be 6,592,282,074.13.
The average for the last 31 days would be 6,379,627,813.67.
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$/day.
There were 53 reports in 76 days of Obama's part of FY2009 averaging 0.76B$ per report, 0.60B$/day so far.
There were 128 reports in 188 days of FY2009 averaging 8.79B$ per report, 5.98B$/day.

PROJECTION:
There are 1,385 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 20.0T$.
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)
04/06/2009 11,149,346,771,082.81 BHO (UP 522,469,722,169.73 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: 1,124,621,874,170.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*******
03/26/2009 +007,175,786,187.90 ------------*********
03/27/2009 -000,468,145,936.78 ---
03/30/2009 +000,069,902,880.68 ------------******* Mon
03/31/2009 +079,841,314,678.25 ------------**********
04/01/2009 -001,742,860,350.87 --
04/02/2009 +007,764,243,786.78 ------------*********
04/03/2009 +028,967,677,130.84 ------------**********
04/06/2009 +000,073,808,356.95 ------------******* Mon

126,633,758,044.33 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,484,714,967,823.74 in last 200 days.
That's 1,485B$ in 200 days.
More than any year ever, including last year, and it's 146% of that highest year ever only in 200 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 200 DAYS NOT 365.

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

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3819476&mesg_id=3819498

[Festivito]

61. Debt: 04/07/2009 11,152,772,833,835.89 (UP 3,426,062,753.08) (Tiny again.)

(The public debt is up 12% of a single billion, i.e. a tiny amount.)

= Held by the Public + Intragovernmental(FICA)
= 6,868,729,876,036.67 + 4,284,042,957,799.22
UP 123,552,400.07 + UP 3,302,510,353.01

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 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 306,122,143 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,432.43.
A family of three owes $109,297.28. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 32 days.
The average for the last 23 reports is 8,747,588,042.47.
The average for the last 30 days would be 6,706,484,165.89.
The average for the last 32 days would be 6,287,328,905.53.
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$/day.
There were 54 reports in 77 days of Obama's part of FY2009 averaging 0.71B$ per report, 0.59B$/day so far.
There were 129 reports in 189 days of FY2009 averaging 8.74B$ per report, 5.97B$/day.

PROJECTION:
There are 1,384 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 19.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
04/07/2009 11,152,772,833,835.89 BHO (UP 525,895,784,922.81 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: 1,128,047,936,923.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*******
03/26/2009 +007,175,786,187.90 ------------*********
03/27/2009 -000,468,145,936.78 ---
03/30/2009 +000,069,902,880.68 ------------******* Mon
03/31/2009 +079,841,314,678.25 ------------**********
04/01/2009 -001,742,860,350.87 --
04/02/2009 +007,764,243,786.78 ------------*********
04/03/2009 +028,967,677,130.84 ------------**********
04/06/2009 +000,073,808,356.95 ------------******* Mon
04/07/2009 +000,123,552,400.07 ------------********

126,725,846,778.73 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,488,141,030,576.82 in last 201 days.
That's 1,488B$ in 201 days.
More than any year ever, including last year, and it's 146% of that highest year ever only in 201 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 201 DAYS NOT 365.

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

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3821239&mesg_id=3821268

[ozymandius]

13. Market bear Roubini sticks to dour forecasts

TORONTO (Reuters) - There's still bad news ahead for the U.S. economy and the bear market for stocks is not over yet, according to a prominent economist who foretold much of the current turmoil.

Nouriel Roubini, a professor at New York University's Stern School of Business and chairman of economic research firm RGE Monitor, said on Tuesday that he expected more dour macroeconomic data and problems in the banking and housing sectors, as well as pressures on consumers.

.....

Markets logged four straight weeks of gains until this week on optimism that unprecedented interest rate cuts and billions of dollars of stimulus will eventually fight off the worst global downturn since World War Two, and on upbeat comments from U.S. banks on their performance so far in 2009.

.....

But Roubini played down the rally.

"I am more a realist than a pessimist. I'll be the first one to call for the bottom of this economic contraction, recovery of the market when I see a sustained economic and therefore financial recovery," he said.

http://www.reuters.com/article/ousiv/idUSTRE53706T20090408

[tclambert]

19. But pessimists always call themselves realists, so how can you tell?

Optimists call themselves optimists because they're optimistic optimism is a good thing. Pessimists always fear their fears are just realistic and reality could turn out even worse than they feared. Obviously, Roubini is wrong when he says, "I'll be the first one to call for the bottom of this economic contraction" because others already called it, some comically far back. Some have called it many times, hoping we'll forget when they were wrong and counting it as "getting it right" the one time they get lucky. Another good plan is to just lie about it after the fact when it is clear the bottom is long past and claim you successfully predicted it. It would be hard to prove you never, ever made such a prediction.

[ozymandius]

14. Debt Bomb Is Ticking Loudly on Campuses

The end of the fiscal year usually isn't a momentous occasion for colleges. But this June 30 could be a day of reckoning many never expected.

Colleges borrowed tens of billions of dollars over the past decade to improve facilities, in some cases stretching themselves to the limit and beyond. Now the financial crisis threatens to turn that debt into a ticking bomb.

The complex problem arises from a simple scenario: The debt load for many colleges has gone up, but the value of their assets has plunged. On top of that, some of the debt that they structured to protect themselves from rising interest rates has now become a financial liability.

....

Down the line, some institutions might even find themselves in violation of the standards that the U.S. Department of Education uses to determine eligibility for federal student aid. As of the 2007 fiscal year, 10 percent of all nonprofit colleges were already on shaky enough financial ground that they were subject to special monitoring by the department, which for some included a requirement that they post letters of credit equal to one-tenth of the federal aid they use.

The demands of meeting those covenant conditions could force layoffs or other cutbacks, and in extreme cases, shut some colleges down.

http://chronicle.com/temp/email2.php?id=BKnqWHnV66T6cddcF8rPpCrWjwytF4bw

[ozymandius]

16. Buiter: The green shoots are weeds growing through the rubble in the ruins of the global economy

Buiter explores how over-leveraged our central financial planners have become.

This financial crisis will end. ... But neither the financial crisis nor the contraction of the global real economy are over yet. As regards the financial sector, we are not too far - probably less than a year - from the beginning of the end...... By the end of the year - early 2010 at the latest - we will know which banks will survive and which ones are headed for the scrap heap. With the resolution of the current pervasive uncertainty about the true state of the banks’ balance sheets and about their off-balance-sheet exposures, normal financial intermediation will be able to resume later in 2010.

Governments everywhere are doing the best they can to delay or prevent the lifting of the veil of uncertainty and disinformation that most banks have cast over their battered balance sheets. The banking establishment and the financial establishment representing the beneficial owners of the institutions exposed to the banks as unsecured creditors - pension funds, insurance companies, other banks, foreign investors including sovereign wealth funds - have captured the key governments, their central banks, their regulators, supervisors and accounting standard setters to a degree never seen before.

.....

In a number of systemically important countries, notably the US and the UK, there is a material risk of a ’sudden stop’ - an emerging-market style interruption of capital inflows to both the public and private sectors - prompted by financial market concerns about the sustainability of the fiscal-financial-monetary programmes proposed and implemented by the fiscal and monetary authorities in these countries. For both countries there is a material risk that the mind-boggling general government deficits (14% of GDP or over for the US and 12 % of GDP or over for the UK for the coming year) will either have to be monetised permanently, implying high inflation as soon as the real economy recovers, the output gap closes and the extraordinary fear-induced liquidity preference of the past year subsides, or lead to sovereign default.

.....

When the Fed lends on a non-recourse basis to the private sector with only a $100 bn Treasury guarantee for a possible $1 trillion dollar Fed exposure (as with the TALF), when the Fed purchases private securities outright with just a similar 10-cents-on-the-dollar Treasury guarantee or when the Fed is party to an arrangement that transfers tens of billions of dollars to AIG counterparties - money that is likely to be extracted ultimately from the beneficiaries of other public spending programmes or from the tax payer, either through explicit taxes or through the inflation tax - the Fed is acting like an off-balance sheet and off-budget special purpose vehicle of the US Treasury.

much more....

[dixiegrrrrl]

39. Important sentence in the above...

All if it is important, but this one is so key...
"The banking establishment and the financial establishment representing the beneficial owners of the institutions exposed to the banks as unsecured creditors - pension funds, insurance companies, other banks, foreign investors including sovereign wealth funds -

****** have captured the key governments, their central banks, their regulators, supervisors and accounting standard setters to a degree never seen before."*****

And we wonder why Congress does not do anything.....even after seeing the list of campaign contributors.

Sigh.


edit: I am compelled to add this sentence also to the above:

"When the Chairman of the Fed stands shoulder-to-shoulder or sits side-by-side with the US Treasury Secretary to urge the passing of various budgetary proposals - involving matters both beyond the Fed’s mandate and remit and beyond its competence -
the Fed is politicised irretrievably."

[Joe Chi Minh]

22. Parts of this article in the Guardian sounded suspect to me*, but the general thrust

sounds very positive and astute.

(snip)
"They would print money but give it not to banks but to consumers, to maintain high-street demand - since without demand there is no one to whom the banks can lend even if they were so minded. Optimists would boost money supply intravenously, notably by giving to those with a low propensity to save. That might mean temporarily doubling pensions and social benefits, handing out time-limited spending vouchers, and making short-term cuts in VAT, excise and stamp duty."
(snip)

http://www.guardian.co.uk/commentisfree/2009/apr/08/simon-jenkins-g20-gordon-brown-obama-failure

*The idea of reverting to rampant consumerism sounds retrograde (rather than a return to a Socialist mixed economy and a re-nationalisation of the country's major infrastructure, transport, utilities, etc).

[UpInArms]

24. dollar watch

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

Last trade 85.314 Change +0.073 (+0.09%)

Euro, Pound Trade Heavy As Weak Fundamentals And Corporate Earnings Fuel Risk Aversion

http://www.dailyfx.com/story/bio1/Euro__Pound_Trade_Heavy_As_1239186186063.html

The Euro would fall to as low as 1.3147 after a dismal earnings report from aluminum producer Alcoa, which cited declining global demand and freefalling commodity prices as the cause for their $0.59 loss. The fundamental data for the region helped fuel pessimism as German exports fell for a fifth month by 0.7%. However, demand from abroad was stronger than expectations for a 3.3% drop. However, the weaker than expected 4.2% decline in imports underlines the weakening domestic demand and led to the trade balance widening to 8.7 billion from 7.0 billion. Additionally, German factory orders in February fell for a sixth month by 3.5% which dragged the year-over-year total to a fresh record low of 3.82%. A 5.7% decline in domestic demand followed by a 3.7% drop in orders from the Euro-zone, shows that the region continues to fall deeper into a recession. The EUR/USD had climbed back to 1.3229 before the weak fundamental data stalled bullish momentum.

The pound fell to an intraday low as 1.4634 on the back of the NIESR GDP report showing the economy contracted by 1.5% in the first quarter. The current contraction has started to resemble the 1979 recession and although the U.K. economy has started to show signs of life, a deteriorating labor market will limit optimism and lower expectations for domestic growth. Indeed, consumer confidence remained at a record low of 41 despite economists predicting an improvement to 45 which demonstrates the impact of mounting job losses. Despite the deepening recession, the BoE is expected to keep their benchmark rate at 0.50% tomorrow as there is little room for them to maneuver. However, if the central bank hints at further quantitative easing measures then we could see continued sterling weakness. The 100-Day SMA at 1.4559 has provided support for the pair and will become a key level to watch.

The USD/JPY after finding brief support during Asian trading has come under pressure again as risk aversion flows have become a negative influence on the pair. The USD/JOPY would fall to as low as 99.45 before finding support as the uncertainty if the upcoming earnings season has limited risk appetite. The 200-Day SMA at 99.10 is a significant support level and a break below could lead to an extended move lower. However, if the technical level holds its ground and earnings are better than expected then we could see the 10/14 high of 103.08 tested.

The dollar continues to find support as global risk aversion on concerns that more companies will follow Alcoa and report dismal earnings for the first quarter. Today’s economic docket doesn’t present any significant event risk as second tier indicators MBA mortgage applications and wholesale inventories are due for release. An increase in lending could help reverse sentiment as it would continue the theme of improving data from the housing sector, which may signal that a bottom s forming. Many investors see the recovery of the housing sector as a key for the U.S. economy ending its current downturn. Markets may pay the most attention to today’s release of the FOMC’s minutes to get a gauge on the state of the economy and insight into the future course of action for the central bank. A gloomy outlook from policy makers would help fuel pessimism and lend dollar support.

...more...

German Factory Orders Disappoints as Exports Falter

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/German_Factory_Orders_Disappoints_as_1239188512450.html

EURUSD – Germany exports fell another 0.7% in February after posting a revised 7.4% decline in previous month, while imports plunged 4.2% during the month amid expectations for a 2.3% drop. As a result, the trade report crossed the wires better than expected as the surplus widened to EUR 8.7B despite projections for a decline to 7.5B. Meanwhile, a separate report showed that German factory orders plunged another 3.5% in February after falling 6.7% in the previous month, while the annualized reading slipped to -38.2% from a revised reading of -36.8% in January, extending their worst decline on record as the downturn in the global economy eroded demand from home and abroad.



...more...

[UpInArms]

25. Vacancies soar at US strip and regional malls-Reis

http://www.reuters.com/article/bondsNews/idUSN0747307520090408

NEW YORK, April 8 (Reuters) - Vacancies surged at U.S. strip malls in the first quarter and set a record at U.S. regional malls, as the deterioration in the retail real estate sector accelerated, according to real estate research firm Reis.

Barring a significant economic change, Reis does not expect vacancies to stabilize until sometime in the middle of 2012 if an overall U.S. economic recovery appears next year.

"I'm extremely sceptical," Reis Research Director Victor Calanog said. "This is the first pullback we've seen in 17 years that really affected retail properties directly."

Vacancies at U.S. strip malls rose to 9.5 percent, up 0.6 percentage point, the largest single quarterly rise since Reis began publishing quarterly figures in 1999, Reis said in a quarterly report released on Wednesday.

"In comparison to what was already a tough 2008, neighborhood and community centers returned more space to the market in the first quarter of 2009 than all of the four quarters of 2008 combined," Calanog said. In just one quarter, 8.7 million of excess square feet of space was left on the market, more than in all of 2008, Reis said.

...more...

[Demeter]

26. Krugman is Wrong, the Chinese are not Fools

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=04&year=2009&base_name=krugman_is_wrong_the_chinese_a



This is one of those rare cases where I have to disagree with Paul Krugman. His column today implies that China is somehow surprised that it is in a situation where it stands to face large losses on its dollar holdings.

This is implausible on its face. Did China not notice when the dollar fell from being worth 1.2 euros in 2002 to just a bit more than 0.6 euros last year? Did it not occur to China that they might place better bets on other currencies than a rapidly declining dollar?

The "China just discovered view" implies that China thought the dollar was a good place to invest its money and is now surprised to find that this is not true. The alternative perspective is that China understood all along that it was going to get whacked on its dollar investments. It chose to invest in dollars to prop up the dollar against the yuan. This made Chinese exports very cheap for people in the United Sates, thereby leading to the boom in U.S. imports from China.

In effect, China was subsidizing the purchase of its exports by inflating the value of the dollar relative to the yuan. Given its extraordinary growth over the last decade, this was clearly an effective development path and it may justify any subsequent loss on its dollar holdings. (Obviously, alternative paths were possible, whether they would have been better for China is an open question.)

Anyhow, the reason why the distinction between the China surprise versus strategy view is important is that the bad guys are already using the China threat as an argument to cut Social Security and Medicare. The argument goes that if we don't get our budget in order (i.e. cut Social Security and Medicare) then the Chinese will pull the plug on us. The Peter Peterson crew have already been vigorously pushing this line.

As I have argued elsewhere, we have nothing to fear if China stops investing in the U.S., but it is also important to point out that they are not suddenly surprised (shocked, shocked) by the fact that they are going to take a hit on their dollar investments. This was the deal that they consciously entered, eyes wide open.

--Dean Baker

BET YOU A NICKEL THAT THE CHINESE DO EXCELLENT BULLYING AND BLACKMAIL, THOUGH.

[Demeter]

27. NPR on Financial Regulation: It's Complicated

http://www.prospect.org/csnc/blogs/beat_the_press_archive?month=04&year=2009&base_name=npr_on_financial_regulation_it


I no longer have to joke about how the media is trying to discourage the public from concerning itself with financial regulation by telling them it's too complicated for them. NPR just did this explicitly.

There are some very basic points here that everyone should understand. The details of any form of regulation will be "complicated." For example, the actual fire safety rules for schools are undoubtedly very complicated. How many of us could write up the appropriate safeguards to ensure that our children will be protected from fire risks as they study?
Similarly, the safety rules that are necessary to ensure that our food is not contaminated would also require background that very few of us have.

Nonetheless, there are very few people who would therefore question the need for school fire safety regulation or food safety regulation. NPR is doing cover-up for the financial industry and inept and/or corrupt policymakers and regulators when it tells us that the issues are complicated.

The basic issues were extremely simple. There was a massive asset bubble that created $8 trillion in illusory housing wealth. The collapse of this bubble was going to lead to an economic disaster. This was simple, really simple, and any competent economic analyst could see it coming.

This bubble was being supported by a flood of really poorly written loans that would go bad at huge rates when the bubble burst, leading to massive losses. This was simple, really simple, and any competent economic analyst could see it coming.

How do we prevent such a disaster again? We tell the Federal Reserve Board that part of its job is to combat asset bubbles. We tell them that Alan Greenspan was wrong in thinking that asset bubbles are really cute. It would probably be good to fire some of the people at the Fed who didn't warn of an $8 trillion housing bubble, just so that they know we are serious.

There are other regulations we need also, but NPR doesn't have to bring the public in on the details of the regulation of credit default swaps and collaterized debt obligations just like it doesn't have to bring us in on the complicated details of school fire safety regulation and food safety regulation.

The basic story is that we do know how to prevent asset bubbles and we do know how to prevent a flood of deceptive loans that are virtually certain to default. It is also true that the regulations absolutely will not be perfect and in that sense it will slow growth. So what? The placement of traffic signals is not perfect and therefore slows growth.

We never do anything perfectly, that includes financial regulation. Does NPR have any evidence that the risks to growth of bad regulation are larger than the risks of misplaced traffic signals? If so, that would be an interesting piece for listeners.

But, that is not what NPR gave us. NPR implied that a housing bubble was allowed to grow to enormously dangerous levels because everything was so complicated as opposed to the possibility that those in charge were either corrupt and/or incompetent.

This is truly dreadful reporting, it's simple.

--Dean Baker

[UpInArms]

29. Deere to layoff 160 workers at its Des Moines Works facility

http://www.marketwatch.com/news/story/Deere-layoff-160-workers-its/story.aspx?guid=%7B2348ED0C%2D5057%2D4E09%2D8924%2D260DBB55AC3D%7D&dist=hplatest

NEW YORK (MarketWatch) -- Deere & Co. (DE: 34.98, -1.98, -5.4%) said Wednesday it would indefinitely lay off 160 workers at its Des Moines Works facility due to reduced demand for its tillage, planting and cotton-harvesting equipment. The layoffs are effective April 27, the Moline, Ill., agricultural-equipment manufacturer said in a release.

[burf]

34. Wasn't Deere one of those

stocks that Cramer told us that was going to be going gangbusters when the commodity prices were ballooning?

[AnneD]

54. I think I wrote 2 weeks ago about going to see Bradah.....

and commented about all the shiny new farm equipment sitting on the lot and here it was planting time:think:

Gee that was a hard one to call.

[DemReadingDU]

31. Charles Hugh Smith: A Meandering Update

A Meandering Update (April 8, 2009)
Charles Hugh Smith

Now that I am back at my desk, I can report that I spent the past few weeks in rural Hawaii without wifi networks or even a dialup Internet connection. No, it's not my "bugout" hideaway, though it could certainly fill that role nicely--not because it's so remote or defensible but because it's a sparsely populated island with tremendous undeveloped agricultural potential, and my wife's family is close by. That offers us a network of reciprocal support in tough times--the ultimate "security" in my opinion.

Since I have roughly split my adult life between California and Hawaii, and since I have lived on three of the seven inhabited Hawaiian Islands and went to high school and university there, I can claim some passing knowledge of the Island State.

Thus I don't consider it hyperbole to suggest that Hawaii offers an apt metaphor for the U.S., and indeed the entire industrialized global economy. Honolulu is the most isolated metropolis in the world, lying some 2,500 miles from any source of petroleum, industrial goods, non-native foods, etc.

What strikes this observer is the immense distance between the residents' unconscious confidence in the supply chain which fuels and feeds the islands' 1.2 million people and the actual extreme fragility of that supply chain. Having thought obsessively about the issues raised in Survival+ for months, I am sobered by the reality that a mere week without the steady arrival of oil tankers and ships loaded with foodstuffs would render Oahu/Honolulu vulerable to shortages and perhaps outright rationing--and if the supply chain disruption lasted longer than a week or two, hunger and civil disorder would become distinct possibilities.

How different is the nation? Perhaps not as much as most believe. The vaunted Strategic Oil Reserve holds some 600 million barrels of oil--a princely sounding quantity until you divide it by the 20 million barrels the U.S. consumes every day. Thus the U.S. holds a mere month of oil in reserve. Yes, there are millions of barrels in other commercial storage facilities, but even 1.2 billion barrels is only two months' supply.

Even more crazy-making is the fact that the islands have grown increasingly dependent on the Mainland for such basic food items as milk and eggs. Where a mere decade ago, the islands boasted numerous dairies and egg farms, the last dairy closed last year. A major egg farm on the Island of Hawaii recently closed after almost 20 years in business, a victim of rising costs and state/county neglect/disinterest.

Instead of raising official alarms, the demise of fundamental agricultural production has elicited either yawns--Mainland milk is cheaper--or the sort of handwringing which passes for official "concern."

Knowledgeable private citizens such as Richard Ha (please see his website in the upper right sidebar) are deeply concerned, and are trying to raise awareness about the need for what they term "food security"--that is, food which is grown in the islands for local consumption.

But the state and county governments have offered only lip-service encouragement--the kind which costs nothing and accomplishes even less.

Again--how different is the rest of the nation? How dependent are we on food and fuel trucked over great distances from elsewhere? The dependence of the U.S. as a whole on liquid petroleum fuel is essentially 100%.

The state of Hawaii, like many other local governments, touts a goal of generating 50% of the state's energy from alternative sources by 2030, but the actual costs and planning are left harmlessly vague. Maybe private investors will step up and make it happen, blah blah blah. California announced a "million solar roofs" goal a few years ago, but how many units have been installed? What resources have been devoted to making this ambitious goal a reality?

Plans to lay undersea electrical transmission cables from Lanai to Oahu are being bandied about, with a price tag drifting from $600 million to $2 billion--obviously just wild guesses. Meanwhile, a significant number of the 100,000+ roofs on Oahu could be covered with solar panels for the same amount of money being discussed for a cable which would waste up to a third of the energy transmitted and generate not a single kilowatt.

This pie-in-the-sky, "a new technology will save us from actually having to adapt to a new reality" is compelling not just in Hawaii but everywhere. As I have endlessly noted here, all the pie-in-the-sky technologies other than photovoltaic and other solar technolgies are far from scaling up to replace oil. At least distributed solar has the advantage of tapping into the existing electrical grid, but without some new storage technology it must be backed up at night by fossil fuels or nuclear power. Perhaps wind and tidal sources can contribute significant percentages of 24/7 power, but scaling these up poses enormous challenges.

In other words, a smug faith that some new technology will magically blossom in time to avoid a decline in petroleum is not a substitute for the hard tradeoffs and sacrifices which must be made now to be ready for that decline, which could occur within a decade or even sooner.

Like the nation as a whole, Hawaii's economy has been dependent on real estate development/speculation and cheap oil for the past 50 years. A "plan B" to these fast-disappearing sources of growth is nowhere in sight. The entire point of the Survival+ exercise was to examine the models of finance, economic growth and governance which served up 20 years of real prosperity (1946-1966), 15 years of post-industrial malaise (1967-1981) and 25 years of essentially bogus debt-based prosperity (1982-2007).

If these models are failing, what's our Plan B? The TV "news" (that is, an entertainment "if it bleeds, it leads" simulacrum of news) was busy touting the opening of Victoria's Secret in a Honolulu mall as the savior of the faltering Hawaiian economy (tourism down 12% or more from a year ago) and boasting that real estate prices have only fallen 5% in the past year--never mind the pages of foreclosures filling the back pages of the local papers--as if tourism and speculative real estate development will be coming back shortly.

How different is California, Florida, et al.? Not much. Like superstitious cargo-cult believers in remote South Seas islands who hoped to spark a return of the World War II plenty with appeals to stone radios and other talismans, the U.S. citizenry hoping for the return of debt-based, cheap-oil "good times" are doomed to the bitter realization that superstitition is no substitute for an appreciation of the extreme fragility of the supply chain--both physical and financial--which feeds our consumerist economy.

In an attempt not to drive off yet more readers, I will give Survival+ a break and return to the site's usual scattershot, semi-random coverage of various diverse topics.
http://www.oftwominds.com/blogapr09/update04-09.html

link backwards to Survival+, chapters 1 - 9...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3819476&mesg_id=3819595

[dixiegrrrrl]

42. This is a very important read. Thank you so much for sharing it.

[Demeter]

67. and THAT'S Why I'm Staying In Michigan

most self-sufficient potential of any state.

[antigop]

40. Firm acted as tutor in selling towns risky deals (municipal bond derivatives)

http://www.nytimes.com/2009/04/08/us/08bond.html?hp

Lewisburg is one of hundreds of small cities and counties across America reeling from their reliance in recent years on risky municipal bond derivatives that went bad. Municipalities that bought the derivatives were like homeowners with fixed-rate mortgages who refinanced by taking out lower-interest, variable-rate mortgages. But some local officials say they were not told, or did not understand, that interest rates could go much higher if economic conditions worsened — which, of course, they did.

The municipal bond marketplace was so lightly regulated that in Tennessee Morgan Keegan was able to dominate almost every phase of the business. The firm, which is based in Memphis, sold $2 billion worth of municipal bond derivatives to 38 cities and counties since 2001, according to data compiled by the state comptroller’s office.

After The New York Times made inquiries, the Tennessee comptroller, Justin P. Wilson, ordered a statewide freeze on bond derivatives and a review of the seminar taught by Morgan Keegan and others.

Representatives of Morgan Keegan pointed out that they saved cities and counties money for years by delivering lower interest rates, and that the economic decline that created the turmoil in the bond market was beyond their control. Moody’s credit rating agency on Tuesday issued a negative outlook for the fiscal health of municipal governments.

In Washington, federal regulators are now considering ways to restrict the use of municipal bond derivatives. Regulators and some in the industry are challenging whether it is appropriate for large investment banks to engage small cities and counties in transactions that lower interest rates but carry higher risks.

[antigop]

41. Safe-Harbor 401(k) Plans Force U.S. Companies to Pay to Play

http://www.bloomberg.com/apps/news?pid=20601087&sid=a3IZlR2wXLjw&refer=home

Marty McGreevy, owner of a company that designs convention booths, wanted to avoid cutting jobs by stopping payments to his employees’ 401(k) savings plan.

U.S. regulations for smaller companies such as McGreevy’s Cyclonix in Morgan Hill, California, prevented him from doing so. His choices were to make the $70,000 matching payment in 2009 or liquidate the 401(k) retirement plan. Since Cyclonix had already committed to the 2009 outlay, it was too late, he said.
...

In the kind of safe-harbor 401(k) plan used most often by small firms, employers make payments equal to 3 percent of eligible employees’ compensation. The contributions are paid regardless of whether employees add their own money to the plan.

Safe-harbor plans permit businesses to avoid a requirement with regular 401(k)s: having to demonstrate that a firm’s most highly paid employees, such as the owners of a small business, aren’t reaping the lion’s share of the retirement benefits.

Just terminate the damn things---let people have their money. If they want to roll it over into an IRA, then they can do that.

<edit to add> And let's just admit that 401(k)'s are a failure.

[antigop]

43. U.S. to offer aid to life insurers (expand TARP to life insurers)

http://online.wsj.com/article/SB123914741752198971.html

The Treasury Department has decided to extend bailout funds to a number of struggling life-insurance companies, helping an industry that is a linchpin of the U.S. financial system, people familiar with the matter said.

The department is expected to announce the expansion of the Troubled Asset Relief Program to aid the ailing industry within the next several days, these people said.

The news will come as a relief to a number of iconic American companies that have suffered big losses made worse by generous promises to buyers of some investment products. Shares of life insurers have fallen more than 40% this year. Their troubles led to a string of rating-agency downgrades that, in a vicious cycle, made it more difficult for some insurers to raise funds.

The life-insurance industry is an important piece of the U.S. financial system. Millions of Americans have entrusted their families' financial safety to these companies, so keeping them on solid footing is crucial to maintaining confidence. If massive numbers of customers sought to redeem their policies, it could cause a cash crunch for some companies. And because insurers invest the premiums they receive from customers into bonds, real estate and other investments, they are major holders of securities. If they needed to sell off holdings to raise cash, it could cause markets to tumble

[antigop]

48. Existential question: What the F$@&* Are We Doing?

http://openleft.com/diary/12696/existential-question-what-the-fuck-are-we-doing

Thanks to the economic meltdown, ensuing AIG bonuses, and promotion of economic criminals to top White House jobs, it has never been more clear that the American economy and political system is one that rewards everything we say we don't want to reward. The media world I work in rewards David Brooks, the economy rewards AIG executives, the political system rewards Larry Summers. It's all the same fucking thing - everything we say we want to punish, but instead systemically cheer on.

So again, what the fuck are we doing? Why do we just sit here and take it? And if we're not going to take it, what the hell should we do? Most of us who have a job are totally overworked - we barely have time for our families. Those of us who are out of work are scratching and clawing to survive - they barely have time for anything else. So what should we do?

I don't have an answer to these existential questions...at least not yet. And I certainly don't know what to do in reaction to asking them. One voice in the chorus that is my inner monologue says "you're right, what am I doing? Fuck this, I'm moving to Costa Rica."* Another voice says "I'm not getting out - I'm doing the right thing by keeping the faith that this is important work." And yet another voice says, "Just don't ask those questions - they will only give you heartbreak."

All of the rationales have merit - not just for me, but for society. And I'm sure millions of people are having the same "on the one hand, on the other hand" debates in their minds. Some days we defiantly push on, other days we want to drop out and move to some far away nirvana.

[AnneD]

55. If you haven't had the chance....

I recommend a summer read of Vonnegut's Breakfast of Champions. That answered most of my existential questions and helped me understand my place in the scheme of things. I feel so much better knowing the true origin of the species.

[DemReadingDU]

52. Bernanke's Deflation Preventing Scorecard

4/8/09
In case no one is keeping track, Bernanke has now fired every bullet from his 2002 “helicopter drop” speech Deflation: Making Sure "It" Doesn't Happen Here.

Bernanke's Scorecard

Here is Bernanke’s roadmap, and a “point-by-point” list from that speech.

1. Reduce nominal interest rate to zero. Check. That didn’t work...
2. Increase the number of dollars in circulation, or credibly threaten to do so. Check. That didn’t work...
3. Expand the scale of asset purchases or, possibly, expand the menu of assets it buys. Check & check. That didn’t work...
4. Make low-interest-rate loans to banks. Check. That didn’t work...
5. Cooperate with fiscal authorities to inject more money. Check. That didn’t work...
6. Lower rates further out along the Treasury term structure. Check. That didn’t work...
7. Commit to holding the overnight rate at zero for some specified period. Check. That didn’t work...
8. Begin announcing explicit ceilings for yields on longer-maturity Treasury debt (bonds maturing within the next two years); enforce interest-rate ceilings by committing to make unlimited purchases of securities at prices consistent with the targeted yields. Check, and check. That didn’t work...
9. If that proves insufficient, cap yields of Treasury securities at still longer maturities, say three to six years. Check (they’re buying out to 7 years right now.) That didn’t work...
10. Use its existing authority to operate in the markets for agency debt. Check (in fact, they “own” the agency debt market!) That didn’t work...
11. Influence yields on privately issued securities. (Note: the Fed used to be restricted in doing that, but not anymore.) Check. That didn’t work...
12. Offer fixed-term loans to banks at low or zero interest, with a wide range of private assets deemed eligible as collateral (…Well, I’m still waiting for them to accept bellybutton lint & Beanie Babies, but I’m sure my patience will be rewarded. Besides their “mark-to-maturity” offers will be more than enticing!) Anyway… Check. That didn’t work...
13. Buy foreign government debt (and although Ben didn’t specifically mention it, let’s not forget those dollar swaps with foreign nations.) Check. That didn’t work...

Bernanke has failed. "It" has happened. The proof is irrefutable as detailed in Humpty Dumpty On Inflation and Fiat World Mathematical Model.

What now Ben? More of the same stuff that failed miserably before, only on a grander scale?

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com/2009/04/bernankes-deflation-preventing.html


edit to add...

Remarks by Governor Ben S. Bernanke
Before the National Economists Club, Washington, D.C.
November 21, 2002

Deflation: Making Sure "It" Doesn't Happen Here
http://www.federalreserve.gov/boardDocs/speeches/2002/20021121/default.htm

[DemReadingDU]

53. Mike Whitney - Bernanke's Financial Rescue Plan: The glide-path to destitution

Bernanke's Financial Rescue Plan: The glide-path to destitution
By Mike Whitney

April 07, 2009 "Information Clearing House" -- -Fed chief Ben Bernanke has embarked on the most radical and ruinous financial rescue plan in history. According to Bloomberg News, the Fed has already lent or committed $12.8 trillion trying to stabilize the financial system after the the bursting of Wall Street's speculative mega-bubble. Now Bernanke wants to dig an even bigger hole, by creating programs that will provide up to $2 trillion of credit to financial institutions that purchase toxic assets from banks or securities backed by consumer loans. The Fed's generous terms are expected to generate a flurry of speculation which will help strengthen the banking system while leaving the taxpayer to bear the losses. It is impossible to know what the long-term effects of Bernanke's excessive spending will be, but his plan has the potential to trigger hyperinflation or spark a run on the dollar.

Bernanke's zero-percent interest rates, multi-trillion dollar lending facilities and bank bailouts do not fit within the Fed's narrow mandate of "price stability and full employment". With unemployment soaring to 8.5 percent and increasing at a rate of 650,000 per month (with 15 percent under-employed) it is a wonder that Bernanke hasn't been fired already. There are also myriad problems with Bernanke's lending facilities which are nothing more than a crafty way of transferring wealth from the Fed to private industry via low interest loans. The Central Bank is not supposed to "pick winners" as it is blatantly doing through its market-distorting facilities. Businesses outside the financial sector cannot exchange their downgraded garbage with the Fed for semi-permanent, rotating loans; so why should underwater investment banks and hedge funds get special treatment? The facilities represent a gift to financial institutions giving them an unfair advantage in the marketplace.

Besides the $2 trillion for the Term Asset-Backed Lending Facility (TALF) and the Public-Private Investment Program (PPIP), the Fed will also provide a multi-billion dollar backstop for the FDIC as bank closures continue to snowball and more reserves are needed to shore up the system. That means that the Fed's balance sheet could mushroom to over $4 trillion by the end of 2010. The Treasury has already agreed in principle to assume full responsibility for the Fed's lending facilities (as well as the bailouts of AIG and Bear Stearns) as soon as the financial system stabilizes. By providing loans and US Treasurys to failing companies, instead of capital, Bernanke has sidestepped Congress, thus, undermining the spirit and the letter of the law. Congress has approved a mere $1.5 trillion of the nearly $13 trillion for which taxpayers are now responsible.

The recent 22 percent uptick in the stock market is a sign that Bernanke's monetary stimulus is beginning to kick in. Oil rose from $33 per barrel to over $50 in little more than a month. Other raw materials have followed oil. The dollar has plunged every time the stock market has gone up. These are all signs of nascent inflation which is likely to accelerate after the current period of deleveraging ends. Food and energy prices will rise sharply and the dollar will come under greater and greater pressure. This is Bernanke's nightmare scenario; a surge in inflation that forces him to raise rates and kill the recovery before it ever begins. The Fed's unwillingness to be proactive in dealing with credit bubbles has created a situation where there are no easy answers or pain-free solutions.

Bernanke's approach to the crisis has been wrongheaded from the get-go. It makes no sense to commit nearly $13 trillion to prop up a grossly oversized financial system while providing less than $900 billion stimulus for the real economy. The whole plan is upside-down. It's consumers, homeowners and workers that create demand (consumer spending is 72 percent of GDP) and yet, they've been left to twist in the wind while the bulk of the resources have been directed to financial speculators who are responsible for the mess. Middle class families have seen their retirements slashed in half and their home equity vanish, while their jobs become increasingly less secure. The Fed and the Treasury should be focused on debt relief, mortgage cram-downs, jobs programs and open-ended support for state and local governments. Rebuilding the financial infrastructure for extending more credit to people that are already underwater is beyond shortsighted; its cruel. The financial system needs to shrink to fit the new reality of a smaller economy. That means that Bernanke should aggressively mark-down the dodgy collateral he's been accepting (the collateral should reflect current market prices) and force many of the weaker institutions into bankruptcy. This is the fairest and fastest way to shake the deadwood from the financial system. Keeping asset prices artificially inflated only puts off the inevitable day of reckoning.

more...
http://informationclearinghouse.info/article22367.htm

[AnneD]

56. When will we all....

get our degrees in economics on this thread???? Just curious.

[Demeter]

68. The Only Degree We're Likely To Get Is the Third One

What with all the Bush spyware and tissue paper legality intact.

[AnneD]

72. HAHAHHAHAHAHAHAHAHAHAHAHAHAHA

I can just see us called in. They want to know who told us about the truth behind the Market. They just wouldn't believe that someone with some common sense and a lot of info would figure their scam out (I mean really-their followers couldn't). We'd better watch out-they'll shut the nets down next.

[DoBotherMe]

58. Bump n/t

[Ghost Dog]

59. Fed sees economy sliding further: FOMC minutes

WASHINGTON (Reuters) - Federal Reserve policy-makers agreed at their March 17-18 meeting that "substantial additional purchases" of a range of longer-term assets was appropriate to deal with a steep drop in economic activity across all sectors, minutes of the meeting showed on Wednesday.

/.. http://www.reuters.com/article/ousiv/idUSTRE5377PR20090408?rpc=401&


Fed Officials Saw Downside Risks Predominating at Last Meeting

April 8 (Bloomberg) -- Federal Reserve officials feared the U.S. economy might fall into a self-reinforcing cycle of rising unemployment and slumping business and consumer spending, making credit tighter in a weak financial system, minutes of the Federal Reserve’s March meeting show.

“Participants expressed concern about downside risks to an outlook for activity that was already weak,” minutes of the March 17-18 meeting released in Washington said. “Credit conditions remained very tight, and financial markets remained fragile and unsettled, with pressures on financial institutions generally intensifying.”

The outlook prompted the Federal Open Market Committee in a unanimous vote to boost its open-market purchases of bonds by $1.15 trillion, continuing its unprecedented increase in money supplied to the economy. The U.S. central bank has used its own balance sheet to provide financing for markets in commercial paper, asset-backed securities and mortgage bonds, markets it deems critical for financial stability and economic recovery.

“Most participants viewed downside risks as predominating in the near term, mainly owing to potential adverse feedback effects as reduced employment and production weighed on consumer spending,” the minutes said. “The decline in foreign economic activity was one of the most notable developments since the January meeting.”

MBS Purchases

The FOMC in March decided to purchase an additional $750 billion in mortgage-backed securities, bringing total purchases this year to $1.25 trillion, and increase purchases of housing agency debt by $100 billion to $200 billion. The committee also decided to purchase $300 billion of longer-term Treasury securities over six months.

Fed credit to the economy stood at $2 trillion April 1, up about $1.2 trillion over the past year. Fed officials have introduced new tools to resolve help liquidity shortages at banks and provide backstop financing.

...

The minutes also noted that Fed officials held a conference call on Feb. 7 to discuss the central bank’s participation in the Treasury Department’s financial stability plan.

TALF

The Fed last month started the Term-Asset Backed Securities Loan Facility to provide financing and investor support for securitized consumer debt. The program could grow to $1 trillion. “The demand for TALF funding appeared likely to be modest initially” due to fears of government intervention, the minutes said. “Other participants anticipated that TALF loans would increase over time.”

...

At the same time, officials are mapping out ways to withdraw monetary stimulus and retreat from credit programs once markets improve.

The Treasury and Fed published a joint agreement March 23 reinforcing the Fed’s independence on keeping inflation stable, and pledging to remove three emergency loan facilities on the Fed’s balance sheet created to support insurer American International Group Inc. and the merger of Bear Stearns Cos. with JPMorgan Chase & Co. a year ago.

/... http://www.bloomberg.com/apps/news?pid=20601087&sid=agiMUIJwiBGk&refer=worldwide

See minutes: http://ftalphaville.ft.com/blog/2009/04/08/54593/fomc-says-financial-markets-still-fragile-and-unsettled-risk-of-deflation-invoked/?source=rss

[Ghost Dog]

60. Stocks trim gains after Fed minutes

NEW YORK (Reuters) – Stocks pared gains on Wednesday as minutes of the Federal Reserve's recent policy meeting showed that officials saw the economy deteriorating and downside risks high.

/.. http://news.yahoo.com/s/nm/20090408/bs_nm/us_markets_stocks1

[Ghost Dog]

62. Danger lurks behind banks' results

NEW YORK (Reuters) – U.S. banks' first-quarter results will show that losses from credit cards and commercial and real estate loans have not yet peaked, and perhaps dash hopes that the worst of the banking crisis has passed.

The January-to-March period is the first full quarter since the industry got hundreds of billions of dollars of taxpayer bailout money and mergers weeded out several troubled lenders.

Results at large banks such as Bank of America Corp (BAC.N), JPMorgan Chase & Co (JPM.N), Citigroup Inc (C.N), Wells Fargo & Co (WFC.N) are expected to improve from the fourth quarter, helped in part by a surge in mortgage refinancings, lower deposit costs and fewer writedowns.

But investors will approach with abundant caution as bank results stream in over the next two weeks. They know the bottom lines will reflect a new accounting rule that may further limit writedowns without actually improving bank balance sheets. And the government is conducting "stress tests" to see which of the 19 biggest lenders may need more capital.

"It's going to be such a muddy picture, which will keep a lot of investors on the sidelines," said Michael Nix, who helps invest $650 million at Greenwood Capital Associates LLC in Greenwood, South Carolina. "There is an expectation that we see a more favorable earnings environment, but that's relative -- it's a question of whether we've caught the falling knife."

The fourth quarter was the sector's first in the red since 1990. Banks now face a deep recession that may not end before 2010, worry over how much new capital they need, and conjecture over how long executives will keep their jobs.

Chief executives of Bank of America, JPMorgan and Citigroup -- Kenneth Lewis, Jamie Dimon and Vikram Pandit, respectively -- said their banks made money in January and February, though Lewis and Dimon said trading results ebbed in March.

Oppenheimer & Co analyst Chris Kotowski wrote that large commercial and investment banks may have "reasonably stable 'core' revenues, expenses and earnings" before loan losses and writedowns, but credit deterioration will likely "continue in full swing.

Regional banks may fare worse than big banks, given their large relative exposure to accelerating losses from consumer loans such as credit cards, commercial and industrial loans, and commercial real estate.

...

And yet bank shares have rallied, gaining roughly 50 percent since March 6, though they have still lost roughly three-quarters of their value over the past two years.

"The rally in bank stocks got way ahead of itself," said Michael Mullaney, who helps invest $9 billion at Fiduciary Trust Co in Boston. "We would expect a pullback as earnings announcements come in, pretty morose for the most part."

/... http://news.yahoo.com/s/nm/20090408/bs_nm/us_banks;_ylt=ApnXwGNao.Qs3zfG5.NPJaG573QA

Ya don't say!

[Robbien]

63. There is a hedge fund of internet porn investments; it is now being accused of being a Ponzi

Is last year’s most provocative hedge fund launch just another fraud?

Sources close to AdultVest Inc., which manages the Priapus Investment Fund, an adult entertainment hedge and private equity fund, say that it is spending investor money on more than just investments, and that what investments there are don’t account for the returns it claims. A former investor says that founder Francis Koenig is looting the fund to pay for fine art, expensive wines, cars, personal trips and alimony. Meanwhile, a former employee tells FINalternatives “there was no capital being generated” during his time at the firm.

“There is almost no money left in the fund,” the investor, who said he was privy to some of AdultVest’s financials via a court order, alleges. “Koenig has an American Express black card through the company that he uses on partying, girls and high living. Most money is missing and iPorn.com is not worth what he says it is.”

“It just seems to me the whole time I was there that there was no capital being generated,” says the former employee, who left the firm last year because he felt uncomfortable working in an office shrouded with mystery. “And it seemed like money was being spent for things that didn’t need to be bought like cars, clothes and trips,” he adds.

http://www.finalternatives.com/node/7519


A porn hedge fund? What will those wacky hedgies think of next.

[RUMMYisFROSTED]

64. k

:patriot:

[Demeter]

70. Now, Does That Look Like a Jet-Fueled Dow, Or what?

Poor Ben Bernanke. He wasted all that time Piling it Higher and Deeper (PhD), to no avail. Now if he had worked at minimum wage, started a small business that died thanks to BushCo, raised children in a working class neighborhood, we might have:

free public education with national standards through the bachelor's degree.
single payer, universal health care
fiddle-free elections
a minuscule financial sector with wage limits conformable to the parasitical nature of the industry.
No NAFTA, CAFTA, WTO, IMF, and the like.

And very strong unions. Viva la France!

[Ghost Dog]

73. Insurers lift Wall Street; Berkshire rating cut

NEW YORK (Reuters) – Stocks snapped a two- day slide on Wednesday on news the government is shoring up life insurers and optimism about consumer spending after Bed Bath & Beyond Inc (BBBY.O) reported a better-than-expected profit.

Life insurers, whose capital base has been eroded by falling markets, have met requirements for government funds, the U.S. Treasury said. The news lifted shares of insurance companies, including Prudential Financial (PRU.N), which was up nearly 8 percent.

But in the latest sign of the economic downturn's impact, Moody's Investors Service stripped Warren Buffett's Berkshire Hathaway (BRKa.N)(BRKb.N) of its top rating of Aaa after the closing bell, citing the recession and the severe decline in stocks.

The Nasdaq surged nearly 2 percent on hopes that a recovery in business spending will boost tech profits and after Bed Bath & Beyond (BBBY.O) jumped 24.3 percent to $31.70 on sales that were not as bad as feared in the last quarter.

"The mood is improving that maybe the economy will come back sometime, and both consumer discretionary and tech are cyclical," said Al Goldman, chief market strategist at Wachovia Securities in St. Louis.

The Dow Jones industrial average (.DJI) added 47.55 points, or 0.61 percent, to 7,837.11. The Standard & Poor's 500 Index (.SPX) gained 9.61 points, or 1.18 percent, to 825.16. The Nasdaq Composite Index (.IXIC) shot up 29.05 points, or 1.86 percent, to 1,590.66.

FEAR BAROMETER FALLS

Meager volume marked the session again, but in a sign that investors are becoming less fearful, the CBOE Volatility Index (.VIX), or VIX, closed at its lowest level since early January. The VIX fell 3.8 percent to end at 38.85.

/... http://news.yahoo.com/s/nm/20090408/bs_nm/us_markets_stocks1

Edit: No comment from me :silly:

[Barack_America]

74. Auto parts shares jump as GM, Chrysler launch aid

http://www.ibtimes.com/articles/20090408/auto-parts-shares-jump-as-gm-chrysler-launch-aid.htm

[DemReadingDU]

75. delete

posted on wrong day