STOCK MARKET WATCH, Wednesday February 17

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday February 17, 2010

Bush Administration Officials Convicted = 2
Name(s): David Safavian, James Fondren

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 11

AT THE CLOSING BELL ON February 16, 2010

Dow... 10,268.81 +169.67 (+1.68%)
Nasdaq... 2,214.19 +30.66 (+1.40%)
S&P 500... 1,094.87 +19.36 (+1.80%)
Gold future... 1,120 +30.00 (+2.75%)
10-Yr Bond... 3.66 -0.03 (-0.87%)
30-Year Bond 4.63 -0.02 (-0.37%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie, Silver and US$

---

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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. Today's Reports

08:30 Housing Starts Jan
Briefing.com 535K
Consensus 580K
Prior 557K

08:30 Building Permits Jan
Briefing.com 590K
Consensus 620K
Prior 653K

08:30 Export Prices ex-ag. Jan
Briefing.com NA
Consensus NA
Prior 0.5%

08:30 Import Prices ex-oil Jan
Briefing.com NA
Consensus NA
Prior 0.4%

09:15 Industrial Production Jan
Briefing.com 0.4%
Consensus 0.8%
Prior 0.6%

09:15 Capacity Utilization Jan
Briefing.com 72.3%
Consensus 72.6%
Prior 72.0%

14:00 Treasury Budget Jan
Briefing.com -$46.0B
Consensus -$46.0B
Prior -$91.9B

14:00 Minutes of FOMC Meeting 1/28

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

[Roland99]

32. U.S. housing starts up 2.8% in January, strongest month-to-month growth since July

[UpInArms]

35. 8:30 reports:

8:30a U.S. housing starts up 21.1% year-on-year

8:30a Dec. housing starts 575,000 vs 557,000 prev

8:30a Jan. housing starts strongest since July

8:30a U.S. Jan. housing starts up 2.8% to 591,000

8:30a Import prices jump 1.4% on higher oil, gas prices

8:30a U.S. Jan. export prices rise 0.8%

8:30a U.S. Jan. nonfuel import prices up 0.4%

8:30a U.S. Jan. import prices rise 1.4%

[ozymandius]

2. Oil above $77 amid improving US economy

SINGAPORE – Oil prices extended gains above $77 a barrel Wednesday in Asia after surging the previous day amid expectations a growing U.S. economy will fuel increased crude demand.

Benchmark crude for March delivery was up 50 cents at $77.51 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $2.88 to settle at $77.01 on Tuesday.

Oil and stocks were boosted by signs that U.S. consumer spending may be improving. On Tuesday, Kraft Foods Inc. and apparel retailer Abercrombie & Fitch reported earnings that beat expectations, helping to send the Dow Jones industrial average up 1.7 percent.

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

---

Articles like this insult one's intelligence. First, it gives a singular reason for the increase in oil prices. Secondly, an improving economy will quickly stumble and decelerate with an increase in oil prices. Third issue: the U.S. is quickly becoming a market of smaller significance. More attention is being paid to emerging economies such as those in Asia than the American market. Fourth and final: I am willing to wager that banks are using hoarded money to invest in oil speculation. Currently, there is no regulation that says they cannot and there is a guaranteed return on investment.

[Roland99]

30. Think we're going to see a push to $3.50/gal this summer...perhaps close to $4 again.

great.

[Demeter]

45. More Likely The DOW will hit 6000 First

It cannot happen. There is no market left for $3.50/gallon gas. It simply will not sell, and the wheels of commerce will cease to turn.

[ozymandius]

3. China cuts back on US Treasury bond holding

WASHINGTON (AFP) – China has slashed its holding of US Treasury bonds after expressing concern over the swelling US deficit and amid rising US-China tensions, according to government data released.

The drop in China's bond holdings by 34.2 billion dollars or 4.3 percent to 755.4 billion dollars in December also fueled the biggest drop in foreign purchase of short-term US bonds, said the Treasury's latest international capital data report and based on comparative figures.

China's US bond holding decline was also its biggest drop since August 2000 and allowed Japan to regain its position as top holder of American government debt after a 15-month hiatus. ...

China is highly dependent on US export markets and invests the bulk of its 2.2 trillion dollars in foreign exchange reserves in US Treasury bonds.

http://news.yahoo.com/s/afp/20100217/bs_afp/useconomyfinancebondschinajapan

---

I have read across the Internet that China's tiny disinterest in short-term bonds is of little consequence.

[ozymandius]

4. Rates on 3-month T bills fall

...
The Treasury Department auctioned $25 billion in three-month bills at a discount rate of 0.100 percent, down from 0.110 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.185 percent, up from 0.170 percent last week. ...

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,997.47, while a six-month bill sold for $9,990.64. That would equal an annualized rate of 0.101 percent for the three-month bills and 0.188 percent for the six-month bills.

http://news.yahoo.com/s/ap/20100216/ap_on_bi_ge/us_treasury_bills

[ozymandius]

5. Fed's Hoenig: Fiscal strains pressuring Fed

WASHINGTON (Reuters) – The ballooning U.S. budget deficit and growing mountains of federal debt will increase pressures on the Fed to hold interest rates low and make it harder to avoid inflation, a senior Federal Reserve official said on Tuesday.

"The current outlook for fiscal policy poses a threat to the Federal Reserve's ability to achieve its dual objectives of price stability and maximum sustainable long-term growth, and therefore is a threat to its independence as well," Kansas City Federal Reserve President Thomas Hoenig said in remarks prepared for delivery to the Peterson-Pew Commission on Budget Reform.

Fiscal policymakers should opt for the difficult path of cutting spending and increasing revenues in order to rein in deficits, Hoenig said. U.S. fiscal policy must focus on reducing the debt buildup and its consequences, he said. ...

The Kansas City Fed president, who is a voter this year on the Fed's interest rate-setting panel, said high debt will tempt politicians to push the Fed to print money to bridge budget shortfalls.

Such an approach has historically lead to "major inflation," Hoenig said.

http://news.yahoo.com/s/nm/20100216/bs_nm/us_usa_fed_hoening

---

I agree with Hoenig on his criticism of any nation attempting to print currency as a way out of a crisis. That idea should be engrained into the DNA of any who works for the Federal Reserve.

[ozymandius]

6. TransUnion: Surprising increase in souring mortgages

...TransUnion samples 27 million consumer files at random each quarter to track credit trends, including the number of mortgages that are at least 60 days late or in foreclosure. The results are seen as a precursor to foreclosures. This was the 12th straight quarter of increasing delinquencies.

The increasing speed at which loans were souring surprised TransUnion, reversing the trend of the previous three quarters, in which delinquency rates, although going up, rose at a slower pace each quarter.

The increasing speed at which loans were souring surprised TransUnion, reversing the trend of the previous three quarters, in which delinquency rates, although going up, rose at a slower pace each quarter.

On the national level, the number of troubled mortgages in the survey rose 15.7% from the third quarter of 2008 to the fourth quarter of 2008, with subsequent increases of 14.0%, 11.3% and 7.6% in the first three quarters of 2009. ...

Six months ago, TransUnion had predicted California's rate of delinquencies would begin to decline in the middle of this year. The prediction now: not until the first or second quarter next year, Guarrera said.

The most likely explanation for the trend is a combination of factors, he said: payment increases kicking in on adjustable mortgages, particularly pay-option loans; the discouragement of borrowers who owe more than their homes are worth; and loans that have fallen back into delinquency after being been modified by lenders to ease terms for borrowers....

http://latimesblogs.latimes.com/money_co/2010/02/mortgages-sour-at-increasing-rate.html

[ozymandius]

11. CNBC's Olick: Treasury Concerned about Next Wave of Foreclosures

From Diana Olick at CNBC: What Mortgage Modifications Say About the Housing Market

Treasury officials today said they are still concerned about a coming wave of foreclosures, many from pay option ARMs and many from the prime jumbo basket, particularly hard hit by unemployment.

Olick also notes that the HAMP report for January has been delayed by weather until tomorrow. And she reports that only 2/3 of HAMP borrowers are current on their payments.

A couple of comments:

The main reason 1/3 of HAMP borrowers are delinquent is because some servicers didn't adequately pre-qualify borrowers before putting them in the program. The Treasury recently changed the guidelines for placing borrowers in to a trial program, and these more stringent pre-qualification requirements must be implemented by June. Most servicers have already started using the new requirements, and the number of new trial modifications will probably slow dramatically.

http://www.calculatedriskblog.com/2010/02/cnbcs-olick-treasury-concerned-about.html

[Demeter]

15. I'm Surprised It's Surprising

Actually, I'm not surprised. I'm just exhausted and heartsick. What a week!

Ozy, thanks for continuing to beat your head against the walls of Ignorance and Apathy. I don't know how you do it. Have a better day!

[Tansy_Gold]

41. What she said!!!

Sometimes it really gets weary, fighting teh styoopid night and day and day and night.

But we gotta do it, don't we?



TG

[ozymandius]

7. Goldman Sachs, Greece Didn’t Disclose Swap, Investors ‘Fooled’

Feb. 17 (Bloomberg) -- Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.

No mention was made of the swap in sales documents for the securities in at least six of the 10 sales the bank arranged for Greece since the transaction, according to a review of the prospectuses by Bloomberg. The New York-based firm helped Greece raise $1 billion of off-balance-sheet funding in 2002 through the swap, which European Union regulators said they knew nothing about until recent days.

Failing to disclose the swap may have allowed Goldman, a co-lead manager on many of the sales, other underwriters and Greece to get a better price for the securities, said Bill Blain, co-head of fixed income at Matrix Corporate Capital LLP, a London-based broker and fund manager. ...

Eurostat, the EU’s statistics office, this week ordered Greece to hand over information on the swaps transactions by the end of this week in an investigation that may extend to other EU countries. ...

Goldman could face legal liability “if it could be established that they were knowingly hiding risk, and therefore knew or had reason to know that the bond disclosure documents were misleading,” said Thomas Hazen, a law professor at the University of North Carolina at Chapel Hill. “But that would be a tough hill to climb, in terms of burden of proof. There’d have to be some sort of smoking-gun memo.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=asBNXSLtlN9E&pos=2

---

As Simon Johnson has said - people "fear the worst" from lack of transparency. If this amount of money has been hidden off the books - how much do we not know about Greece's debt levels and what is the worth of those bonds sold against that debt? Does this extend to other nations, too, who may have made similar deals with Goldman Sachs and similar entities?

[ozymandius]

9. When is a Fraud Not a Fraud? (Greece-Goldman Edition)

The short answer to the question in the headline is “When there are no rules.” ...

Although there is a considerable amount of well-warranted consternation about how Goldman sold swaps to Greece that allowed it to mask how bad its deteriorating finances were from the EU budget police, there has been perilous little discussion of why the fact that this was permissible says there is something very wrong with the rules in place. ...

Yves here. I’m not certain how much a US law professor knows about the securities laws that govern this particular offering (as in it most certainly is NOT US securities regs). But there seem to be three issues:
1. What disclosure standards would apply to the Greece bond offering. The offering memorandum, from a legal standpoint, is the issuer’s document, meaning Greece’s, not Goldman’s. So any shortcoming in disclosure is a liability issue for Greece (no joke, the deal manager makes the issuer sign a little letter acknowledging what portions of the offering memo were provided by it, and it is just a few sentences, like the selling price of the bonds, the underwriters’ spread, stuff like that. The description of the issuer and the securities themselves is most assuredly NOT the responsibility of the issuer).

2. OK, but what about this famous due diligence that investment bankers are supposed to perform? Well I have to tell you, even in good old SEC land, it’s less than you might think. In my day, the only thing that seemed to be required was visiting the major facilities of a new issuer (as in a company doing an IPO or first bond offering) and having outside counsel read board minutes (and tell the managers if they saw anything they found troubling).

3. But in this case, we have an interesting conundrum. Goldman clearly HAD TO KNOW the Greek offering documents were incomplete, right? They had arranged those swaps, they knew there was more debt than Greece was ‘fessing up to in its later offering memoranda.

Point 3 is where matters get a bit sticky. Under SEC regs, the failure to mention the swaps or their effect (that there was additional debt that had been deferred) would be a violation. This is a simplification, , but the concept is that the offering documents have to make a full and fair disclosure. That means not only do the statement made need to be accurate as of the date when they were made, but further more, they cannot fail to state a material fact if leaving that information out would be misleading. So question is whether under the regs governing this deal, whether an omission of this sort would also be considered a regulatory violation and/or an investor fraud.

http://www.nakedcapitalism.com/2010/02/so-when-is-a-fraud-not-a-fraud-greece-goldman-edition.html

[FarCenter]

52. Which GS subsidiary, using what country's laws and regulations, arranged this offering?

I'd doubt very much that it was done in NY. In which countries does GS do its European business?

http://www2.goldmansachs.com/worldwide/united-kingdom/index.html is the European headquarters, but the deals could be done in other countries, or posessions of the Queen, like Jersey Island or Isle of Man.

[ozymandius]

10. To my last point: Just What Is The Real Level Of Government Debt In Europe?

...
In a fascinating article in today’s New York Times, journalists Louise Story, Landon Thomas and Nelson Schwartz begin to recount the mirky story of just how the major US investment banks have been able to earn considerable sums of money effectively helping European governments to disguise their growing mountain of public debt. ...

In fact, concerns about what it is exactly Goldman Sachs have been up to in Greece are not new, and the Financial Times have been pusuing this story for some time, in particular in connection with the investment bank’s ill fated attempt to persuade the Chinese to buy Greek government debt (and here, and here). Nor is the fact that the Greek government resorted to sophistocated financial instruments to cover its tracks exactly breaking news, since I (among others) have been writing about this topic since the middle of January - Does Anyone Really Know The Size Of The Greek 2009 Deficit? - following the arrival in my inbox of a leaked copy of the report the Greek Finance Minister sent to the EU Commission detailing the issues.

What is new in today’s report from the NYT team is the extent to which they identify the problem as a much more general one, involving more banks and more countries, since “Instruments developed by Goldman Sachs, JPMorgan Chase and a wide range of other banks enabled politicians to mask additional borrowing in Greece, Italy and possibly elsewhere”. I very strongly suggest that our NYT stalwarts take a long hard look at what has been going on in Spain, and especially at the Autonomous Community level. ...

So the question naturally arises, just how much in debt are our governments, really? As the NYT team point out, Eurostat has long been grappling with this matter, and as far back as 2002 they found themselves forced to change their accounting rules, in order to try to enforce the disclosure of many off-balance sheet entities that had previously escaped detection by the EU, since up to that point the transactions involved had been classified as asset “sales”, often of public buildings and the like. Following advice paid for from the best of investment banks many European governments simply responded to the rule change by reformulating their suspect deals as loans rather than outright sales. As we say in Spain “hecha la ley, hecha la trampa” (or in English, when you close one loophole you open another).

http://fistfulofeuros.net/afoe/economics-and-demography/just-what-is-the-real-level-of-government-debt-in-europe/

[Demeter]

16. I Tried a Similar Argument Last Night, at Board Meeting

Said it was necessary and reasonable for the Board to direct that if there is a discussion of Condo or Coop financial matters with any outside party, including the management company we hired, that as a courtesy and right, the Treasurer (moi) should have the option of attending that meeting or at least getting a summary report.

I'm so tired of getting bushwhacked with "oh, we did this, it was informal, it was an emergency, it was 6 months ago, blah, blah, blah...".

A Treasurer is responsible for more than just signing the checks. But no, nobody could see the foolishness of the dictatorial policy currently exercised...and with 4 new members, they are scared to take a position.

Chocolate is the only thing between me and an ulcer, I think.

[AnneD]

22. Morning Marketeers...

:donut: and lurkers. Since when did stealing money from folks become an acceptable business model? I mean really. I know I haven't taken THAT many business courses but I have looked into getting a degree in business and I don't recall a course known as Theft: a viable business plan, but then again I didn't look at the catalogues from Chicago or Harvard. The more I hear, the more I think Will Rogers was right. The quickest way to double your money is fold it and put it in your pocket.

Happy hunting and watch out for the bear.

[tclambert]

28. When did stealing become an acceptable business model? My first thought was pirates.

But the Vikings also included it in their business plans when they applied for boat loans.

Um. Okay, how about when that ape touched the monolith and realized he could use a femur as a club? They drove out the neighboring tribe, thereby inventing theft and murder for profit. It was supposed to lead to Hiltons in space and manned missions to Jupiter by 2001, but somebody filibustered everything.

[FarCenter]

53. Stealing is not an acceptable business model, but in business you can do anything that is legal

The laws are written in such a way that they do not preclude many things that would be considered "stealing" in the moral sense of the word.

However, law and morality have very little to do with each other.

[AnneD]

67. I think that pirate and vikings....

were honest in taking your money. WS types promise you one thing and cheat you. I prefer my money stolen honestly. :spray:

[Roland99]

31. Does that mean I have $8 in my shirt pocket then??

sweet!

;-)

[AnneD]

68. Yes.....

but due to the devaluation of the dollar, it will only be worth $4

[Roland99]

71. Dangit!

[Dr.Phool]

38. Look under the subject "Randonomics".

I was sitting around last night, and Frontline ran a rebroadcast from October called "The Warning". I watched it again, and picked up a little more that I missed the first time.

It was about Brooksley Born, and her attempt to regulate OTC derivatives, back during the Clinton Administration. Greenspan, Summers, Rubin, Geithner, Clinton, The House, and Senate went after her with a vengeance.

But, the most telling thing, that I must have missed the first time I saw it was her first lunch, and getting acquainted with Greenspan. He asked her point blank, "You probably believe in prosecuting fraudulent conduct, don't you"? She replied in the affirmative, and Greenspan launched a lecture, that prosecuting fraud was an interference in the market, and that the markets would snuff it out all on it's own, hence no need for regulation. :wtf:

I'd highly recommend anyone who hasn't seen this to go to Frontline's website and watch it. You'll see just what kind of foxes are guarding the henhouse, and why there's no hope for reform with these same idiots in charge. They're ALL blinded by Rand ideology, despite how thoroughly discredited it is.

They even had pictures of Reagan swearing in Greenspan in the oval office with Rand standing next to him.

We're fucked.

[DemReadingDU]

40. That was a great Frontline program

Saw it last fall.

When something financial comes up in my circle of family and friends, I try to tell them we are living in a global financial Ponzi. And someday it will implode because all Ponzis do.

I ask them if they remember hearing about Bernie Madoff? Oh yeh, they say his victims lost all their money. Yep that is what will happen when the global financial Ponzi implodes...we will all become like Bernie Madoff's victims.

Most just roll their eyes, still disbelieving me.

[Roland99]

43. I saw that on the schedule. Not sure if I DVR'd it or not. Hope I did.

Although, I've not been pleased with Frontline the last year or so. Seems they are getting a bit more sensationalistic and focusing on too-specific portions of a topic.

[DemReadingDU]

44. You could replay Frontline from the Internet

Frontline website
http://www.pbs.org/wgbh/pages/frontline/

The Warning
http://www.pbs.org/wgbh/pages/frontline/warning/?utm_campaign=homepage&utm_medium=bigimage&utm_source=bigimage

[Roland99]

51. Oh yeah...true. I keep forgetting that.

:)

Ugh...I need to rebuild my HTPC!!

[AnneD]

66. Like minds......

I was watching the same thing last night and I thought the same thing when they mentioned that lunch. The market sorts it out my ass. And Ms Born is right about the events repeating.

[Demeter]

46. You Have to Go to an Ivy League Indoctrination MBA School for Those Courses

Preferably on a legacy admission, with a new building or endowment of a chair to pave the way.

[Po_d Mainiac]

17. And by doing business with GS the US is

GUILTY BY ASSOCIATION in the eyes of the rest of the world.

Read: Terrorism bad...Financial terrorism A-OK :ESAD:

[Demeter]

47. Remind Me What ESAD Is, Please?

Senility isn't what it's cracked up to be.

[Po_d Mainiac]

62. Senility? What's that? Ratz, fergut the question

[fasttense]

18. So does Goldman Sachs Group Inc owns Greece now? Are they going to foreclose? n/t

[Demeter]

48. I Don't Think GS Wants to Own Anything, Actually

They just want the money, so they can own PEOPLE. Especially people in positions of power.

[DemReadingDU]

39. Of course this extends to other nations! Denninger responds

Bloomberg last paragraph
“Investment banks are guilty of being part of a wider collusion that fudged the numbers to make the euro look like a working currency union,” said Matrix’s Blain. “The bottom line is foreign exchange and bond investors bought something sellers knew not to be the case.”

http://www.bloomberg.com/apps/news?pid=20601087&sid=asBNXSLtlN9E&pos=1


2/17/10 Denninger...
.
.
Why does this matter? Because not disclosing these swaps made it look like Greece had less debt than it in fact had, and therefore resulted in a lower coupon (interest rate) and higher price for the bonds.

This of course feeds into the question about whether Greece was intentionally hiding its financial picture from EU regulators and others, but the bigger question is how many other nations have played similar games?

Yep.

full essay...
http://market-ticker.org/archives/1970-Tricky-Bond-Deals-Not-Just-Synthetics.html

[ozymandius]

8. Soros, Brady, Reed, Donaldson and Bogle Favor Volcker Rule

“Put aside for a moment the populist pressure to regulate banking and trading. Ask the elder statesmen of these industries — giants like George Soros, Nicholas F. Brady, John S. Reed, William H. Donaldson and John C. Bogle — where they stand on regulation, and they will bowl you over with their populism.

They certainly don’t think of themselves as angry Main Streeters. They grew quite wealthy in finance, typically making their fortunes in the ’70s and ’80s when banks and securities firms were considerably more regulated. And now, parting company with the current chieftains, they want more rules.”

Ritholtz: "The senior players want to see Wall Street have a more robust infrastructure that handles risk better, and is more survivable in a crisis. The current CEOs are driven primarily by profits."

http://www.ritholtz.com/blog/2010/02/soros-brady-reed-donaldson-and-bogle-favor-volcker-rule/

[Festivito]

12. Debt: 02/12/2010 12,351,624,191,901.06 (UP 2,299,727,616.78) (Fri)

(A little down, a little up. Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. Good morning, good day.)

= Held by the Public + Intragovernmental(FICA)
= 7,847,910,569,671.71 + 4,503,713,622,229.35
DOWN 104,736,856.82 + UP 2,404,464,473.60

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 309-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.72, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain another American, so at the end of the workday of the report, there should be 308,720,478 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $40,009.09.
A family of three owes $120,027.26. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 2,628,506,856.84.
The average for the last 30 days would be 2,015,188,590.24.
The average for the last 31 days would be 1,950,182,506.69.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 92 reports in 135 days of FY2010 averaging 4.80B$ per report, 3.27B$/day.
Above line should be okay

PROJECTION:
There are 1,073 days remaining in this Obama 1st term.
By that time the debt could be between 13.8 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)
02/12/2010 12,351,624,191,901.06 BHO (UP 1,724,747,142,987.98 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,441,795,188,389.30 ------------* * * * * * * * * * * BHO
Endof10 +1,194,483,287,126.63 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
01/25/2010 -000,041,466,126.01 ---- Mon
01/26/2010 +000,973,181,275.87 ------------********
01/27/2010 +000,063,416,019.94 ------------*******
01/28/2010 -024,245,578,618.07 -
01/29/2010 -000,416,981,206.21 ---
02/01/2010 +090,319,223,365.33 ------------********** Mon
02/02/2010 -000,066,012,400.47 ----
02/03/2010 +000,334,538,130.44 ------------********
02/04/2010 -009,677,289,403.68 --
02/05/2010 -000,081,816,346.60 ----
02/08/2010 +000,119,837,978.11 ------------******** Mon
02/09/2010 +000,368,016,270.35 ------------********
02/10/2010 -000,056,577,287.25 ----
02/11/2010 +007,265,093,186.33 ------------*********
02/12/2010 -000,104,736,856.82 ---

64,752,847,981.26 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(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=4271087&mesg_id=4271144

[Festivito]

60. Debt: 02/16/2010 12,384,358,013,736.32 (UP 32,733,821,835.26) (Tue)

(Up. Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 7,878,008,174,978.63 + 4,506,349,838,757.69
UP 30,097,605,306.92 + UP 2,636,216,528.34

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 309-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.72, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain another American, so at the end of the workday of the report, there should be 308,755,038 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $40,110.63.
A family of three owes $120,331.88. (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 3,096,740,191.04.
The average for the last 30 days would be 2,167,718,133.73.
The average for the last 32 days would be 2,032,235,750.37.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 93 reports in 139 days of FY2010 averaging 5.10B$ per report, 3.41B$/day.
Above line should be okay

PROJECTION:
There are 1,069 days remaining in this Obama 1st term.
By that time the debt could be between 13.9 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)
02/16/2010 12,384,358,013,736.32 BHO (UP 1,757,480,964,823.24 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,474,529,010,224.60 ------------* * * * * * * * * * * BHO
Endof10 +1,246,065,386,561.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
01/26/2010 +000,973,181,275.87 ------------********
01/27/2010 +000,063,416,019.94 ------------*******
01/28/2010 -024,245,578,618.07 -
01/29/2010 -000,416,981,206.21 ---
02/01/2010 +090,319,223,365.33 ------------********** Mon
02/02/2010 -000,066,012,400.47 ----
02/03/2010 +000,334,538,130.44 ------------********
02/04/2010 -009,677,289,403.68 --
02/05/2010 -000,081,816,346.60 ----
02/08/2010 +000,119,837,978.11 ------------******** Mon
02/09/2010 +000,368,016,270.35 ------------********
02/10/2010 -000,056,577,287.25 ----
02/11/2010 +007,265,093,186.33 ------------*********
02/12/2010 -000,104,736,856.82 ---
02/16/2010 +030,097,605,306.92 ------------********** Tue

94,891,919,414.19 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(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=4272353&mesg_id=4272382

[ozymandius]

13. Quiet around here.

Good morning, everyone. :donut: :donut: :donut: Time for me to make my way to school. I hope your Wednesday goes easily.

:hi:

[Festivito]

14. Have a good time today.

I just returned from work and forgot a key. Waiting to call someone to let them know. Exciting. I know.

[Demeter]

19. U.S. Economy Grinds To Halt As Nation Realizes Money Just A Symbolic, Mutually Shared Illusion

THERE'S THE ONION, BEING ALL PROPHETIC AGAIN...

http://www.theonion.com/content/news/u_s_economy_grinds_to_halt_as?utm_source=onion_rss_daily

The U.S. economy ceased to function this week after unexpected existential remarks by Federal Reserve chairman Ben Bernanke shocked Americans into realizing that money is, in fact, just a meaningless and intangible social construct.

Calling it "basically no more than five rectangular strips of paper," Fed chairman Ben Bernanke illustrates how much "$200" is actually worth.

What began as a routine report before the Senate Finance Committee Tuesday ended with Bernanke passionately disavowing the entire concept of currency, and negating in an instant the very foundation of the world's largest economy.

"Though raising interest rates is unlikely at the moment, the Fed will of course act appropriately if we…if we…" said Bernanke, who then paused for a moment, looked down at his prepared statement, and shook his head in utter disbelief. "You know what? It doesn't matter. None of this—this so-called 'money'—really matters at all."

"It's just an illusion," a wide-eyed Bernanke added as he removed bills from his wallet and slowly spread them out before him. "Just look at it: Meaningless pieces of paper with numbers printed on them. Worthless."

According to witnesses, Finance Committee members sat in thunderstruck silence for several moments until Sen. Orrin Hatch (R-UT) finally shouted out, "Oh my God, he's right. It's all a mirage. All of it—the money, our whole economy—it's all a lie!"

Screams then filled the Senate Chamber as lawmakers and members of the press ran for the exits, leaving in their wake aisles littered with the remains of torn currency.

U.S. markets closed as traders left their jobs and resolved for once to do or make something, anything of real value.

As news of the nation's collectively held delusion spread, the economy ground a halt, with dumbfounded citizens everywhere walking out on their jobs as they contemplated the little green drawings of buildings and dead white men they once used to measure their adequacy and importance as human beings.

At the New York Stock Exchange, Wednesday morning's opening bell echoed across a silent floor as the few traders who arrived for work out of habit looked up blankly at the meaningless scrolling numbers on the flashing screens above.

"I've spent 25 years in this room yelling 'Buy, buy! Sell, sell!' and for what?" longtime trader Michael Palermo said. "All I've done is move arbitrary designations of wealth from one column to another, wasting my life chasing this unattainable hallucination of wealth."

"What a cruel cosmic joke," he added. "I'm going home to hug my daughter."

Sources at the White House said President Obama was "still trying to get his head around all this" and was in seclusion with his coin collection, muttering "it's just metal, it's just metal" over and over again.

"The president will be making a statement very soon," press secretary Robert Gibbs told reporters. "At the moment, though, his mind is just too blown to comment."

A few U.S. banks have remained open, though most teller windows are unmanned due to a lack of interest in transactions involving mere scraps of paper or, worse, decimal points and computer data signifying mere scraps of paper. At a Bank of America branch in Spokane, WA, curious former customers wandered aimlessly through a large empty vault, while several would-be robbers of a Chase bank in Columbus, OH reportedly put their guns down and exited the building hand in hand with security guards, laughing over the inherent absurdity of the idea of $100 bills.

Likewise, the real estate industry has all but vanished, with mortgage lenders seeing no reason to stop people from reclaiming their foreclosed-upon homes.

"I don't even know what we were thinking in the first place," said former banker Nathan Collins of Brandon, MS, as he jimmyed open a door to allow a single mother and her five children to move back into their house. "A bunch of people sign a bunch of papers, and now this family has no place to live? That's just plain ludicrous."

The realization that money is nothing more than an elaborate head game seems to have penetrated the entire country: In Wilmington, DE, for instance, a collection agent reportedly broke down in joyful sobs when he informed a woman on the other end of the phone that he had absolutely no reason to harass her anymore, as her Discover Card debt was no longer comprehensible.

For some Americans, the fog of disbelief surrounding the nation's epiphany has begun to lift, with many building new lives free from the illusion of money.

"It's back to basics for me," Bernard Polk of Waverly, OH said. "I'm going to till the soil for my own sustenance and get anything else I need by bartering. If I want milk, I'll pay for it in tomatoes. If need a new hoe, I'll pay for it in lettuce."

When asked, hypothetically, how he would pay for complicated life-saving surgery for a loved one, Polk seemed uncertain.

"That's a lot of vegetables, isn't it?" he said.

[tclambert]

23. $200 "five rectangular strips of paper"

Okay, think I've got it: one hundred, one fifty, one ten, and two twenties.

[tclambert]

25. Goldman Sachs, bailouts, vegetables. There's a joke in there somewhere.

I'm thinking the punchline has to include the word zucchini.

[bread_and_roses]

27. total hilarity - as only the truth can be (n/t)

[Po_d Mainiac]

37. Paper currency isn't worthless

It's both soft and absorbent!
:hide:

[Demeter]

49. The Size, However, Defeats That Purpose

[Po_d Mainiac]

63. U woodn't say that if you lived here.

1) Bills are larger than leaves.
2) Bills will hold up better to finger pressure than leaves
3) Bills are washable
4) Bills are about the same size as corn cobs, but won't draw comments if you carry them in a front pocket..Esp if you're a male ...species
5) Bills can be cheaper than sacrificing a shirt-tail (see #4)

If this catches on, there will be a major push to get shrub onto the three dollar bill!
YMMV

[AnneD]

69. Gee....

I didn't get past the article about 20,000 tonnes of pubic hair shaved in preparation for Valentines Day. I am so easily distracted these days.

[AnneD]

70. Gee....

I didn't get past the article about 20,000 tonnes of pubic hair shaved in preparation for Valentines Day. I am so easily distracted these days.

[FarCenter]

54. The dollar volume of currency transactions is an insignificant percent of all payments

Almost all payments are done electronically if you consider dollar volume.

Money is really immaterial and mostly imaginary. The only thing that gives it value is the law.

[UpInArms]

20. dollar watch

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

Last trade 79.852 Change +0.152 (+0.20%)

US Dollar, Japanese Yen Selling to Continue as Risky Assets Extend Rebound

http://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/euro_open/2010-02-17-0802-US_Dollar__Japanese_Yen_Selling.html

The US Dollar and Japanese Yen are likely to continue lower against most major currencies in European trading hours as a broad rebound in risk appetite remains the primary driver of price action for foreign exchange markets.

Key Overnight Developments

• Japanese Service Demand Disappoints, Drops Most in 9 Months
• Australian Leading Index Gain But Foundation Remains Weak

Critical Levels



The Euro and the British Pound were locked in tight ranges through Asian trade as prices consolidated New York session gains, with the former drifting sideways below 1.3780 while the latter oscillated within 50 pips of the 1.58 level. We remain short EURUSD at 1.4881 and GBPUSD at 1.5765.

Asia Session Highlights



Australia’s Westpac Leading Index added 0.5% in December, rising to the highest level in over a year. The index – which aims to forecast the economy’s performance six to nine months into the future – added 6.2% in the 12 months from December 2008 to yield the highest annual growth rate in over two years, seemingly suggesting that a robust Australian recovery is set to continue. However, the details of the report reveal that much of the monthly increase in December was driven by higher stock prices and buoyant building approvals, both of which ultimately owe recent gains to global and domestic stimulus efforts. This may point to inherent vulnerability as the flow of government cash increasingly dries up while catalysts for self-sustained growth remain noticeably lacking.

In Japan, the Tertiary Index of retail service demand proved disappointing as the metric fell -0.9% in December, the most in nine months, amid expectations for -0.2% decline. Sales of wholesale and retail services led losses, slipping -0.4%, as the anemic labor market continues to bear down on spending.

...more...

Daily Sound Bites 02.17

http://www.dailyfx.com/forex/fundamental/article/daily_sound_bites/2010-02-17-1246-Daily_Sound_Bites_02_17.html



...more...

[Demeter]

21. Bank Fraud with FDIC Complicity in Short Sales on Foreclosed Mortgages

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1004815

Stomach churning.

[DemReadingDU]

24. Martin Weiss: RED ALERT: Next debt crisis near!

2/15/10 Martin Weiss: RED ALERT: Next debt crisis near!
.
.
despite everything, few have recognized the historical patterns that have emerged:

Pattern #1
The stampede to risk is a herd phenomenon.

Pattern #2
Greed breeds corruption. To keep the party going, companies and governments dress up the numbers, hide the facts, or simply lie through their teeth.

Pattern #3
Inevitably the truth is revealed, setting investors on a selling frenzy. Like predators, they first attack the weakest, at the periphery of the herd.

Pattern #4
The bailouts merely helped spread the rot.

The most important pattern of all:
Until and unless excess debts are liquidated, the disease cannot be subdued. It will merely
return at a different time, in a different form. Next to feel the pain: Sovereign nations!

click to read more about each of these patterns...
http://www.moneyandmarkets.com/red-alert-next-debt-crisis-near-7-37783

[tclambert]

26. You know, we bought the Lousiana territory, and Alaska.

I bet we could buy Haiti at a bargain price right now. Iceland and Greece will probably go at a sheriff's auction. Wait, does China own the USA?

[DemReadingDU]

29. Buying Haiti

I did read that somewhere, because it would give the U.S. lots of workers, cheap. Nothing about helping them, feeding, or healthcare. Just that there would be lots of cheap workers. Nothing about Americans getting jobs or helping us either. Just those greedy corporations looking to increase their profits.
:grr:

[tclambert]

34. Haiti gained independence in a slave revolt. Ironic that corporations might

buy the whole country in order to restore slavery. Do I detect an infinite loop?

[Demeter]

50. Haiti's Slavery Never Ended

it just went underground, got dressed up in costume, and wink, wink, nudge, nudged.

[Roland99]

33. Index Futures:

S&P 500 1,098.80 +5.60 0.51%
DOW 10,275 +34.00 0.33%
NASDAQ 1,807 +7.50 0.42%

[UpInArms]

36. Humana to cut 1,400 jobs in 2010

http://www.marketwatch.com/story/humana-to-cut-1400-jobs-in-2010-2010-02-17-820460

NEW YORK (MarketWatch) -- Humana Inc. (HUM 46.78, +0.77, +1.67%) said Wednesday that it intends to reduce its workforce by approximately 1,400 jobs, or 5%, in 2010 by cutting 2,500 positions while adding 1,100 additional jobs in areas of growth such as medical-cost containment capabilities, pharmacy management, and specialty products. The reduction will come primarily from attrition, process efficiencies, outsourcing, and position eliminations.

[Roland99]

42. Outsourcing a lot of phone banking/customer service I'm sure. And even claims processing.

I had a couple of chances over the years to work in IT at Humana as a contractor.

They have a BAD habit of cutting loose almost all contractors late in Q4 every couple of years and then slowly re-hiring new contractors back. Glad I was never a part of that mess.

[FarCenter]

55. The two year rule is an IRS rule

If you hire a contractor continuously for more than 2 years, you run the risk that the IRS will treat them as employees. Also raises the chance of their being able to sue for benefits, etc.

So it is a widespread practice by HR organizations to require contractors to be let go after 2 years.

[DoBotherMe]

56. k&r

Thanks to everyone who posts here. I still read every day and enjoy all your 'insider' comments! Dana ; )

[Demeter]

57. A Country of Serfs Ruled By Oligarchs By Paul Craig Roberts

http://www.informationclearinghouse.info/article24704.htm

...The dollar’s gains are not due to inherent strengths. The dollar is gaining because government deficits in Greece and other EU countries are causing the dollar carry trade to unwind. America’s low interest rates made it profitable for investors and speculators to borrow dollars and use them to buy overseas bonds paying higher interest, such as Greek, Spanish and Portuguese bonds denominated in euros. The deficit troubles in these countries have caused investors and speculators to sell the bonds and convert the euros back into dollars in order to pay off their dollar loans. This unwinding temporarily raises the demand for dollars and boosts the dollar’s exchange value.

The problems of the American economy are too great to be reached by traditional policies. Large numbers of middle class American jobs have been moved offshore: manufacturing, industrial and professional service jobs. When the jobs are moved offshore, consumer incomes and U.S. GDP go with them. So many jobs have been moved abroad that there has been no growth in U.S. real incomes in the 21st century, except for the incomes of the super rich who collect multi-million dollar bonuses for moving U.S. jobs offshore.

Without growth in consumer incomes, the economy can go nowhere. Washington policymakers substituted debt growth for income growth. Instead of growing richer, consumers grew more indebted. Federal Reserve chairman Alan Greenspan accomplished this with his low interest rate policy, which drove up housing prices, producing home equity that consumers could tap and spend by refinancing their homes.
Unable to maintain their accustomed living standards with income alone, Americans spent their equity in their homes and ran up credit card debts, maxing out credit cards in anticipation that rising asset prices would cover the debts. When the bubble burst, the debts strangled consumer demand, and the economy died....

Policymakers who are banking on stimulus programs are thinking in terms of an economy that no longer exists. Post-war U.S. recessions and recoveries followed Federal Reserve policy. When the economy heated up and inflation became a problem, the Federal Reserve would raise interest rates and reduce the growth of money and credit. Sales would fall. Inventories would build up. Companies would lay off workers.

Inflation cooled, and unemployment became the problem. Then the Federal Reserve would reverse course. Interest rates would fall, and money and credit would expand. As the jobs were still there, the work force would be called back, and the process would continue.

It is a different situation today. Layoffs result from the jobs being moved offshore and from corporations replacing their domestic work forces with foreigners brought in on H-1B, L-1 and other work visas. The U.S. labor force is being separated from the incomes associated with the goods and services that it consumes. With the rise of offshoring, layoffs are not only due to restrictive monetary policy and inventory buildup. They are also the result of the substitution of cheaper foreign labor for U.S. labor by American corporations. Americans cannot be called back to work to jobs that have been moved abroad. In the New Economy, layoffs can continue despite low interest rates and government stimulus programs.

To the extent that monetary and fiscal policy can stimulate U.S. consumer demand, much of the demand flows to the goods and services that are produced offshore for U.S. markets. China, for example, benefits from the stimulation of U.S. consumer demand. The rise in China’s GDP is financed by a rise in the U.S. public debt burden...

Hapless Americans, unrepresented and betrayed, are in store for a greater crisis to come. President Bush’s war deficits were financed by America’s trade deficit. China, Japan, and OPEC, with whom the U.S. runs trade deficits, used their trade surpluses to purchase U.S. Treasury debt, thus financing the U.S. government budget deficit.

The problem now is that the U.S. budget deficits have suddenly grown immensely from wars, bankster bailouts, jobs stimulus programs, and lower tax revenues as a result of the serious recession. Budget deficits are now three times the size of the trade deficit. Thus, the surpluses of China, Japan, and OPEC are insufficient to take the newly issued U.S. government debt off the market.

If the Treasury’s bonds can’t be sold to investors, pension funds, banks, and foreign governments, the Federal Reserve will have to purchase them by creating new money. When the rest of the world realizes the inflationary implications, the US dollar will lose its reserve currency role. When that happens Americans will experience a large economic shock as their living standards take another big hit.

America is on its way to becoming a country of serfs ruled by oligarchs.


I ONLY HIT THE HIGHLIGHTS, FOLKS. GOOD SUMMARY OF CURRENT SITUATION AND HOW WE GOT THERE.

[Demeter]

58. Tanzania gem saga nears end

http://www.ft.com/cms/s/0/ab42e698-1b3c-11df-953f-00144feab49a.html

One of the strangest tales in the history of company accounting reached a closing chapter when the Gem of Tanzania, a stone once valued in a building company’s accounts for £11m, sold for just £8,010.

A company controlled by a Birmingham entrepreneur and philanthropist bought the large purple rock, once touted as a ruby of unparalleled value, from the administrators of failed builder Wrekin Construction

Tim Watts, the entrepreneur, believes the uncut stone could be worth up to £2m but plans to “smash it up” into smaller jewels at a party where he will serve “the best ruby port we can get”. Administrators at Ernst & Young announced the sale, shortly after they were approached by the Financial Times on behalf of a bidder anxious to know the outcome of the auction.

---WHAT A PIG!---

An FT investigation last year established that the gemstone was mined in Tanzania and brought into the UK by a South African entrepreneur later involved in a scheme to cure Aids with goat serum.

David Unwin, a Derbyshire businessman, bought the gem, which weighs 2.1kg, from an intermediary for about £300,000. Revalued at £11m, it then supported the creditworthiness of Wrekin, Mr Unwin’s business, which collapsed last spring with debts of £40m. But the Italian gemmological institute credited on the valuation certificate later denied having issued it.

A Hatton Garden gemmologist had dismissed the Gem of Tanzania as being worth as little as £100. Mr Watts, who owns Pertemps, a group of recruitment companies, is more impressed by the gem: “We expect to sell it at a very substantial profit . . . there are at least 20 significant smaller rubies on its surface.”

Network Group, an Aim-listed company controlled by Pertemps that is owed several hundred thousand pounds by Wrekin has acquired the gem. So far, only a local jeweller unable to offer a reliable valuation has inspected the gem for Network. Mr Watts believes it could be worth anything from £200,000 to £2m when broken up.

“We won’t be putting it on the balance sheet, though,” he said.

[MilesColtrane]

59. I played a gig at the Trend Micro offices yesterday.

We started on the 7th floor.

There were many cubicles, with lots of dry erase boards displaying flow charts that had words like customer service, valuation, convergence, and 360 degree view written all over them. They had red beans and rice and king cake in the break room and everyone was kind of hanging around with their Mardi Gras beads on.

After a while our contact took us down to the 4th floor.

The 4th floor was filled with H-1B workers from the Philippines. They were actually coding and doing something.

On the way out of there our contact said, "Yeah, that's where all the real work gets done."

[Demeter]

61. It Looks Like a Market on the Verge of a Nervous Breakdown

Can't wait to see what tomorrow brings.

[Roland99]

64. Everyone see this one?

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x7728588

[Demeter]

65. Ozy Posted it last week, I think