STOCK MARKET WATCH, Thursday June 25

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday June 25, 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 24, 2009

Dow... 8,299.86 -23.05 (-0.28%)
Nasdaq... 1,792.34 +27.42 (+1.55%)
S&P 500... 900.94 +5.84 (+0.65%)
Gold future... 934.40 +10.10 (+1.09%)
10-Yr Bond... 3.68 +0.06 (+1.63%)
30-Year Bond 4.43 +0.07 (+1.63%)

---

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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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Market Observation with a new guy

Commodity Trading Made Simple
BY CHRIS VERMUELEN

In the past commodity trading was only available to traders with large accounts, high risk tolerance and a good understanding of how the futures market works. During the past 7 years with commodities making incredible moves and gaining attention from the media, several exchange traded funds (ETF’s) have been created allowing everyone to take advantage of the commodity market.

....

Commodities should have a place in everyone’s portfolio in my opinion. And a simple way of doing that is through the use of etf’s. Below I provide some of the most popular commodity funds known today. I have provided my simple analysis to each fund so you can see how commodity trading is if you know what you are doing or have someone help you along the way.

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

---

He's trying to be helpful. No great revelations, though.

[Name removed]

2. Deleted message

Message removed by moderator. Click here to review the message board rules.

[ozymandius]

4. Good morning, tonismith, and thanks!

Welcome to DU and the Stock Market Watch.

:donut: :donut: :donut:

[tclambert]

15. You welcomed someone who was zapped by the moderators.

They haven't zapped any of my posts, yet, as far as I know. Guess I'll have to try harder.

[ozymandius]

20. That's too bad. Everyone deserves a fair chance to make friends.

However, I had not seen said poster elsewhere. I believe my response was to post #1 here at DU.

Edit: The post expressed an aesthetic enjoyment of today's cartoon.

[Hugin]

40. Boy, there's a rare sight in the SMW.

The main offence must've been elsewhere.

[Demeter]

43. Would They DO That?

If they tombstoned somebody, I guess.

[ozymandius]

3. Today's Reports

8:30 Initial Claims 06/20
Briefing.com 600K
Consensus 600K
Prior 608K

08:30 Q1 GDP - Final Q1
Briefing.com -5.7%
Consensus -5.7%
Prior -5.7%

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

[UpInArms]

37. Initial Claims @ 627,000 - last wk rev'd up 4k - 1st Quarter GDP rev'd to -5.5%

U.S. weekly jobless claims up 15,000 to 627,000
8:31am Today

U.S. GDP revised to 5.5% decline in first quarter
8:31am Today - By Rex Nutting

U.S. first-quarter GDP revised to -5.5% vs. -5.7%
8:30am Today

GDP revisions from lower imports, higher inventory
8:30am Today

U.S. 1Q final sales fall 3.3% annualized
8:30am Today

U.S. 1Q consumer spending rises 1.4% annualized
8:30am Today

U.S. 1Q business investment falls at record pace
8:30am Today

U.S. 1Q profits up 3.8%, most in 3 years
8:30am Today

U.S. 1Q imports fall at fastest pace in 62 years
8:30am Today

[ozymandius]

5. Oil hovers above $69 amid mixed crude demand signs

SINGAPORE – Oil prices hovered just above $69 a barrel Thursday in Asia amid mixed signals about crude demand from a weekly U.S. inventory report.

....

The Energy Department's Energy Information Administration reported Wednesday that U.S. oil supplies dropped more than expected last week, falling 3.8 million barrels, or 1.1 percent. However, gasoline in storage swelled 3.9 million barrels, which was more than expected, to 208.9 million barrels.

The U.S. central bank also struck a cautious tone in comments Wednesday.

....

In other Nymex trading, gasoline for July delivery rose 0.75 cent to $1.85 a gallon and heating oil gained 0.73 cent to $1.75. Natural gas for July delivery climbed to $3.77 per 1,000 cubic feet.

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

[tclambert]

22. Well, what with GM predicting oil will rise to $130/bbl,

and many predictions, including my own, that gas prices will rise again, I acquired a bicycle. Actually, a co-worker pulled one out of the trash and gave it to me. It's not entirely free, though. It has become a rehab project. The tires are so old and dried up they have cracks everywhere. The inner tubes probably need replacing, too. The chain needs lube. The brake pads may need replacing. Plus, I still have to get the related gear: helmet, gel seat cover, leg guard to protect from chain dirt, water bottle, tire pump, and a lock and cable.

The first thing I had to do was remove an old lock from it. My co-worker didn't have a key nor a bolt-cutter big enough. I don't have a bolt-cutter that big, either, but I do have a hacksaw. However, when I saw it, I realized I could get the lock loose by removing the handlebars. A little topological puzzle solved. Bikes have so few parts I can have fun taking it apart and fixing it. If I have any trouble, I can call my engineer son. He built solar cars, from scratch, sometimes using bicycle parts or motorcycle parts. He would consider an old mountain bike elementary.

[InkAddict]

33. Mornin' tclambert - I have a bicycle that's old but serviceable

yet I'm afraid to ride it for want of healthcare and no public option for at least another decade in sight. I'm the only one working here, big PT hours, and can't afford a broken bone. I'd have to dress up like the Pillsbury Doughgirl before I'd hop on for a spin to the park -

[tclambert]

51. Got the new tires and inner tubes on, and it rolls!

Eat that, Exxon Mobil.

[Demeter]

47. The Minute GM Predicted--Oil Dropped. $2.45/gallon today

[ozymandius]

6. Fed holds policy steady, sees recession easing

WASHINGTON (Reuters) – The Federal Reserve on Wednesday stuck to its huge program of buying government and mortgage debt, which is designed to keep borrowing costs low and boost recovery, and said it saw signs that the deep U.S. recession was easing.

The U.S. central bank kept interest rates near zero percent and signaled less concern on deflation, which is considered a threat to the economy because a pattern of falling prices causes consumers and businesses to delay purchases, dragging the economy down further.

....

The Fed said it decided to hold overnight interest rates in a zero to 0.25 percent range -- the level reached in December -- and repeated that rates would likely stay unusually low for some time.

But the Fed cautioned that the economy would remain weak for a time, and the Dow Jones industrial average fell on the news. Economists said the Fed's outlook means rates will be on hold until well into 2010.

....

With the benchmark interbank lending rate virtually at zero, the Fed has focused on driving down other borrowing costs by buying mortgage-related debt and U.S. government bonds.

http://news.yahoo.com/s/nm/20090624/bs_nm/us_usa_fed

[ozymandius]

9. World stocks slip after Fed cautions

LONDON (Reuters) – World stocks slipped on Thursday after the Federal Reserve cautioned that the U.S. economy would remain weak for a time, adding to concerns about the sustainability of a recent recovery.

Government bonds were under pressure as the Fed kept to its $300 billion Treasury debt buyback programme after a two-day meeting on Wednesday.

....

According to Thomson Reuters data, quarterly earnings are estimated to drop 34.5 percent for the S&P 500 index for the second quarter -- downgraded from 27 percent growth in July 2008 -- and fall by 21.4 percent in the third quarter.

http://news.yahoo.com/s/nm/20090625/bs_nm/us_markets_global_13

[ozymandius]

10. Buffett laments that U.S. economy has "no bounce"

NEW YORK (Reuters) – Warren Buffett said on Wednesday that the U.S. economy has "no bounce" and will take time to recover, but there is no risk of deflation to push it further into despair.

Speaking on CNBC television, the world's second-richest person also praised efforts by the Obama administration and Federal Reserve to jump-start economic activity.

He lamented that the slowdown has hurt his insurance and investment company Berkshire Hathaway Inc, which runs close to 80 businesses and in the January-to-March period had its first quarterly loss since 2001.

....

Asked whether the economy was still in a "shambles," as he had said in February, Buffett said: "I'm afraid that's true."

http://news.yahoo.com/s/nm/20090624/bs_nm/us_buffett

[tclambert]

29. Okay, got it. Shambles don't bounce.

[InkAddict]

36. Poor Rumplestilskin - Spinning wheel got to go round (broke)

http://www.youtube.com/watch?v=8T97f2kBzOQ

SUSTAINABILITY OF A RECOVERY - HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA

[ozymandius]

7. Bernanke to face hostile questioning on BofA deal

WASHINGTON – Federal Reserve Chairman Ben Bernanke likely will face hostile questions from a House committee investigating whether he and other government officials pressured Bank of America Corp. into a "shotgun wedding" with Merrill Lynch that cost taxpayers $20 billion.

The House Oversight and Government Reform Committee has scheduled a hearing Thursday as it probes whether federal officials urged Bank of America CEO Kenneth Lewis to keep quiet last fall about Merrill Lynch's financial problems and stick with the plan to combine the two financial powers.

Not divulging that information would have violated Lewis' fiduciary duty to the bank's shareholders.

....

Earlier this month, Lewis said his job was threatened after he expressed second thoughts about the merger. Lewis said Paulson and federal regulators made clear that if the Charlotte, N.C.-based bank reneged on its promise, that he and the bank's board members would be ousted.

http://news.yahoo.com/s/ap/20090625/ap_on_bi_ge/us_bernanke

[ozymandius]

8. Lawmaker accuses Fed of "cover-up" in BofA deal

WASHINGTON (Reuters) – The Federal Reserve sought to hide its involvement in Bank of America Corp's (BAC.N) acquisition of Merrill Lynch as Merrill's financial condition worsened, the top Republican on the House Oversight and Government Reform Committee said on Wednesday.

The Fed "engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies," Representative Darrell Issa said in a statement released to Reuters.

.....

The committee has obtained a number of emails and documents from the Fed about its behind-the-scenes role in the merger, which was quickly brokered late in 2008 amid turmoil in the U.S. banking sector, according to sources familiar with documents. The sources declined to be identified because they were not authorized to speak publicly on the matter.

The sources said documents showed the Fed tried to keep some information about the Bank of America deal secret from the Office of Comptroller of the Currency, the North Carolina-based bank's direct regulator, and from the Securities and Exchange Commission. The bank is also regulated by the Fed.

http://news.yahoo.com/s/nm/20090625/bs_nm/us_bankofamerica_bernanke_4

[Demeter]

55. "Stonewall" Benanke

This was a GOP fishing expedition, I suspect.

[ozymandius]

11. Treasury: Program to buy toxic assets from banks out soon (son of TARP)

WASHINGTON (MarketWatch) -- A public-private government program to take $1 trillion in so-called toxic mortgages and other assets off bank balance sheets has not been abandoned and should be unveiled shortly, a key bank bailout fund overseer said Wednesday.

"We would like to see banks dispose of more of those assets so they can provide new sources of lending to the economy," said Herbert Allison, the Treasury's point man for the $700 billion Troubled Asset Relief Fund, in testimony to the Congressional Oversight Panel. "When we announce the program we will make disclosures about the rates we are charging with respect to the structure of these transactions about how they will be done in a way that will stabilize the financial system and protect interest of taxpayers."

The Treasury has been considering the program in one form or another since October, but after government officials did not release the names of key investors for the program in May, regulatory observers speculated that the program was dead.

....

Allison, who testified in his first congressional hearing since being confirmed to the position by Congress, also said the Treasury will soon provide details about how another program that seeks to jump start the market for consumer lending will be expanded to include commercial real estate. The program, known as the Term Asset-Backed Lending Program, launched in November.

....

Pressed by Congressional Oversight Panel Chairwoman Elizabeth Warren, Allison said he expects the new disclosures to be made before July 5, the date the government commission is required to release its monthly report on the TARP program.

http://www.marketwatch.com/story/allison-us-financial-system-remains-vulnerable-2009624132100

---

This rotten scheme smells all the way to Mars. Three things stand out: (1) They, at Treasury, want to re-inflate the CRE bubble and, by extension, the housing bubble; (2)This is another case of Geithner's idea that these bad assets are not worthless, just misunderstood and; (3) It's all about the banks. Nothing else. Lending is supposed to save the economy when unemployment rates are outpacing records set twenty five years ago.

[ozymandius]

12. Buffett Says U.S. May Need a Second Stimulus Package

June 24 (Bloomberg) -- Billionaire investor Warren Buffett said the U.S. may need a second economic stimulus package as unemployment is poised to continue rising.

“It looks like we’re going to need more medicine, not less,” Buffett said today in a Bloomberg Television interview. “We’re going to have more unemployment. The recovery really hasn’t got going.” Buffett is chairman and chief executive officer of Omaha, Nebraska-based Berkshire Hathaway Inc.

President Barack Obama signed a $787 billion stimulus bill in February, which included tax cuts and spending on infrastructure projects intended to save or create 3.5 million jobs. The Federal Reserve, under Chairman Ben S. Bernanke, has doubled its balance sheet to help thaw credit markets. In the first quarter, the U.S. gross domestic product plunged, and Berkshire reported its first loss since 2001.

....

The economy has lost about 6 million jobs since the recession began in December 2007. The U.S. unemployment rate jumped to 9.4 percent in May, the highest level in more than 25 years, and Obama predicted yesterday the jobless figure will exceed 10 percent by year-end.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aHaggIeA0Zjk

[tclambert]

25. I agree. Make jobs, not bonuses for bankers.

I've said all along, they don't even have to be really productive jobs. Planting flowers by the roadside would do. A better program would fix the GD roads! In Michigan, local authorities plan to convert some paved roads back to gravel. If government hired more and then more people to fix and improve the infrastructure, we'd get a double benefit. One, more people with jobs. Two, better infrastructure makes commerce easier and cheaper. Both of those create ripple effects far beyond the immediate benefits, as well.

[tclambert]

35. Make jobs, not war!

That's more like it.

[UpInArms]

13. dollar watch

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

Last trade 80.765 Change +0.228 (+0.29%)

US Dollar Gains on Fed-Induced Flight-to-Safety - Watch for Q1 GDP Revisions on Thursday

http://www.dailyfx.com/story/dailyfx_reports/daily_fundamentals/US_Dollar_Gains_on_Fed_Induced_1245878600095.html

The US dollar started out the day on a rather strong note, gaining through the European and US trading sessions, as data showed that US durable goods orders surprisingly jumped 1.8 percent in May, as forecasts had called for a slight contraction. This marked the second straight increase, and better yet, non-defense capital goods orders excluding aircraft rose 4.8 percent, signaling an improvement in business investment. Ultimately, the news adds to signs that the worst may over for the US recession.

Meanwhile, US dollar strength was only exacerbated by the 14:15 ET release of the Federal Open Market Committee’s (FOMC) latest policy statement. The FOMC left the fed funds target range at 0.0 percent - 0.25 percent, as expected, and indicated that this should remain the case for “an extended period.” Furthermore, the statement once again said that the Committee's policy focus is to support the functioning of financial markets via quantitative easing (QE) and other measures that are likely to keep the size of the Federal Reserve's balance sheet at a high level. The fact that we saw risk aversion start to take a hold of the markets at this point, as evidenced by the decline in US stock markets and rallies in “safe haven” currencies like the US dollar and Japanese yen, suggests that traders were anticipating either (or both) upgraded growth outlooks or an expansion of their QE program.

Looking ahead to Thursday, the third and final round of US Q1 GDP estimates are due to hit the wires, and the results could be market-moving if they miss expectations. At the time of writing, a Bloomberg News poll of economists reflected consensus forecasts for GDP is forecasted to go unrevised at -5.7 percent, which marks an improvement when compared to the Q4 2008 result of -6.3 percent. However, if Q1 GDP is revised higher, the news would likely provide a huge boost to risk appetite as it make the US economy appear to be in a better position to stage a recovery later in the year. On the other hand, downward revisions would have the potential to take FX carry trades and equities lower.

...more...

Fed Keeps Rates Unchanged But Dollar Rallies

http://www.dailyfx.com/story/topheadline/Fed_Keeps_Rates_Unchanged_1245864636817.html

The Federal Reserve kept its benchmark interest rate unchanged at 0.25%-0%, a record low. In recent weeks, the poisonous combination of quantitative easing with expectations for a record budget-deficit has been damaging the safe-haven status of the US dollar. However, judging by the sharp rally in USD/JPY, the FOMC statement was more bullish than had been anticipated.

Official Statement from the Federal Open Market Committee

Information received since the Federal Open Market Committee met in April suggests that the pace of economic contraction is slowing. Conditions in financial markets have generally improved in recent months. Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit. Businesses are cutting back on fixed investment and staffing but appear to be making progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee continues to anticipate that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will contribute to a gradual resumption of sustainable economic growth in a context of price stability.

The prices of energy and other commodities have risen of late. However, substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is monitoring the size and composition of its balance sheet and will make adjustments to its credit and liquidity programs as warranted.

Forecast for US dollar

Several months of quantitative easing combined with expectations of a record budget-deficit have been pushing the US dollar exchange further down against other major currencies. For instance, the EUR/USD rallied nearly 1800 pips over the last 4 months, trading from a low of 1.2544 in March to as high as 1.4337 in June. Moreover, with carry-trade still unwinding the USD/JPY fell more than 500 pips over the last 30 days. Indeed, because the United States runs both a current-account and a budget-deficit, there is no better way to express concern about the long term implications of conducting quantitative easing than by selling dollars. Having said that, in the short-term we think the US dollar will remain under heavy selling pressure until we have a clear exit strategy for quantitative easing by the US Federal Reserve. However, a recent change in 2-year interest rate differentials in favor of rate hikes by the Federal Reserve is likely to support the US dollar in the long-term.

...more...

[UpInArms]

14. Jim Rogers says has no short positions, selling dollars

http://www.reuters.com/article/bondsNews/idUSSP50971720090625

SINGAPORE, June 25 (Reuters) - Investor Jim Rogers said on Thursday that he sees prolonged economic problems and while he did not see much worth buying, he is not shorting any assets either.

He repeated a previous comment that he is selling his U.S. dollars and that commodities were the best investment bet.

"I have no shorts for one of the first times in my life," Rogers, a co-founder with George Soros of the Quantum Fund, told Reuters TV in Singapore. "On the other hand I don't see much to buy."

He said huge borrowing by governments, particularly in the United States and Britain, would hurt their currencies and lead to future problems, though he picked the Canadian dollar CAD= as one of the "soundest" currencies. "I've got out of my pounds. I will be getting out of my (U.S.) dollars soon," he said, repeating his view that commodities were the best place to be with metals having gained more than stocks this year and long-term potential for soft commodities.

"I'd rather be a farmer than a stockbroker for the next couple of years," he said. "No-one you went to school with became a farmer... so we have a shortage of farmers."

...more...

[InkAddict]

38. More farmers heh Jim Rogers...

Let me know how you plan to profit from your bumper zuke crop and the two container tomatos you planted in your skybox tower come
August PS w/Hint: I gave my excess lettuce away to neighbors - it makes for goodwill.

[tclambert]

52. Got 30+ tomatoes growing on my grape tomato bush.

Still green, but almost the right size. Leaf lettuce just about ready to donate a few leaves to our next dinner of cheeseburgers. Bonnie Best tomato plants just getting ready to flower. Green peppers getting ready to flower. Had to dose 'em with Ecosense insecticide to kill aphids. (How do aphids find plants? They are so little and slow moving.)

Now that medical marijuana has been legalized, my neighbor is considering going back to growing Columbian Gold. He thinks he needs a prescription to allow it. It could replace some of his regular meds. He doesn't know where to get seeds, though. Don't think they carry it at the local nursery.


What's the latest report on the Topsy-Turvey, Doc?

[UpInArms]

16. Here's some real BS: AIG to give NY Fed stake in units to cut debt

http://www.reuters.com/article/bondsNews/idUSBNG1027020090625

June 25 (Reuters) - American International Group (AIG.N) said it will give the New York Fed preferred stakes in its American Life Insurance Co (ALICO) unit and its Hong Kong-based life insurance group American International Assurance Co (AIA), in a deal to reduce its debt load by $25 billion.

The insurer said as part of the agreement with the Federal Reserve Bank of New York (FRBNY), AIG will contribute the equity of each of AIA and ALICO to separate special purpose vehicles (SPVs) in exchange for preferred and common interests in the SPVs.

The Federal Reserve will have interests of $16 billion in AIA and $9 billion in ALICO, which generates more than half its revenue from Japan.

The agreement will position both of the prized units for possible initial public offerings, it said.

"The agreements further the goals of enabling AIG to fully repay the assistance that it has received from U.S. taxpayers and advancing the company's global restructuring process," FRBNY said in a separate statement.

...more...

[UpInArms]

19. AIG gets Fed clearance for international life IPOs

http://www.marketwatch.com/story/aig-gets-fed-ok-for-international-life-ipos

LONDON (MarketWatch) -- American International Group on Thursday said it's received approval from the Federal Reserve Bank of New York to proceed with initial public offerings of two of its international divisions, a deal that will see taxpayers recoup $25 billion of the money poured into the troubled insurer.

Depending on market conditions, AIG (AIG 1.44, +0.02, +1.41%) said it will prepare
American International Assurance Co. and American Life Insurance Co. for IPOs.

It will place both into special-purpose vehicles in which the U.S. central bank will receive preferred interests of $16 billion in the case of AIA and $9 billion for Alico.

New York-based AIG will benefit if the IPOs yield more than the preferred interests.

"The agreements further the goals of enabling AIG to fully repay the assistance that it has received from U.S. taxpayers and advancing the company's global restructuring process," the New York Fed said in a statement.

As AIG's Asian division, AIA covers 13 markets, including Australia, Hong Kong, India and South Korea. Alico operates in more than 55 countries, including Japan, the U.K. and Germany.

In mid-May, AIG had announced plans to seek a listing of AIA subject to regulatory approval.

Late Wednesday, AIG announced a plan to sell its Mexican consumer finance operations for an undisclosed price.

...more...

[ozymandius]

23. Although I am too lazy to look it up -

I believe these entities are part of the profitable sectors of AIG. But I question the sagacity of issuing stock to repay debt. Actually, I question the wisdom in buying stocks from just such an entity. We have seen the situation before in which an IPO launches with great acclaim, raking in huge capital inflows before it tanks. It really is the easiest was to make a buck since stocks always have the "greater fool" theory as an underpinning.

[Festivito]

17. Debt: 06/23/2009 11,407,973,761,151.02 (UP 7,317,193,198.42) (Debt up a little, mostly FICA.)

(Debt up just over a third of a billion, that's about a buck and a half per American using the $4 rule below. FICA does its own thing.)

= Held by the Public + Intragovernmental(FICA)
= 7,127,688,946,496.39 + 4,280,284,814,654.63
UP 354,103,704.29 + UP 6,963,089,494.13

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: $9.78, ABOUT TEN BUCKS for a 1B$ 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 306,717,542 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 $37,193.74.
A family of three owes $111,581.23. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 32 days.
The average for the last 21 reports is 5,061,801,634.39.
The average for the last 30 days would be 3,543,261,144.07.
The average for the last 32 days would be 3,321,807,322.57.
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$/day.
There were 105 reports in 154 days of Obama's part of FY2009 averaging -0.35B$ per report, -0.18B$/day so far.
There were 180 reports in 266 days of FY2009 averaging 7.68B$ per report, 5.20B$/day.

PROJECTION:
There are 1,307 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 18.2T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
06/23/2009 11,407,973,761,151.02 BHO (UP 781,096,712,237.94 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: 1,383,248,864,238.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
06/03/2009 -000,003,266,733.82 -----
06/04/2009 +011,755,789,483.75 ------------**********
06/05/2009 -000,226,149,345.97 ---
06/08/2009 +000,015,040,049.19 ------------******* Mon
06/09/2009 +000,025,670,087.48 ------------*******
06/10/2009 +000,124,232,779.18 ------------********
06/11/2009 +000,484,710,305.16 ------------********
06/12/2009 +000,342,814,514.03 ------------********
06/15/2009 +022,279,783,785.91 ------------********** Mon
06/16/2009 +000,300,303,919.12 ------------********
06/17/2009 -000,017,732,893.60 ----
06/18/2009 -005,859,665,194.24 --
06/19/2009 -000,316,361,675.40 ---
06/22/2009 +000,024,707,752.58 ------------******* Mon
06/23/2009 +000,354,103,704.29 ------------********

29,283,980,537.66 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,743,341,957,891.95 in last 278 days.
That's 1,743B$ in 278 days.
More than any year ever, including last year, and it's 171% of that highest year ever only in 278 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 278 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=3936562&mesg_id=3936678

[Festivito]

58. Debt: 06/24/2009 11,365,652,939,856.33 (DOWN 42,320,821,294.69) (Debt down a lot.)

(Down an awful lot for one day's report. But I like it.)

= Held by the Public + Intragovernmental(FICA)
= 7,092,956,714,512.70 + 4,272,696,225,343.63
DOWN 34,732,231,983.69 + DOWN 7,588,589,311.00

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: $9.78, ABOUT TEN BUCKS for a 1B$ 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 306,724,742 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 $37,054.89.
A family of three owes $111,164.68. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 33 days.
The average for the last 22 reports is 2,908,046,046.70.
The average for the last 30 days would be 2,132,567,100.91.
The average for the last 33 days would be 1,938,697,364.47.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 106 reports in 155 days of Obama's part of FY2009 averaging -0.62B$ per report, -0.36B$/day so far.
There were 181 reports in 267 days of FY2009 averaging 7.41B$ per report, 5.02B$/day.

PROJECTION:
There are 1,306 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 17.9T$.
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)
06/24/2009 11,365,652,939,856.33 BHO (UP 738,775,890,943.25 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: 1,340,928,042,943.90 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
06/04/2009 +011,755,789,483.75 ------------**********
06/05/2009 -000,226,149,345.97 ---
06/08/2009 +000,015,040,049.19 ------------******* Mon
06/09/2009 +000,025,670,087.48 ------------*******
06/10/2009 +000,124,232,779.18 ------------********
06/11/2009 +000,484,710,305.16 ------------********
06/12/2009 +000,342,814,514.03 ------------********
06/15/2009 +022,279,783,785.91 ------------********** Mon
06/16/2009 +000,300,303,919.12 ------------********
06/17/2009 -000,017,732,893.60 ----
06/18/2009 -005,859,665,194.24 --
06/19/2009 -000,316,361,675.40 ---
06/22/2009 +000,024,707,752.58 ------------******* Mon
06/23/2009 +000,354,103,704.29 ------------********
06/24/2009 -034,732,231,983.69 -

-5,444,984,712.21 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,701,021,136,597.26 in last 279 days.
That's 1,701B$ in 279 days.
More than any year ever, including last year, and it's 167% of that highest year ever only in 279 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 279 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=3938446&mesg_id=3938488

[ozymandius]

18. Banks Rescue Credit Card Trusts, Yet Keep Them Off Balance Sheet (son of Enron)

from Naked Capitalism

America as banana republic is alive and well. Tonight's version is that anything that helps banks is permitted, official rules to the contrary.

Banks enjoyed lots of fun and profit from setting up various off balance sheet vehicles that are now coming a cropper. We saw the preview of this movie with structured investment vehicles, off balance sheet entities typically sponsored banks that borrowed heavily, usually 14 to one, and invested in medium term asset backed paper. When subprime worries got acute and the market for asset backed commercial paper dried up, the short-term funding for the SIVs could not be rolled, and the vehicles had to resort to credit lines to keep from liqidating the holdings. The issue in plain sight was that the investors in the SIVs made it clear that the banks were not going to walk from these entities without consequences.

I do not understand how these entities can be considered to be off balance sheet once the sponsor stepped in. Yes, the test is whether the sponsor is "obligated" to provide support. While from a contractual standpoint, they may not have been, but no one wanted that tested in court (if various winks and nods were found to have been commitments, that might have forced consolidation).

We have the same issue in the fore with credit card trusts. This would seem to be a more clear-cut case than SIVs, since rating agencies 'fess up that their grades presume that banks will intervene in the event of a shortfall. As Joseph Mason and Eric Higgins wrote:

On Monday, May 11, 2009, Advanta Corp. announced that their credit-card securitization trust would go into early amortization and that they will shut down all of the accounts in the trust. What the casual observer (and most regulators) missed is that this announcement is also endemic of the problems at the heart of securitization: the “true-sale” classification from which securitizations obtain their off-balance sheet treatment.

A company like Advanta issues credit-cards through its banking subsidiary (Advanta Bank). These credit card receivables are then sold into a trust (Advanta Business Card Master Trust). The trust then sells the cash flows from those receivables to investors. This trust is created as a truly-sold bankruptcy remote entity from Advanta Bank and Advanta Corp., allowing Advanta to treat the sale of credit-card receivables as off-balance sheet for regulatory and accounting purposes. Technically, Advanta Corp. has no liability for the assets that are sold into the trust and must not provide any recourse to the assets....

The problem with the arrangement is that it has always been a complete fiction...

How can Advanta Corp. prevent early amortization without violating “true-sale” accounting? The truth is that they can’t. Providing recourse has historically been taken as implying that the receivables are assets of Advanta Corp. and should appear on their balance sheet...

Ozy here: The Financial Times has reported that Citigroup, Bank of America, JPMorgan Chase and American Express have also established shell operations to sell credit card debt as securities to investors in a type of ponzi scheme. The scheme involves these banks protecting original bondholders with bond sales among new investors.

As for Advanta: you might remember they are a credit card issuer whose primary business is businesses. Facing 20% losses (described as "uncollectable") - Advanta has shut off all lending.

And finally, a question: How much attention are regulators paying to this scheme? Nada, maybe?

[UpInArms]

24. How much attention are regulators paying to this scheme?

Oh, Ozy! You're such a card!



Regulators????? You mean to say that we even have a single regulator???



thanks for the laugh, my friend :)

[ozymandius]

27. You're welcome. The Federal Reserve Bank of New York comes to mind.

Some fucking clown Geithner did say he's "never been a regulator" when he was the head of the NY Fed. This is despite the fact that regulation was a core responsibility at that job.

I often feel that my allowances for gallows humor is stretched to insane extents when observing this kind of behavior.

[tclambert]

32. Regulators? Weren't those the guys with red leggings in "The Outlaw Josey Wales?"

maybe I'm confusing them with certain historical groups:

There were vigilantes in Illinois called Regulators:

"The Banditti of the Prairie or the Prairie Bandits, in the U.S. state of Illinois, were a group of loose-knit, rogue outlaws during the mid-19th century.<1> Though bands of roving criminals were common in many parts of Illinois, the counties of Lee, DeKalb, Ogle, and Winnebago were especially affected by them.<2> By 1841 the pattern of horse theft, murder, and robbery associated with the Banditti had come to a head in Ogle County. As the crimes continued, local citizens formed bands of vigilantes known as Regulators. The clash between the Banditti and the Regulators in Ogle County resulted in a lynching and decreased Banditti activity within the county." - http://en.wikipedia.org/wiki/Banditti_of_the_Prairie

_________________________________

Then there were the Lincoln County Regulators from the Lincoln County War in New Mexico. One of the Regulators was Billy the Kid.

http://en.wikipedia.org/wiki/Lincoln_County_Regulators

(Don't get any ideas, Demeter.)

[InkAddict]

39. Why am I hearing "spaghetti Western" theme music

earworms waking up ala Magnificent Seven and Good, Bad, and Ugly? LOL

[ozymandius]

50. I'll take issue with associating "Magnificent Seven" with Spaghetti Westerns.

Ennio Morricone was great. But he was quite a bit different from Elmer Bernstein. The Magnificent Seven stands as a hallmark of the "beginning of the end" of great American westerns. Spaghetti Westerns were years away from the M7.

[happyslug]

42. The original "Regulators" were form Colonial North Carolina

The term survived for almost 150 years afterward in areas where there was no effective law enforcement (Through almost unheard of in areas of non-Southern Settlements, i.e. if the area was settled by New Englanders, or people from the "Middle Colonies"(i.e. New York, Pennsylvania and New Jersey) law came with the settlers and thus no need for "Regulators", in the South they always under paid for community services (Including the Courts in addition to welfare and roads) and thus the people themselves had to form they own "law enforcement" and generally followed the pattern of the North Carolina Regulators.

http://en.wikipedia.org/wiki/Regulator_movement

http://www.google.com/#q=north+carolina+regulators&hl=en&tbs=tl:1&tbo=1&ei=VnlDSs3dF9-ptgeh3IikAQ&sa=X&oi=timeline_result&ct=title&resnum=12&fp=leBsIIJAIN0

[Demeter]

44. Who? Me?

I've already got the patent on FRSP. I don't need any more ideas. That one should keep me in croissants for life, and my kids, too!

[ozymandius]

26. US credit card chargeoffs break new record - Moody's

NEW YORK, June 24 (Reuters) - The U.S. monthly credit card chargeoff rate surpassed 10 percent and hit a sixth straight record high in May, Moody's Investors Services said on Wednesday, as unemployment grew to a 26-year high.

The chargeoff rate index -- which measures credit card loans the banks do not expect to be repaid -- rose to 10.62 percent in May from 9.97 percent in April.

"We expect the chargeoff rate index to continue to rise in the coming months but at a slower pace, as it peaks at around 12 percent in the second quarter of 2010," Moody's senior vice president William Black said in a statement.

The Moody's index also showed delinquencies -- monthly payments more than 30 days late -- fell to 5.97 percent in May from 6.34 percent in April.

However, the agency said it was due to a seasonal trend, as consumers used tax refunds to pay back debts, and estimated delinquencies will resume their upward trend.

http://www.reuters.com/article/rbssFinancialServicesAndRealEstateNews/idUSN2415584020090624

[UpInArms]

21. Silicon Valley silence on China scandal deafening

http://www.marketwatch.com/story/silicon-valley-silence-on-china-scandal-deafening

SAN FRANCISCO (MarketWatch) -- The virtual back-patting in Silicon Valley about the use of Twitter, YouTube, and Facebook to help protesters fight for freedom in Iran lies in stark contrast this week to the deafening silence coming from tech companies about the latest outrage from China.

Personal computer makers such as Dell Inc. (DELL 13.28, +0.30, +2.31%) , Hewlett-
Packard Co. (HPQ 37.22, -0.14, -0.37%) , Apple Inc. (AAPL 137.10, +0.88, +0.65%) and Lenovo have said nothing public of any substance about China's requirement for them to install Web-censoring software on all new PCs sold in the country, despite the fact that the deadline is July 1.

And Google Inc. (GOOG 409.29, +3.61, +0.89%) has completely rolled over on China's
recent demands for it to reduce the level of pornography that is searchable on its engines. It's an admirable request, until you realize that homegrown Chinese search engine Baidu.com is getting a free pass on porn in the meantime, and that the rule may simply be designed to punish Google.

It seems that once again, when it's about money -- and China -- ideals take a back seat.

Hey, business is a tough game and if everybody kowtowed to concepts like freedom, environmental responsibility, and generally "doing good," as Google claims, we'd have a world without oil producers, cigarette makers and gun companies. Imagine that.

But profit is profit. No tech company worth its executive options wants to give up a market opportunity like China, with 1 billion potential customers.

Still, the reticence coming from the tech companies about the so-called Green Dam requirement is particularly damning. It is a massive escalation of China's attempts to broaden its campaign of censorship and intimidation against its people regarding all businesses and countries with which it does business. Indeed, if they say no, the government has a convenient excuse to require its populace to just buy Chinese computers and software.

...more...

[tclambert]

28. Here's an interesting news item from the Daly Mail:

Pensioners battered a financial adviser with Zimmer frames (walkers) before kidnapping and torturing him for losing £2million of their savings. (~ $3.25 million) James Amburn, 56, was ambushed outside his home in Speyer, western Germany, bound with masking tape and bundled into a car boot.

. . .

He was bundled into the boot of a silver Audi saloon and driven 300 miles to the home of Roland K on the shores of Lake Chiemsee in Bavaria. As the financial advisor, who runs investment firm Digitalglobalnet, was bundled into the cellar another couple, retired doctors Gerhard and Iris F, aged 63 and 66, arrived to assist his kidnappers.

Mr Amburn said: "I had known these people for 25 years. I had no reason to be afraid. But as I went into my home I was jumped from the rear and struck. They bound me with masking tape until I looked like a mummy. It took them quite a while because they ran out of breath. When they loaded me into the car I thought I was a dead man."

. . .

Forty armed officers rescued Mr Amburn who was naked except for his underwear.

A physician had to be on hand to help his captors into police vans because of their various infirmities.


http://www.dailymail.co.uk/news/worldnews/article-1194891/Pensioners-kidnap-financial-adviser-lost-2m-batter-Zimmer-frames.html

______________________________________

I especially like the parts where the elderly abductors beat him with walkers and ran out of breath while abducting him.

But let's make it clear that I do not condone nor recommend people abduct and torture their financial advisers. Nor Wall Street bankers. Well, let me think about that last one. I'll have to get back to you.

[UpInArms]

30. here's more:

'I was led into the cellar,' recalled Mr Amburn, 'And I saw a folding bed and a WC reserved for me. They immediately went on about their money.

'I told them what I had told them before, that due to market conditions, unfortunately it was gone.

'I was struck. Again and again they threatened to kill me. The fear of death was indescribable. I never thought I would make it out alive.

'I tried to buy time, to ease the situation, but I didn’t know if night was day or day night.

'I told them that if I sold certain securities in Switzerland they could get their money and for this I had to send a fax to a bank in that country so funds could be transferred.'

<snip>

Chief public prosecutor Volker Ziegler said: 'They were angry because they invested money in properties in Florida and he lost it all.

'This was black money - they hadn’t declared it to the revenue authorities in Germany.'

[ozymandius]

31. OMG! It sounds like John Cleese wrote this.

http://www.youtube.com/watch?v=prM9gIkozh4

[tclambert]

34. "Senile delinquents!"

[Demeter]

46. That Was a Treasure--Thanks Ozy!

I was able to smile through my tooth pain. Actually, it's the temporary crown--ill-fitting and sharp....

[Hugin]

41. Haha! Story of the Quarter!

:rofl:

"A physician had to be on hand to help his captors into police vans because of their various infirmities." <-- That's why we here on the SMW appreciate AnneD so much. :D

[Demeter]

45. I Think Goldman Sachs Alumni and Employees Should Be Given an Exception, Though

After all, they consider themselves all to be "exceptional".

[DemReadingDU]

48. Bill Bonner: Politics is About What You Can Get Away With

6/25/09 Politics is About What You Can Get Away With by Bill Bonner

"Politics is about what works," someone once said. Perhaps it was Hillary Clinton. Someone said it...someone who is an imbecile.

Politics is not about what works, it's about what you can get away with. And what you can get away with is often exactly what doesn't work at all.

Our beat is money, here at The Daily Reckoning. We specialize in fraud and folderol. We leave the homicide beat to someone else.

What the United States is getting away with, from a financial point of view, in addition to counterfeiting, is grand larceny on a Super-Madoff scale. It is borrowing trillions of dollars even though it has no way to honestly pay back the money.

Still, so eager are the lenders to part with their money that the yield on the 10-year T-note fell yesterday to 3.64%. The more the feds borrow, apparently, the more lenders are willing to lend.

We're in the third and fatal stage of a great country - the political stage. In this stage, money and power migrate from the financial community to the political community. The politicians get away with taking trillions out of the productive economy and spending them on their pet projects and private corruptions.

Warren Buffett described the America of the bubble years as "Squanderville." Private citizens were living beyond their means, he pointed out. But he hadn't seen nothin'. Now, government does the squandering. The politicians are spending trillions they don't have on projects nobody was willing to pay for even when they had some money in their pockets.

What the government can get away with now - under cover of a financial crisis - is a big grab for money and power. It 'works' in the sense the feds are able to get away with it. But it will prove fatal to the dollar...and to the US economy.
.
.
There are a number of sit-down restaurant chains that cater to the middle class - Applebee's...Chili's...Ruby Tuesday and a few others. They expanded greatly during the '90s and '00s in order to meet the desires of the big spending masses. But now that the masses aren't so free and easy with their money, The New York Times reports that they are in desperate competition for remaining diners. This competition is manifesting itself as price deflation.

Applebee's offers dinner for two for only $20. Chili's advertises entrees for just $7. Ruby Tuesday's is going for a 2-for-1 deal. Buy one meal, get one free. All of them are making heavy use of discount coupons.
.
.
more...
http://www.dailyreckoning.com.au/politics-is-about-what-you-can-get-away-with/2009/06/25/

[DemReadingDU]

49. Charles Hugh Smith: More on Devolution

More on Devolution (June 25, 2009)
Charles Hugh Smith

The recent entry on devolution ( Devolution: 20 Predictions) sparked substantive reader commentaries. Astute reader Monnie M. noted that the global supply chains on which we depend are very fragile, and thus a "Black Swan event" which triggers a systemic collapse is not just possible but likely.

I agree that any number of breakdowns could trigger a domino effect, or even a positive feedback (runaway self-reinforcing loop) situation in which each breakdown of a subsystem reinforced the breakdown of a related subsystem.

For example, a major disruption in oil supplies triggers sharp increases in food and food shortages, which add to the social disorder triggered by the oil shortage, etc.

On the other hand, as I have noted here before in my Survival+ series, the system also has negative feedback loops which act to restabilize the system. This interplay of reinforcing and counteracting feedbacks is why I see devolution as not just likely but a mechanism which is already in play. To use another analogy, it is akin to "death by a thousand cuts."

Devolution can also be seen as positive in the sense it is an evolution of an unsustainable system. After mulling over readers' feedback, I think what devolution means to me is a slide down the complexity scale: the piecemeal dissolution or erosion of highly complex systems to simpler forms.

The reason this is painful is that all the people who are feeding at the trough of the complex status quo (think of the 16% of the U.S. economy devoted to sick-care, oops, I mean "healthcare") will resist any decline in their share of the national income with every fiber of their beings.

Thus the system becomes ever more brittle and vulnerable as gradual adaptation is rejected in favor of holding the status quo together with duct tape, accounting trickery (see "California legislature borrows $10 billion from next year, claims to have balanced the budget") and more loans. Having rejected adaptation to resolve the overly complex, financially unsustainable status quo, those feeding at the trough guarantee its devolution: each system breaks down in piecemeal fashion, in effect falling down the stairs of complexity in jarring fashion until it reaches a sustainable level.

We cannot predict the exact timing of this descent, but we can safely predict the bottom level of sustainability is far below current levels. Thus auto/truck sales reached 17 million vehicles a year in the U.S. in the bubble boom times. and now they've fallen down the staircase to 9 million. Sustainability might be 6 million units or even less.

Those feeding at the trough of each industry/State fiefdom will find the reduction in complexity and funding painful, but "unsustainable" means just that. Change of some sort cannot be denied, and so the choice is adaptation, devolution or collapse.


click to read reader comments...
http://www.oftwominds.com/blogjune09/devolution-more06-09.html


See previous posting: Devolution - 20 Predictions
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3936562&mesg_id=3936594

[Hugin]

53. Same ol' Same ol'... Horrible employment news, Market Joygasm. (eom)

[DemReadingDU]

54. I keep wondering how high the market will be manipulated

before 'they' let it crash. How much longer, a few weeks, months, next year?

[Demeter]

56. I Don't Think they Want It To Crash

But they don't want it to be free and fair and stable, either.

The "Market" is their playground, and the Jets don't wanna let anybody in. Sooner or later, somebody will drop a few of those spinning plates, and it will be "Good-bye, Wall Street".

[DemReadingDU]

57. It's become a very delicate balancing act

and also appears to me that at some point, they will not be able to keep all those plates spinning. But at the same time, they want the market to go higher to get out their gains, before one of those plates drops.