STOCK MARKET WATCH, Friday June 5

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday June 5, 2009

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

AT THE CLOSING BELL ON June 4, 2009

Dow... 8,750.24 +74.96 (+0.86%)
Nasdaq... 1,850.02 +24.10 (+1.32%)
S&P 500... 942.46 +10.70 (+1.15%)
Gold future... 982.30 +16.70 (+1.73%)
10-Yr Bond... 3.70 +0.16 (+4.58%)
30-Year Bond 4.57 +0.13 (+2.86%)

---

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 Observation

Not So Green
BY MICHAEL PANZNER

In a March interview with 60 Minutes, Fed Chairman Ben Bernanke told interviewer Scott Pelley that he saw “green shoots” of recovery in our crumbling economy. Since then, a growing number of observers have also claimed to see signs of life sprouting up in various places, presumably aided by one of the biggest government spending sprees of all time. However, given today’s news of a sharp reversal in the trend of year-on-year same-store retail sales, I’m wondering if we’ll soon discover that all this greenery is suddenly changing color?

....

Based on four measures of risk -- the Volatility Index (VIX), the price of gold relative to silver, 3-month Eurodollar less 3-month Treasury bill rates (TED spread), and Bloomberg’s U.S. Financial Conditions Index, which “combines yield spreads and indices from the money markets, equity markets, and bond markets into a normalized index” -- conditions are supposedly back to where they were before Lehman Brothers failed. Yet even a cursory look around reveals that many markets remain broken or are shadows of their former selves, while the real economy is anything but sound. Maybe the optimists have been smoking a few too many of those green shoots?

....

Not surprisingly, the combination of short-covering and greater-fool buying, along with the trillions of dollars Washington has been handing over to banks and other financial institutions, has been a short-term boon for the share prices of the firms that helped get us to where we are today. That difference can be tracked using a benchmark measure known as the NASDAQ OMX Government Relief Index, which is designed to mirror the performance of US listed firms that are participating in the TARP or other direct government investment programs or government loans, according to Bloomberg.

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

[truedelphi]

88. This OP says:

Not surprisingly, the combination of short-covering and greater-fool buying, along with the trillions of dollars Washington has been handing over to banks and other financial institutions, has been a short-term boon for the share prices of the firms that helped get us to where we are today.

And it is very sad that this is true!

[ozymandius]

2. Today's Reports

08:30 Average Workweek May
Briefing.com 33.2
Consensus 33.2
Prior 33.2

08:30 Hourly Earnings May
Briefing.com 0.2%
Consensus 0.1%
Prior 0.1%

08:30 Nonfarm Payrolls May
Briefing.com -525K
Consensus -520K
Prior -539K

08:30 Unemployment Rate May
Briefing.com 9.2%
Consensus 9.2%
Prior 8.9%

14:00 Consumer Credit Apr
Briefing.com -$6.0B
Consensus -$6.0B
Prior -$11.1B

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

[UpInArms]

37. May NFP @ 345,000 - May alternative unemployment rate 16.4%

U.S. May nonfarm payrolls fall by 345,000
8:30am Today

U.S. May job loss much less than 500,000 expected
8:30am Today

U.S. May unemployment rate jumps to 9.4%
8:30am Today

6 million jobs lost since recession began
8:30am Today

U.S. May hours worked falls 0.7%
8:30am Today

U.S. May goods-producing jobs down 225,000
8:30am Today

U.S. May service-producing jobs down 120,000
8:30am Today

U.S. March, April payrolls revised up by 82,000
8:30am Today

U.S. May unemployment rises to 14.5 million
8:30am Today

U.S. May alternative unemployment rate 16.4%
8:30am Today

[Demeter]

62. Now you know that's got to be a lie.

[UpInArms]

63. well, yeah - I'm waiting for the revisions on the next revisions

that will make all the revisions in the future make sense of all of the revisions of the past

:crazy:

[Ghost Dog]

73. Hmm. "U.S. Economy: Job Losses Slow, Signaling Recession Is Abating"

June 5 (Bloomberg) -- The U.S. lost fewer jobs than forecast in May, reinforcing signs that the deepest recession in half a century is starting to abate.

Payrolls fell by 345,000, the least in eight months, after a revised 504,000 loss in April, the Labor Department said today in Washington. The jobless rate increased to 9.4 percent, the highest since 1983, in part as more people joined the labor force to look for work.

...

The dollar rallied and Treasuries fell as optimism grew that the economy’s slump will soon end. Still, figures showing a drop in hours worked and slowdown in earnings indicate any recovery will be muted. Americans are spending less and saving more as home values fall and companies from American Express Co. to General Motors Corp. continue to cut back workforces.

Revisions added 82,000 to payroll figures previously reported for April and March.

Yields on benchmark 10-year U.S. notes jumped to 3.81 percent at 11:28 a.m. in New York from 3.71 percent late yesterday, and the dollar climbed to a three-week high against the yen, gaining 1.7 percent to 98.22. The Standard & Poor’s 500 Stock Index was up 0.2 percent at 944.47 after rising as high as 951.69 earlier.

...

Payrolls were forecast to drop 520,000 after a 539,000 decrease initially reported for April, according to the median of 76 economists surveyed by Bloomberg News. Estimates ranged from declines of 450,000 to 600,000. Job losses peaked at 741,000 in January, the most since 1949.

The jobless rate was projected to jump to 9.2 percent, with forecasts ranging from 9 percent to 9.4 percent.

/... http://www.bloomberg.com/apps/news?pid=20601068&sid=au1ClBY9Zj1c&refer=economy

Americans "spending less and saving more", if true, would at least be a start. Next steps might involve, for example, "planning" and "investing wisely". :smoke:

[Demeter]

78. Also Prosecution and Throwing the Bums Out

and taxation for the obscenely rich.

[tclambert]

79. A co-worker ranted about how unfair it was to tax business people "who earn their money."

"Millions in bonuses for bankrupting banks and ruining the nation's economy?" He blamed that on Barney Frank forcing regulations on banks making them loan money to people who couldn't afford their mortgages. (Republicans apparently had no power to stop any of this.) He also insisted 9/11 happened only a couple of months after Bush took office. I pointed out he took office on 1/22/01, seven months and 20 days earlier. He said, "No, it was held up months because Al Gore insisted on challenging the vote in Florida to the Supreme Court."

There is so much wrong with these statements, I knew there would be no getting through to him. I wasted breath (but no time, 'cause I kept working) pointing out a few factual errors and inconsistencies in his arguments anyway because other people could overhear. I was afraid, if left unchallenged, his statements might be picked up and repeated by others.

[ozymandius]

3. Oil hovers under $69 in Asia

BANGKOK – Oil hovered just under $69 a barrel Friday in Asia as the first drop in U.S. unemployment claims in five months provided another sign that weak demand for crude could improve.

Benchmark crude for July delivery was down 4 cents at $68.77 a barrel in electronic trading on the New York Mercantile Exchange, after earlier rising as high as $69.52. On Thursday, the contract shot up $2.69 to settle at $68.81 a barrel after touching $69.60.

....

In other Nymex trading, gasoline for July delivery rose 1.38 cents to $1.9759 a gallon and heating oil gained 0.4 cents to $1.7877 a gallon. Natural gas for July delivery was up 3.4 cents at $3.844 per 1,000 cubic feet.

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

[ozymandius]

4. Despite fewer cuts, May jobless rate seen rising

WASHINGTON – With companies in no mood to hire, the unemployment rate is still rising. But the furious pace of layoffs is easing as the recession loosens its hold on the country.

The Labor Department on Friday is slated to release a report expected to show that a net total of 520,000 jobs were lost in May. If economists are right, the figure would mark the second straight month that job losses slowed. It also would be the fewest job reductions since October.

....

As the recession — which started in December 2007 and is now the longest since World War II — bites into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the fallout. Those include holding down workers' hours and freezing or cutting pay.

....

The Fed says unemployment will remain elevated into 2011 given the expectation of tepid recovery. Economists say the job market may not get back to normal — meaning a 5 percent unemployment rate — until 2013. Economic recoveries after financial crises tend to be slower, economists say.

http://news.yahoo.com/s/ap/20090605/ap_on_bi_go_ec_fi/us_economy

[ozymandius]

6. Temp work helps mask joblessness among Americans

....
It's a familiar predicament in today's economy, in which some 2 million people searching for full-time work have had to settle for less, and unemployment is much higher than the official rate when all the Americans who gave up looking for jobs are counted, too.

....

The 8.9 percent April unemployment rate was based on 13.7 million Americans out of work. But that number doesn't include discouraged workers or people who gave up looking for work after four weeks. Add those 700,000 people, and the unemployment rate would be 9.3 percent.

The official rate also doesn't include "marginally attached workers," or people who have looked for work in the past year but stopped searching in the past month because of barriers to employment such as child care, poor health or lack of transportation. Add those 1.4 million people, and the unemployment rate would be 10.1 percent.

The official rate also doesn't include "involuntary part-time workers," or the 2 million people like Noel who took a part-time job because that's all they could get, plus those whose work hours dropped below the full-time level. Once those 9 million workers are added to the unemployment mix, the rate would be 15.8 percent.

http://news.yahoo.com/s/ap/20090605/ap_on_bi_ge/us_becoming_a_statistic

[ozymandius]

5. Fed Intends to Hire Lobbyist in Campaign to Buttress Its Image

June 5 (Bloomberg) -- The Federal Reserve intends to hire a veteran lobbyist as it seeks to counter skepticism in Congress about the central bank’s growing power over the U.S. financial system, people familiar with the matter said.

Linda Robertson currently handles government, community and public affairs at Johns Hopkins University in Baltimore, and headed the Washington lobbying office of Enron Corp., the energy trading company that collapsed in 2002 after an accounting scandal. She was also an adviser to all three of the Clinton administration’s Treasury secretaries.

Robertson would help the Fed manage relations with lawmakers seeking greater oversight of a central bank that has used emergency powers to prevent Wall Street’s demise. While she wasn’t tied to Enron’s fraud, her association with the firm may raise questions, analysts said.

....

Robertson served under Treasury Secretaries Lawrence Summers, Robert Rubin and Lloyd Bentsen.

http://news.yahoo.com/s/bloomberg/20090605/pl_bloomberg/azjqkylci1am

[Demeter]

19. In a Word: WHY!!!

Why should the Fed spend one DIME lobbying Congress about anything?

There ought to be a law--and Congress may be ripe for it.

[saigon68]

20. Like a cat scratching to hide its Feces in a kids sandbox

Ass-Clowns

[UpInArms]

22. headed the Washington lobbying office of Enron Corp

'nuf said

[mbperrin]

53. It should have been 'nuf said, and I should read the whole thread before posting.

Sorry 'bout that. I lurk here daily and have for a couple of years. I seldom post, 'cause I often blurt.

But the SMW is one of the more sane spots around, and thank all of you regular posters for that!

[UpInArms]

57. welcome to the SMW mbperrin!

:grouphug:

you are a welcome lurker and you are welcome to blurt to your heart's content - and we, here at the SMW, oftentimes post on every corner

:hi:

[mbperrin]

59. Thank you! I really do appreciate it!

:woohoo:

[Ghost Dog]

74. "One of the more sane spots around". Such a compliment deserves

a reward.

http://www.youtube.com/watch?v=LddPuhzt0F4 (Yes, its Ivor Cutler performing "Shoplifters" on the Old Grey Whistle Test). (Alternate version: http://www.youtube.com/watch?v=gacGge-_cQo )

:evilgrin: :hi:

Edit to add a B side: http://www.youtube.com/watch?v=Ay_0_nWu8rw ("Looking for truth with a pin").

[tclambert]

82. ". . . the generous nourishment of the Spam running 'round my tubes."

Poetry. Or maybe it was pottery. Since Keats, I always confuse the two.

Thank you, Dog of the Ghost, or Ghost of the Dog, whichever or both.

[tclambert]

80. "one of the more sane spots around?" See post 36 and replies to it.

Mea culpa, mea maxima culpa.

(Spell check hated all my Latin.)

[mbperrin]

84. Tomatoes? Sure, I've got no Big Beef with that. In fact, I Plum like

them, and after the Big Rainbow comes out, things will be Evergreen. Of course, there is that Big Belgium matter to consider, but look at the Great White or even the Pineapple. They're both good, though no Mortgage Lifter. Or if you can find an Arkansas Traveler, they could get you to Dr. Walter by the Fourth of July. Gold Dust should be so valuable, and you know Green Zebras are rare, too! Mr. Stripey might get you to a Nebraska Wedding or even to India, but no Taxi can get you to Yellow Perfection! All of them are Gardeners Delight, and when you've got that Sweet Million, you'll be glad you went with tomatoes!

From a guy who spent two decades picking a half acre garden for his mom every season....

[Mojorabbit]

87. LOL

I have several of those varieties germinating in pots right now.

[mbperrin]

51. "headed the Washington lobbying office of Enron Corp."

Well, she's certainly a great pick for the current group of illusionists, then.

[ozymandius]

7. U.S. FDIC eyes Citi top management shake-up - WSJ

BANGALORE, June 5 (Reuters) - The Federal Deposit Insurance Corp is aiming at a shake-up of Citigroup Inc's (C.N) top management, including replacing Chief Executive Vikram Pandit, the Wall Street Journal said, citing people familiar with the matter.

U.S. officials have reached out to former U.S. Bancorp (USB.N) Chief Executive Jerry Grundhofer, who recently joined Citigroup's board, to see if he is interested in the top position at Citi, the paper said, citing people familiar with the matter.

Under Chairman Sheila Bair, the FDIC recently pressed a fellow regulator to lower the government's confidential ranking of Citi's health, the paper said, adding that such a move would let regulators control the company more tightly.

....

FDIC officials are particularly concerned about Citi's lack of senior executives with experience in commercial banking, according to the paper.

....

The FDIC is heavily exposed to Citigroup, the paper said, adding that it is helping finance a roughly $300 billion loss-sharing agreement with the company.

http://www.reuters.com/article/rbssBanks/idUSSP44394520090605

[ozymandius]

8. GM reaches prelim deal with Penske on Saturn: report

(Reuters) - General Motors Corp (GM.N) (GMGMQ.PK) has reached a preliminary deal to sell its Saturn distribution network to the No. 2 U.S. dealership group Penske Automotive Group (PAG.N), the Wall Street Journal said, citing people familiar with the matter.

GM and Penske have signed a memorandum of understanding, the paper said, adding that deal value was not immediately available.

http://www.reuters.com/article/GCA-autos/idUSTRE5541J120090605

[ozymandius]

9. More Sausage Hiding: Banks by Karl Denninger

Now we see real reporting instead of the puff piece on Bloomberg yesterday:

In a move that confirmed the suspicions of many analysts, the agency called off plans to start a $1 billion pilot program this month that was intended to help banks clean up their balance sheets and eventually sell off hundreds of billions of dollars worth of troubled mortgages and other loans.

Many banks have refused to sell their loans, in part because doing so would force them to mark down the value of those loans and book big losses. Even though the government was prepared to prop up prices by offering cheap financing to investors, the prices that banks were demanding have remained far higher than the prices that investors were willing to pay.

Translation:

The banks are still carrying these "assets" at well-above their actual market value. This means their balance sheets are showing them to be healthier than they really are.

The Government, which claimed it was going to "drain the swamp" and get the market moving again, tried everything short of the barrel of an M-16 in the mouth of people like Blankfein and Pandit, but couldn't get them to sell.

But rather than force the recognition of market prices on the balance sheets, which would force these banks to either sell or be FDIC'd (incidentally, the only correct pair of options the banks should have) the government instead is allowing the banks to continue to lie about the market value of these "assets" and carry them above what the market will pay - that is, they are allowing the continuing intentional distortion of so-called "book value", reserve ratios and soundness.

....

Of course this isn't how the government banking cartel (the same so-called "regulators" that allowed and even encouraged book-cooking when it came to reserves and deposits) sees it:

F.D.I.C. officials portrayed the change as a sign that banks were returning to health on their own.

Baloney. If the banks were returning to health on their own they wouldn't care if the market price was recognized on their balance sheets.

The FDIC is lying.

http://market-ticker.org/archives/1089-More-Sausage-Hiding-Banks.html

[Hugin]

12. Sad as it is to say...

I now believe that what KD is talking about here is the very core of the current 'rally'.

And it scares the heck out of me...

If the Banks are not being up front about their assets... How can they BUY anything? It gives the (former Investment non-) Banks essentially infinite leverage. They can out bid anybody on anything. Well, anyone who has a conscience... or regulations.

This is pretty much Game Over for Capitalism and I don't see any system, but, Anarchy stepping in to replace it. What will be the new system? Feudalism is the only thing I can see.

This is more than a crisis of confidence... Confidence doesn't even factor into the equation any longer.

[Demeter]

23. You Forget the FRSP

The times, they are changin'.

If there were a Doomsday clock, it would have gone from 1 AM to 11:59 PM in the space of my lifetime--roughly 55 years.

[DemReadingDU]

21. Denninger - P.S.

Denninger PS: The deception cannot continue beyond where the cash flow ceases. In the end you can't pay your electric bill with phony capitalized interest that you will NEVER collect! That day, unfortunately, will likely coincide with the collapse of the FDIC, at which point every nickel you have in any bank anywhere will be GONE, courtesy of our government continuing to enable, allow and even participate in raw fraud. Its been going on now for more than two years folks, and the cops have all been bribed!
http://market-ticker.org/archives/1089-More-Sausage-Hiding-Banks.html


Does anyone think this could also happen with the NCUA for the credit unions? I have Treasury Bills purchased directly from TreasuryDirect.gov, and linked back to the credit union. So if banks and credit unions fail, then there is no way to redeem Treasury Bills.

Spouse says not to worry. He thinks that the government would instead print enough money to pay us all of our deposits. Otherwise, we citizens would be marching in DC with guns, pitchforks, and ropes.

[Demeter]

27. I'm Seriously Considering Buying the Pitchfork, Torches and Guns

Can you get out of paper and into something tangible? Farmland that can be rented, oil in storage--not all gold, for sure.

The insanity is getting more insane. There is no happy ending, but there are still alternatives....

[DemReadingDU]

32. maybe a mini-farm

That way we could grow food to eat, have a few chickens for eggs, and a couple cows for milk.

[tclambert]

39. I went to the nursery last week and got a few plants.

See post 36.

[ozymandius]

10. "A Tale of Two Depressions"

Posts like this one at VoxEU, from Barry Eichengren and Kevin O'Rourke, make me feel less of perma bear and more of an objective observer who happens to have been commenting when there was little reason to be of good cheer, as far as my skepticism of the "green shoots-recovery in 3Q-4Q 2008" theory is concerned. This is a follow up to an April post by the two economists,

No country (at least based on reports I have seen) has ever recovered from a severe financial crisis as quickly as a 3Q-4Q timetable would suggest. And the speedy recoveries generally featured having banks take writedowns and restructuring/writing off the underlying bad debt, plus seriously devaluing the currency at a time of better (as in not awful) global growth. In other words, being able to pull the economy up via much stronger exports played a big role. And those countries still had nasty downturns, but also solid rebounds.

Our policy responses may not be as bad as those of the Great Depression, but they are a long way away from best practices. So I have had trouble seeing why we should expect better outcomes. Both the Depression and the Japan bust featured a period after the initial shock where things seemed to be stabilizing, and then the decay resumed.

Even by my sometimes dystopian standards, this post is sobering. It has a ton of charts, most of which show world performance indicators on an even steeper trajectory downward than in the Depression. Welcome to a tightly coupled world.

From VoxEU:

This is an update of the authors' 6 April 2009 column comparing today's global crisis to the Great Depression. World industrial production, trade, and stock markets are diving faster now than during 1929-30. Fortunately, the policy response to date is much better. The update shows that trade and stock markets have shown some improvement without reversing the overall conclusion -- today's crisis is at least as bad as the Great Depression.

New findings:

World industrial production continues to track closely the 1930s fall, with no clear signs of ‘green shoots’.

World stock markets have rebounded a bit since March, and world trade has stabilised, but these are still following paths far below the ones they followed in the Great Depression.

There are new charts for individual nations’ industrial output. The big-4 EU nations divide north-south; today’s German and British industrial output are closely tracking their rate of fall in the 1930s, while Italy and France are doing much worse.

The North Americans (US & Canada) continue to see their industrial output fall approximately in line with what happened in the 1929 crisis, with no clear signs of a turn around.

....

....To sum up, globally we are tracking or doing even worse than the Great Depression, whether the metric is industrial production, exports or equity valuations. Focusing on the US causes one to minimise this alarming fact. The “Great Recession” label may turn out to be too optimistic. This is a Depression-sized event.
That said, we are only one year into the current crisis, whereas after 1929 the world economy continued to shrink for three successive years. What matters now is that policy makers arrest the decline. We therefore turn to the policy response....

Click here for the original link at Naked Capitalism and here for the rest of the post at VoxEU.

[ozymandius]

11. This is a "must read" such that it has hard data to substantiate the persistent

mood on this thread. The SMW crowd has a reputation of being perma-bears. Some, maybe you, have been harshly criticized for such. Occasionally, a detailed accounting of the state of our economic ship crosses the horizon. This post is one such item that deserves everyone's attention.

Edit to add: If the verbiage does not grab, pick you up by the lapels, then the charts will. The "green shoots" crowd is populated by either liars or fools.

[Hugin]

Based on your recommendation.

I'll study it carefully.

[ozymandius]

16. Thanks. I'll give my credit to Yves Smith. When she says "go read this"

then I am compelled to accept the recommendation. I trust her judgment on such things as a well-educated professional who has been "in the trenches" for decades. She is an avowed iconoclast who has been at kool-aid drinking parties but never sipped.

[Demeter]

29. Ozy, I am the Embodiment of Cockeyed Optimism

but facts are facts. We are in deep trouble, and it's getting worse, thanks to our "leaders". That's not being a Bear. That's facing reality.

[ozymandius]

49. That's the point: I want to be optimistic. Now all I need is a reason.

I've seen no reason to be optimistic for almost ten years. Ten years have brought us the recycled should-be has-beens that are continuously regurgitated by the system. Summers and Rubin - I am looking at them.

[Hugin]

15. And yet... Chrysler is being sold to an Italian company?

"There are new charts for individual nations’ industrial output. The big-4 EU nations divide north-south; today’s German and British industrial output are closely tracking their rate of fall in the 1930s, while Italy and France are doing much worse."

This makes absolutely no sense.

[DemReadingDU]

28. Indiana has filed lawsuit to block the sale

Here is the file and video from ZeroHedge
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3905319&mesg_id=3905490

[rfranklin]

13. Why the Stock Market No Longer Reflects Main Street Economics

One of the biggest bankruptcies in history occurred on June 1st yet you would not know this by looking at the stock market. In fact, the Dow Jones Industrial Average (DJIA) shot up by 220 points. If we look at total assets, this is the fourth largest bankruptcy in history. The Dow is made up of 30 companies that show a supposedly wide cross section of the American economy. The company that filed for bankruptcy was General Motors and was actually one of the 30 components. A company that dates back to 1908 and survived the Great Depression. So how can it be that a company that employs 250,000 filing for bankruptcy is actually good for the stock market and makes the DJIA rally so strongly? The easy answer is the stock market no longer reflects the economic reality on main street.

The U.S. Treasury and Federal Reserve have created an artificial system and the stock market is reacting to these new conditions. These conditions now assume rock bottom low rates and financial institutions being continuously bailed out. Yet this paradigm is not helping the American public that now has 25,000,000 unemployed or underemployed family, friends, or colleagues. Think of the implication of the GM bankruptcy. Right when the announcement was made there were details of laying off thousands of workers and closing numerous dealers. The market rallies and unemployment this Friday will shoot up by another 500,000. This disconnect is so obvious and shows the priorities of those pushing legislation.

-more-

http://www.doctorhousingbubble.com/stock-market-dissonance-why-the-stock-market-no-longer-reflects-main-street-economics-the-dow-jones-industrial-average/

[UpInArms]

14. dollar watch

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

Last trade 79.563 Change +0.149 (+0.19%)

EUR/USD: Trading The US Change in Non-Farm Payrolls

http://www.dailyfx.com/story/topheadline/EUR_USD__Trading_The_US_Change_1244138801679.html

U.S. Non-Farm payrolls are expected to drop 520K in May, while the annual rate of unemployment is projected to reach a 26-year high of 9.2% for the same period, and fears of a protracted downturn could weigh on the exchange rate as the nation faces its worst recession in over half a century.

Trading the News: US Change in Non-Farm Payrolls

What’s Expected
Time of release: 06/05/2009 12:30 GMT, 08:30 EST
Primary Pair Impact : EURUSD
Expected: -520K
Previous: -539K

<snip>

April 2009 US Change In Non-Farm Payrolls

U.S. Non-Farm Payrolls fell 539K in April amid expectations for a 600K drop in employment, while the jobless rate surged to 8.9% from 8.5% in March, which is the highest level since 1983. The data breakdown of the report showed public-sector jobs increased 72K during the month, with the participation rate rising to 65.8% from 65.5%, while private payrolls slumped 611K from the previous month. The data suggests economic conditions are beginning to stabilize as the government takes unprecedented steps to stimulate the ailing economy however, growth prospects are likely to remain subdued throughout the first half of the year as households face a weakening labor market paired with fears of a protracted downturn. At the same time, the collapse of the auto industry is likely to weigh on the economy going forward, and the jobless rate is likely to push higher as GM and Chrysler head into bankruptcy.



March 2009 US Change In Non-Farm PayrollsThe U.S. shed another 663K jobs in March, while the annual rate of unemployment surged to 8.5% from 8.1% in February, which is the highest level since November 1983, and the labor market is likely to deteriorate further as business continue to cut back on production and employment in an attempt to weather the economic downturn. The world’s largest economy has lost nearly 5.1M jobs since the recession began in late 2007, and conditions are likely to get worse as firms face fading demands from home and abroad. As a result, Fed Chairman Ben Bernanke said that the jobless rate could perhaps exceed 10% ‘for a period’ as the downturn in the global economy intensifies, and policymakers may take additional measures to get the nation back on track as private-sector spending, which is one of the biggest drivers of growth, deteriorates.



...more...

Carry Interest is Rising But a Lack of Risk Doesn't Translate Into Strong Fundamentals

http://www.dailyfx.com/story/bio1/Carry_Interest_is_Rising_But_1244163533185.html



• Carry Interest is Rising But a Lack of Risk Doesn’t Translate Into Strong Fundamentals
• Central Banks Keep Rates Unchanged Yet Policy Officials Cautious
• Growth is Emerging as the Underlying Driver of Market Sentiment

Event risk was torrential this past week with a round of central bank rate decisions that covered both the most hawkish and dovish extremes of the policy scale as well as a slew of headline growth indicators. Naturally, one would expect extreme volatility and the establishment of new trends from this mix of fundamental fodder; but instead, we have seen exactly the opposite. The presence of so much event risk has frozen risk trends as market participants wait to absorb the releases rather than trading against a potentially influential event or piece of data. Since this week started with growth numbers on Monday and will end with US NFPs on Friday; there has is a consistent damper on swells in risk appetite. This has been seen across all of the capital markets. The S&P 500 has stalled below 950 just after hitting a seven month high; gold’s advance has seized within $10 from once again testing $1000/oz; and the Carry Trade Index has pulled back after a brief incursion to highs not seen since before the height of the financial crisis last October. It is not a stretch at this point, that this is merely a break within a rather momentous bull trend. However, looking back further than just the past three to six months, there is reason to believe that this advance could also be a correction in a much larger trend. The Carry Index is still nearly 28 percent off its record highs. It is unlikely that we will see the level of sentiment that preceded the crisis for a long time.

It is hard to be skeptical in a bullish market – much harder than doubting a long-term decline. Investors are hard-wired to buy assets as they find their way into the market. However, there is a difference between an influx of capital into the market and the appreciation an asset enjoys when speculation supports its strength. Sidelined money is returning to a market space that has shrunk (reducing the opportunities for liquidity) and the pool itself has been severely diminished through the market collapse and global recession of the past few years. Eventually, the market will bear as much of the risk-seeking capital as participants are willing to invest (unless another crisis unexpectedly arises); and then fundamentals will to come back into view. The burden of risk has not completely dissipated. The grip of recession is still tight (even if there are signs its pace is slowing) and the eventual recovery will be fraught with difficulties. Upon the recovery, government’s will have to unwind their aid, which restrict credit and saddle the market with toxic debt that is currently being held on the central bank’s accounting books. Widening rates on US mortgages and TALF loans are already showing signs of strain. What’s more, a revival of investment will require attractive returns. With central banks maintaining interest rates near multi-decade lows and keeping open the option to further loosen policy and expand quantitative easing; it is clear that there is little hope to see a significant increase in yields anytime soon.

...more...

[UpInArms]

17. Countrywide's Mozilo charged with fraud

http://www.reuters.com/article/businessNews/idUSTRE5536Q620090605?feedType=RSS&feedName=businessNews?sp=true

LOS ANGELES/WASHINGTON (Reuters) - Angelo Mozilo, who built the largest U.S. mortgage lender, was charged with securities fraud and insider trading on Thursday, making him the most prominent defendant in investigations into the U.S. subprime mortgage crisis and housing bust.

The U.S. Securities and Exchange Commission said Mozilo, 70, co-founder of Countrywide Financial Corp and poster boy for the U.S. mortgage meltdown, made more than $139 million in profits in 2006 and 2007 by exercising 5.1 million stock options and selling the underlying shares.

The SEC said in its civil lawsuit, filed in Los Angeles on Thursday, that in one instance, the day before he set up a stock trading plan on September 25, 2006, Mozilo sent an email to two Countrywide executives that said: "We are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales."

Those executives, then Countrywide President David Sambol, 49, and Chief Financial Officer Eric Sieracki, 52, were charged by the SEC with knowingly writing "riskier and riskier" subprime loans that they had a limited ability to sell on the secondary mortgage market.

Countrywide was ground zero in the mortgage and housing industry meltdown that built up momentum from late 2006 and has cost U.S. banks hundreds of billions of dollars -- if not trillions -- in credit losses and writedowns.

Lawyers said the SEC's approach in the Countrywide case, which focuses on the failure to disclose vital information about the deteriorating quality of company assets, may become a template for the agency as it seeks to bring cases against executives at other financial institutions that blew up during the crisis.

The SEC has been under pressure to bring a high-profile case after it was blasted for missing Bernard Madoff's $65 billion investment fraud. New SEC chief Mary Schapiro has vowed to bring cases swiftly and has warned that there would be "no sacred cows."

...more...

[tclambert]

41. Indictments?

[Demeter]

43. None to Date

no talk, either.

[Demeter]

18. About That Cartoon...

The current theory is that birds are living dinosaurs--direct descendants of T Rex, if you will. I have to pass a Canadian goose nursery every day (taking my life and shins in my hands, so to speak), and after watching the goslings stagger about, I am certain of it. Birds are the remnants of the Triassic, Jurassic, and Cretaceous eras.

No wonder some people get freaked out by birds--it must be atavistic.

[Hugin]

25. Oh, goody! Does that mean this is going to "The Birds" weekend on the WEE?

:bounce:


"Doomsayer in diner: It's the end of the world"

Edit to add link: http://www.imdb.com/title/tt0056869/quotes (Warning to Dialup DUers... IMDB now has one of those damned bandwidth sucking 'screen saver' popups.)


Seriously, tho... We should try a Hitchcock weekend WEE sometime. ;)


Darn it... I had to look up 'atavistic'. My mind is gone. :mourn:

[Demeter]

31. Well, Since There Was Nothing on the Calendar, OK

Alfred Hitchcock it is. Suits the times, for sure.

Don't worry about your mind--you aren't alone and it isn't age. It's stress. The mindless idiots in DC and Wall Street KNOW they can't keep the wool over our eyes, but they will die trying. Now that's stress! But they get handsomely compensated for it, until the FRSP starts up.

I have seen many Hitchcock films, the Kid is a fan, so it might go a bit better than Galactica (which I'm still not going to watch, because there's no way I'm up for a Downer).

Hitchcock is so innocent, too, though he tried to be scary--it just wasn't possible post-WWII and post-Depression, without nuclear annihilation.

Nowadays, some people think nuclear annihilation would be just the thing--as long as they were "Raptured" out of it. Signs of the times, folks. Signs of the times.

[Hugin]

34. I'll go scout out some good Hitch content.

Wow! The quotes section for "The Birds" at IMDB is really odd. Other than the E-O-T-W quote I posted, none of the others make any sense as stand alone quotes. Weird...

I mean... Is: "Melanie Daniels: Get Cathy and Lydia out of here!" really a meaningful quote to anybody? Anyone get a charge out of that? Speak up! :shrug:

[Demeter]

38. The Man Who Knew Too Much Is Better

Que' sera', sera', whatever will be, will be. The future's not ours to see, que' sera', sera'.

[Hugin]

44. Perfect.

From Hitchcock's biography:

"His first project was supposed to be a film about the Titanic, but Selznick scrapped the project because he 'couldn't find a boat to sink.'"

:rofl:

[Hugin]

47. Okay... Okay... One more 'till later.

"In a recent USC class on Hitchcock (fall of 2000), guest speaker Patricia Hitchcock revealed that two guilty pleasures of Hitch's were Smokey and the Bandit (1977) and Benji (1974)!"

:rofl:

I lurve this guy!

[tclambert]

48. "North by Northwest" has some I like.

Roger Thornhill: Now you listen to me, I'm an advertising man, not a red herring. I've got a job, a secretary, a mother, two ex-wives and several bartenders that depend upon me, and I don't intend to disappoint them all by getting myself "slightly" killed.

* * *
And here's a math joke!

Eve Kendall: Roger O. Thornhill. What does the O stand for?
Roger Thornhill: Nothing.

* * *

Cary grant is damn funny. I'll save the others.

[ozymandius]

60. I made some T-Rex and vegetable stew last night.

T. Rex-Chicken Controversy Roils Protein Scientists

[Hugin]

69. You see what's going on here, right?

This controversy is masking the fact that... They found proteins in a Dinosaur fossil! :forcryingoutloud:

And instead of concentrating on the science they go spinning off on an ego driven rampage of beating each other about the head and neck with rubber hoses... Hmmpf! :eyes: Typical apes.

Thanks for the new sig line, Ozy. :D

[KoKo]

24. Tribal Wisdom of the Dakota Indian and Corporate America---(A Chuckle)

7 Factors That Led to (Financial) Crisis
Email this post Print this post
By Barry Ritholtz - June 4th, 2009, 11:48AM

As I was working on Bailout Nation, I struggled to find a way to communicate the myriad forces that combined to cause the collapse. The book details the many elements involved, but I wanted a visual way to depict what I took 20 chapters to explain.

I had long been a fan of Wall Stats — the great site that Jess Bachman runs. Over the course of a few days, I described the various factors and how they interact.

Jess took what I described, and turned it into a terrific graphic that goes a long way to explain what happened (credit the bomb to Mrs Big Picture).

It became the centerfold of the book, running just before Part IV (Bailout Nation).
http://www.ritholtz.com/blog/2009/06/7-factors-that-led-to-crisis/

-------------------------------------------------
(Comment from poster in thread on the Financial Situation)
Init4good Says:
June 4th, 2009 at 1:50 pm

In other words….

Tribal Wisdom of the Dakota Indian.

The tribal wisdom of the Dakota Indians, passed on from generation to generation, says that, “When you discover that you are riding a dead horse, the best strategy is to dismount.”

However, in corporate America, and especially in government agencies, more advanced strategies are often employed, such as:

1. Buying a stronger whip.
2. Changing riders.
3. Appointing a committee to study the horse.
4. Arranging to visit other countries to see how other cultures ride horses.
5. Lowering the standards so that dead horses can be included.
6. Reclassifying the dead horse as living-impaired.
7. Hiring outside contractors to ride the dead horse.
8. Harnessing several dead horses together to increase speed.
9. Providing additional funding and/or training to increase dead horse’s performance.
10. Doing a productivity study to see if lighter riders would improve the dead horse’s performance.
11. Declaring that as the dead horse does not have to be fed, it is less costly, carries lower overhead and therefore contributes substantially more to the bottom line of the economy than do some other horses.
12. Rewriting the expected performance requirements for all horses.

http://www.ritholtz.com/blog/2009/06/7-factors-that-led-to-crisis/

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

[UpInArms]

26. hehehehe

my fave:

8. Harnessing several dead horses together to increase speed.

:hi:

[Hugin]

33. 13. Hiring H1-B riders because they are better dead horse riders.

14. Offshoring the dead horse riding to cut costs.

Needs some updating. ;)

[Demeter]

35. They Aren't Riding Those Dead Horses--They Are Eating Them

which is what one should do with a dead horse--at the first sign of deadness.

Otherwise, all you've got is the pelt, and the hooves and bones for glue or gelatin. The rest is compost or dog food.

But I'm not going to beat the subject to death...

[mbperrin]

55. My dad used to say that you can lead a horse to water, but you

can't make him drink. BUT you can hold him under until he drowns.

It's the method I use to teach economics to my high school seniors ;)

[Demeter]

61. You Hold The Students Underwater Until they DROWN???!

Is this what they teach in Ed School?

[mbperrin]

70. Well, I hold their head under so many facts, they must breathe them in.

Yes, they drown in facts, rather than swim in popular myths, like "work hard, and you will succeed" Or "anyone can become rich and powerful in the US" and other such nonsense.

Instead, they are introduced to micro-entrepreneurship, avoiding systemic traps like "ghost" stewardship of assets, the difference between real and nominal assets, the difference between sensible debt and wild-eyed owing, and other such similar topics.

It's not easy, what with the Box O' Satan spewing its poison 24 hours a day and unbounded unjustified Pollyannaism by those around them in a social setting.

Yep, it's called overlearning.

[Hugin]

71. It's good to have another teacher amongst us here.

We get asked many questions... Many of which, I don't know the answers to.

Things are so weird lately, I'm not sure anyone does.

[Demeter]

77. Maybe You Could Offer Online Courses?

I'd like to think there's some rhyme or reason to this daily nonsense..

[mbperrin]

85. Strangely, I developed an online course in Eco 101 for my MA in

e-Education, but because I also have an English degree, I teach senior English online. Eco is still a brick class in this district.

The rhyme or reason, as I know YOU know, is that the "right" people must end up with the money. Happily, these folks are mostly powerful, not discerning, so it's not terribly difficult to get under their radar and do all right nearly invisibly.

[tclambert]

58. 15. Stress test the dead horse and declare it healthy

whatever the results.

[Demeter]

64. That's What We Did in Old Country, Tovarsch!

[Hawkowl]

94. Awesomely funny! nt

[Festivito]

30. Debt: 06/03/2009 11,374,265,930,605.76 (DOWN 8,471,785,319.47) (Small change.)

(Both down, just not by much.)

= Held by the Public + Intragovernmental(FICA)
= 7,098,401,699,224.91 + 4,275,864,231,380.85
DOWN 3,266,733.82 + DOWN 8,468,518,585.65

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 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.79, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 306,573,542 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,101.26.
A family of three owes $111,303.79. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 33 days.
The average for the last 21 reports is 7,913,797,062.15.
The average for the last 30 days would be 5,539,657,943.51.
The average for the last 33 days would be 5,036,052,675.92.
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$/day.
There were 91 reports in 134 days of Obama's part of FY2009 averaging 0.10B$ per report, 0.11B$/day so far.
There were 166 reports in 246 days of FY2009 averaging 8.13B$ per report, 5.49B$/day.

PROJECTION:
There are 1,327 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 18.7T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
06/03/2009 11,374,265,930,605.76 BHO (UP 747,388,881,692.68 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: 1,349,541,033,693.30 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/11/2009 -000,029,759,155.68 ---- Mon
05/13/2009 -000,207,515,478.68 ---
05/14/2009 +013,927,016,419.76 ------------**********
05/15/2009 +013,064,365,189.63 ------------**********
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******
05/26/2009 +000,178,213,075.69 ------------******** Tue
05/27/2009 +000,332,821,919.42 ------------********
05/29/2009 +019,434,324,960.50 ------------**********
06/01/2009 +078,540,152,146.76 ------------********** Mon
06/02/2009 +000,543,288,286.72 ------------********
06/03/2009 -000,003,266,733.82 -----

143,183,559,714.18 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,709,634,127,346.69 in last 258 days.
That's 1,710B$ in 258 days.
More than any year ever, including last year, and it's 168% of that highest year ever only in 258 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 258 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=3907175&mesg_id=3907198

[Festivito]

95. Debt: 06/04/2009 11,388,997,387,553.01 (UP 14,731,456,947.25) (Rising.)

Debt: 06/04/2009 11,388,997,387,553.01 (UP 14,731,456,947.25) (Rising.)
(Debt is going up lately.)

= Held by the Public + Intragovernmental(FICA)
= 7,110,157,488,708.66 + 4,278,839,898,844.35
UP 11,755,789,483.75 + UP 2,975,667,463.50

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 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.79, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 306,580,742 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,148.44.
A family of three owes $111,445.33. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 8,048,924,025.69.
The average for the last 30 days would be 5,634,246,817.98.
The average for the last 31 days would be 5,452,496,920.63.
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$/day.
There were 92 reports in 135 days of Obama's part of FY2009 averaging 0.14B$ per report, 0.14B$/day so far.
There were 167 reports in 247 days of FY2009 averaging 8.17B$ per report, 5.52B$/day.

PROJECTION:
There are 1,326 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 18.7T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
06/04/2009 11,388,997,387,553.01 BHO (UP 762,120,338,639.93 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: 1,364,272,490,640.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/13/2009 -000,207,515,478.68 ---
05/14/2009 +013,927,016,419.76 ------------**********
05/15/2009 +013,064,365,189.63 ------------**********
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******
05/26/2009 +000,178,213,075.69 ------------******** Tue
05/27/2009 +000,332,821,919.42 ------------********
05/29/2009 +019,434,324,960.50 ------------**********
06/01/2009 +078,540,152,146.76 ------------********** Mon
06/02/2009 +000,543,288,286.72 ------------********
06/03/2009 -000,003,266,733.82 -----
06/04/2009 +011,755,789,483.75 ------------**********

154,969,108,353.61 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,724,365,584,293.94 in last 259 days.
That's 1,724B$ in 259 days.
More than any year ever, including last year, and it's 170% of that highest year ever only in 259 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 259 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=3908947&mesg_id=3909024

[tclambert]

36. A personal investment update.

So far, my investment in Fannie Mae has gone straight down. If you recall, my breakeven point is about 85.4 cents per share. FNM closed yesterday at 73 cents per share. That's a decrease of about 14.5%. Youch. Still, not worried. The plan is not to sell until a couple of years after an economic recovery starts. According to some experts, that could be in 3 years. According to others, it will be the 12th of never.


Meanwhile, I'm trying a new investment--tomato manufacturing plants. These modular factories take chemical inputs--toxic chemicals, sure, but mostly in dilute form--and re-assemble them into tomatoes. That part involves nano-technology. Very high tech. The raw chemicals can be found mostly in plain old dirt, though my investment advisers highly recommend an additional investment in a chemical supplier known as Miracle-Gro. The factories get their power from solar cells, very inefficient solar cells, only about 6-11% efficiency, but very cheap. In fact, the factory also manufactures these solar cells and thus expands its capacity automatically.

The ones I invested in make Grape tomatoes and an heirloom variety called Bonnie Best. I'm hoping for a return suitable for salads and sandwiches, not sauces or canning. While I was at the agricultural over-the-counter broker's, I also put a little money into green pepper and leaf lettuce futures.

To limit the real estate requirements, my facilities face the limitations imposed by flower pots. So, in a way, you could say I have invested in a pot farm. (My neighbor says it would be pretty lucrative to go from tomatoes to actual pot, then went into a surprisingly detailed description of the process. But he declined to explain how he had acquired such expertise.)

I wonder if during this recession, Victory Gardens will become a fad.

[UpInArms]

40. now that sounds like your investments might grow

in value - perhaps the stalks will split?

[tclambert]

50. A stalk split! Funny.

I hope to harvest some dividends.

[UpInArms]

56. and you might get some seed money for the next

investing season.

[Ghost Dog]

76. Prune vigorously all excess, sick and exhausted growth and recycle as compost.

Remove and safely dispose of parasites.

[DemReadingDU]

45. Victory Gardens

I think Victory Gardens are going to become a necessity. With the slowdown in the economy, and expensive gas, food will not be able to get to the grocery stores as we know it today. Not everyone will have the time or patience to grow edibles, so neighbors will be sharing their food and bartering for other things, or services. So our neighborhood is going to become our community. A community where everyone knows everyone, and people share and barter in order to survive.

Your new investment--tomato manufacturing plants -- should become quite fruitful by the end of the summer!

:)

[Dr.Phool]

68. I'm starting to get some nice tomatoes in my Topsey Turveys.

One Early Girl has some nice sized green ones on it now. The Beefsteaks are sprouting some smaller ones now.

And I have about a dozen, big green habaneros on the pepper plant.

Ozy was right. They DO try to grow upwards, and wrap themselves around the planter.

[Dr.Phool]

65. I've got an anchovy farm.

Let's merge and become a pizza shop.

:evilgrin:

[KoKo]

91. In the last years I've lived here in NC ...NO ONE asks for Anchovies!

I moved here from NJ after CT/NY...and even then...no one was asking for Anchovies on their Pizza. I think you might need to revise your business plan ...unless you find a new use for Anchovies. :shrug:

[InkAddict]

67. There are some problems w/distribution system of product

1. Tomato rustlers - insects, dogs, neighbors' progeny. 2. No OSHA safety requirements - Patio ingress/egress should be assessed and perhaps ramps built to minimize safety hazard on route to kitchen. Occupational hazards within the processing facility itself - KNIVES! 3. Warehousing of surplus product - will you sell, consume, destroy, neglect until rotten. 4. Product life cycle is seasonal; change in manufacturing environmental conditions is inevitable.

[tclambert]

83. I guess I'm a free marketeer after all.

"OSHA safety requirements?" OMG, you're right, there are knives in my kitchen! Plus, I thoughtlessly bought a Samurai Shark to keep them sharp, thereby enhancing the danger. I don't even have any CUIDADO signs.

[KoKo]

89. I think I have an "issue" with you on this one:

"These modular factories take chemical inputs--toxic chemicals, sure, but mostly in dilute form--and re-assemble them into tomatoes. That part involves nano-technology. Very high tech. The raw chemicals can be found mostly in plain old dirt, though my investment advisers highly recommend an additional investment in a chemical supplier known as Miracle-Gro. The factories get their power from solar cells, very inefficient solar cells, only about 6-11% efficiency, but very cheap. In fact, the factory also manufactures these solar cells and thus expands its capacity automatically"

Fraught with problems.....Nano Tech..(small particles) and "controlled nutrients." But, as to the Victory Gardens..if the are planted in real earth...and depend on rainwater...I think it's a movement that was strong back in the 70's and then died under Reagan...but COULD catch on! Community Gardens.

It's not so much our veggies I worry about...it's the cloned pork/chickens that have NO TASTE and even those marked ORGANIC seem to lack what I remember about what a good chicken tasted like.

Not to worry though. Pretty soon all those of us who remember what Chicken/Ham/Pork Roasts "used to taste like" will be DEAD...and then you can depend on the suppliers (including the Fast Food Folks who will never die to ease you into eating their tasteless crap. The "Powers that Be" in Big Agri and Pharma and Manufacturing are banking on getting those of us who KNOW to be "under the bus" and gone.

"Dead folks tell no tales."

[Demeter]

42. A Couple of Real-life Vignettes

I accompanied an elderly friend to the crematorium. She wanted to prepay, and wanted somebody along to read the fine print.

The firm seemed very straightforward and all, but there's a glaring hole in their business plan:

the prepaid money goes into an escrow account run by Chase. Until recently, the funds accumulated so that there was more money than needed at the time the contract was to be executed, and the heirs got a little "bonus". But lately, the crematorium has been eating losses. So I asked what happens if they go out of business...


Another friend whose husband lost his job several years ago used her inheritance to keep the family afloat while he hunted for a job, instead of saving it for her retirement. He finally found one in Canada (the lucky dog), so she's trying to sell the house, and being raked over the coals by the buyer. But at least she has one. I told her how fortunate she is not to be taking a bigger bath, small consolation, but true. Also advised her to try for citizenship...

Think about it. We may not even be able to die in our native land.

[DemReadingDU]

46. Maybe I should get a passport now, n/t

[rfranklin]

52. Check out the requirements that Canada requires....

http://www.settlement.org/sys/faqs_detail.asp?faq_id=4000345

[Karenina]

86. I did that 15 years ago

and got the hell outta Dodge.

[tclambert]

54. I would think a crematorium would see an increase in business.

People still die during a recession. But not as many want to pay for a "fancy" burial of an embalmed corpse. Seems like the number of cremations ought to increase.

[Demeter]

66. The Trick Is to Make Up for What Chase Loses

before the contract comes due.

[KoKo]

90. Well...that's interesting food for thought. Thanks for passing it along...

This isn't something our Mainstrea McCorporate America will report...so it's good we have "scouts out there in the field." Sounds dreadful on first read. :-(

[Dr.Phool]

72. HuffPost: The Insanity of Ayn Rand: The Fountain-Brain-Dead

I found this posted in Editorials by regnaD kciN. I felt that it belongs here also.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x453691

And read the whole review at:

http://www.huffingtonpost.com/tallulah-morehead/the-insanity-of-ayn-rand_b_211209.html

The movie was written by the novelist-nutball, Russian-American, writer-philosopher Ayn Rand. She promoted a form of highly-anti-communist philosophy called "Objectivism," probably because it is so objectionable.

Being virulently anti-Communism-and-Socialism, she believed that ownership and rights of property were sacrosant, although when Howard Roarke, her Ideal Man, blows up other people's property because he doesn't like it, it's a righteous act, not a violation of other people's rights of property. Ayn was a hypocrite.

Ayn is having a small vogue right now (very small, as the country is becoming far less happy with rightwing nutballs), because her magnum opus, Atlas Shrugged, an insane novel that makes The Lord of the Rings seem like a speedy short story, is celebrating its fiftieth anniversary just now. This means that the people who began reading it the day it came out, are nearly through it by now, those that haven't hanged themselves.

Have you ever seen a photograph of Ayn Rand? For a woman who wants strong muscular men to drill her like a jackhammer, Ayn went to a lot of trouble to look like a Bloomsbury literary Lesbian. In fact, she looked rather like a young Rosa Klebb, only not as sexy.

Ayn died the day after John Belushi died, although I don't think she did so to cheer us up again.

[DemReadingDU]

75. The Geography of Job Loss

6/5/09 The Geography of Job Loss
fascinating animation showing the regional job losses over the past 5 years, covering the 100 largest metropolitan areas in the country


CLICK the play-button to start the map animation.
HOVER over a dot to see the city name and statistic.
http://www.ritholtz.com/blog/2009/06/the-geography-of-job-loss/

[DemReadingDU]

81. Mike Larson: Geithner Goes Begging in China; What It Means to You

6/5/09 Geithner Goes Begging in China; What It Means to You by Mike Larson

So this is what it’s come to: Our Treasury Secretary, Timothy Geithner, has to jet off to Beijing to beg for mercy from our biggest global creditor.

He has to sit by and be lectured in the ways of finance by Chinese officials.

He has to endure the laughter of Chinese students at Peking University, who openly scoffed at his reassurances that “Chinese financial assets are very safe.”

And he has to abandon plans to pressure China on its currency. The Obama administration had previously been arguing that the yuan was undervalued, artificially subsidizing Chinese manufacturers at the expense of U.S.-based firms.

The bottom line? The balance of world financial power is shifting and not in a good way for America. Worse, I see no evidence that we’re doing anything about it! Instead, we get a bunch of happy talk and spin, with little or no action.

Washington Happy Talk vs. Reality on the Ground in China

Before, during, and after Geithner’s China trip, the Washington spin machine was shifting into overdrive. I’ve already seen a few reports calling Geithner’s trip a success. Geithner himself has been making statements like the following:

“I’ve actually found a lot of confidence here in China, justifiable confidence, in the strength and resilience and dynamism of the American economy and I think a very sophisticated understanding … of the steps we’re taking and why they’re so important not just to the United States but to China and the rest of the world.”

Excuse me, but does anyone believe that for a second? I sure as heck don’t. And neither do the Chinese. The reality on the ground in China is much more skeptical and severe.

For example, Bloomberg recounted a conversation in which Geithner was lectured about U.S. profligacy:

Yu Yongding, a former central bank adviser who acted as the interviewer for The China Daily newspaper, told Geithner: “I worry about details. We will be watching you very carefully.”

A report from The Washington Post was even more blunt, warning that “Geithner’s remarks stand in sharp contrast to the commentary in China’s official propaganda papers.”

According to the Post …

* The China Daily said it will be “regrettable if underestimates and shuts his ears to voices from China’s civil society,” noting that there are worries that “Washington’s mushrooming deficit, generated by massive government borrowing to fuel its economic recovery plan … will undermine both the dollar and U.S. bonds.”

* The Global Times, which is affiliated with the Communist Party, said an online poll found that 87 percent of respondents believe China’s dollar-assets are unsafe. The paper concluded, “Ordinary Chinese people are discontent with the declining value of China’s huge foreign exchange reserves denominated in U.S. dollars.”

* And The Economic Information Daily, which is part of the official New China News Agency and affiliated with the State Council, in a headline demanded to know of Geithner: “How do you propose implementing fiscal discipline? How will you maintain the stability of the dollar after the crisis?”

more...
http://www.moneyandmarkets.com/geithner-goes-begging-in-china-what-it-means-to-you-2-34113

[DemReadingDU]

92. Reuters: Treasury bloodbath soaks top fund managers

6/5/09 Treasury bloodbath soaks top fund managers

By Jennifer Ablan - Analysis

NEW YORK (Reuters) - Investors have been blindsided by one financial catastrophe after another over the last 18 months, but throughout the tumult, the government bond market has been their friend.

Until now.

A brutal drop in long-dated Treasury prices has caught even the best money managers off guard -- in some cases wiping out as much as 60 percent of the gains they booked in last year's huge rally in U.S. Treasuries.

The Vanguard Group, Fidelity Investments, T. Rowe Price and Hoisington Investment Management have seen their government funds down anywhere between 10 percent and 30 percent, as record amounts of debt flood the market to pay for the swelling budget deficit.

What's stunning about the portfolio declines is the swift plunge in Treasury prices within a short period of time despite the Federal Reserve's buyback purchases intended to hold down interest rates. Benchmark 10-year Treasury yields have surged to levels not seen in more than six months, resulting in meaningful losses for many portfolios.

The 10-year T-note and 30-year Treasury bond are down 8.58 percent and 24 percent, respectively, in terms of price for the year to date.

"If I were clairvoyant and knew we were going to have a sell-off of this magnitude, I would've been all in cash, but I'm not," said Van Hoisington, whose flagship Wasatch-Hoisington U.S. Treasury Fund is down more than 20 percent.

To be fair, not all Treasury-oriented funds like Hoisington's represent an expression of a firm's macro view of economic growth or lackthereof. Some bond funds, such as the Vanguard Extended Duration Treasury Index Institutional, hold Treasuries for actuarial reasons.

SOME BULLS SMILE THROUGH THE PAIN

Even so, the losses are massive. Some of the rise in yields and slide in Treasury prices is due to investors' appetite for riskier fare like stocks, junk bonds and corporate debt, which have been performing well on signs the recession is easing.

Indeed, for much of 2008 and earlier this year, investors piled into U.S. government debt during the credit crisis, sending yields to historic lows and triggering talk of a bubble similar to that of the Nasdaq's Internet-led bubble, which expanded in the late 1990s and burst in March 2000.

But there also have been concerns about America's long-term financial health, which has set in motion a huge domino effect -- leading money managers such as Hoisington to stay bullish on Treasuries.

"We ain't seen nothing yet in terms of the gazillion amount of Treasuries coming to fund our stimulus programs," said Dan Fuss, vice chairman of Loomis Sayles, which oversees more than $107.7 billion in assets.

UNITED STATES' AAA VULNERABLE

On May 21, Moody's Investors Service said while it is comfortable with America's AAA debt rating, it is not guaranteed forever against the backdrop of its deteriorating fiscal position. That helped exacerbate market fears that the United States remains ever more vulnerable to lose its coveted triple-A rating with its need to borrow $2 trillion -- or 14 percent of the country's total economic output and more than twice the record of 6 percent set in 1983.

That also has set off a chain reaction, notably with the so-called "bond vigilantes." Veteran Wall Street strategist Ed Yardeni coined the term "bond vigilantes" to describe the huge appetite for yield of investors in the 1980s, who got burned in the '70s; these investors demanded higher yields to compensate for perceived risks of inflation and budget deficits.

The phenomenon seems premature to some investors in Treasuries.

"If zero growth is gonna result in inflation, it's a new economic paradigm as far as I'm concerned," Hoisington said.

His fund was up an astounding 37.77 percent in 2008.

"We do not have a forecast of runaway growth, nor does the Fed," added Brian Brennan, manager of the T. Rowe Price U.S. Treasury Long-Term bond fund, which is down nearly 11 percent. Conversely, his fund was up more than 23 percent last year.

The standout of the crowd, however, is Vanguard. Its Extended Duration fund, which is down over 33 percent so far this year, "is not an expression of our macro call," Ken Volpert, head of the Taxable Bond Group at The Vanguard Group, where he oversees about $200 billion in assets, told Reuters.

Volpert said the fund, which was up 55.52 percent in 2008, is primarily intended for pension plans and other institutional investors that want to closely match long-term liabilities with a portfolio of U.S. Treasury securities of similar long-term duration. He added that credit conditions have improved dramatically and confidence has come back into the markets and economy to feed the belief in recovery.

Even so, "somebody lost their shirt ... 33 percent is no small chunk of change," said Jeff Tjornehoj, research manager at Lipper Inc, a funds research firm owned by Thomson Reuters.

http://www.reuters.com/article/ousiv/idUSTRE55468F20090605

[DemReadingDU]

93. Vanguard merging Treasury Funds

6/5/09 Low yields push Vanguard to money-fund steps
Firm to merge pair of funds and partially close another


As money-market-fund yields remain stubbornly low, Vanguard Group said this week it's taking steps to keep returns positive.

The firm said it will merge two of its Treasury funds and drastically limit new deposits in a third fund.

Vanguard said the $6.7 billion Treasury Money Market Fund will merge into the cheaper $21.8 billion Admiral Treasury Money Market Fund in early August.

"By moving the assets to a lower-cost fund, we can better preserve yield," said Rebecca Cohen, a Vanguard spokeswoman, of the decision to merge the two Treasury funds.

The firm has also closed Federal Money Market Fund to new accounts and institutional money and slapped a $10,000 daily limit on existing retail accounts.

Treasury Money Market Fund's latest seven-day yield was 0.05%, after the fund's expense ratio of 0.28%. The Admiral fund's seven-day yield was 0.18%, and that fund charges 0.15%. The merged fund is to operate at the lower expense ratio.

Cohen said the two funds follow a "substantially similar" strategy.

The decision to partially close Federal Money Market Fund, which had a seven-day yield of 0.33%, is likewise an effort by Vanguard to keep the fund's yields positive.

"New cash must be invested in securities at current yields, which are historically low. This can dilute the fund's overall yield, to the detriment of current investors in the fund," said Cohen.
Staying low

Vanguard's moves come as the money-market-fund business faces up to months of negligible yields on its offerings because the Federal Reserve's target overnight lending rate among banks is between zero and 0.25%. Several fund firms have waived fees on some of their money-market funds to ensure investors don't lose money. See full story.

Vanguard, which offers its money-market funds at cost, opted to close its two Treasury funds to new money in January. As yields continued to slide, it saw the merger as the best option.

"We believe the moves we've taken should preserve the funds' yields for the foreseeable future," said Cohen.

But even if the moves keep yields positive, it's likely they'll stay low for a while.

"I think it'll be an extended period of time and it could easily be into next year," said David Glocke, manager of the two Treasury money-market funds.

Glocke said that until the economy stabilizes the Fed won't want to stop its stimulus efforts and raise its target rates. For now, banks aren't lending to consumers at levels needed for growth, he added.

"I think it might not be that banks don't want to lend, but that consumers may not have strong interest in adding to their debt balance, which is creating less demand," said Glocke. "If the Fed sees the same thing, may not happen until some time in 2010."

Cohen said Vanguard's board of trustees "will be closely monitoring the yield environment and take additional steps if warranted" but declined to speculate what those steps could be.

Despite the difficulties, Cohen said Vanguard remained committed to its money-market business. "We strongly believe that the money-market fund is a great product for investors, providing safety, liquidity and income," she said. "And we believe they will endure through this challenging yield environment."

http://www.marketwatch.com/story/as-yields-stay-low-vanguard-takes-money-fund-step?siteid=rss&rss=1