STOCK MARKET WATCH, Monday March 29

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday March 29, 2010

AT THE CLOSING BELL ON March 26, 2010

Dow... 10,850.36 +9.15 (+0.08%)
Nasdaq... 2,395.13 -2.28 (-0.10%)
S&P 500... 1,166.59 +0.86 (+0.07%)
Gold future... 1,108 +2.30 (+0.21%)
10-Yr Bond... 3.85 -0.03 (-0.83%)
30-Year Bond 4.75 -0.01 (-0.27%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Handy Links - Market Data and News:Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance    Google Finance    Bank Tracker    
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Handy Links - Government Issues:
LegitGov    Open Government    Earmark Database    USA spending.gov

Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman
    William Black: This Economic Disaster    Bill Moyers with Kevin Drum and David Corn

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren

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

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

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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 Personal Income Feb
Briefing.com 0.1%
Consensus 0.1%
Prior 0.1%

08:30 Personal Spending Feb
Briefing.com 0.5%
Consensus 0.3%
Prior 0.5%

08:30 PCE Prices - Core Feb
Briefing.com 0.1%
Consensus 0.1%
Prior 0.0%

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

[UpInArms]

39. U.S. consumer spending rises 0.3% in February

http://www.marketwatch.com/story/us-consumer-spending-rises-03-in-february-2010-03-29

WASHINGTON (MarketWatch) -- Real consumer spending increased a seasonally adjusted 0.3% in February after having risen 0.2% in January, the Commerce Department estimated Monday. After adjusting for inflation, the Commerce Department reported that after-tax incomes were unchanged in February. After-tax incomes fell 0.4% in January, after adjusting for inflation. With spending rising faster than incomes, the personal savings rate fell to 3.1% of disposable income, down from 3.3% in January and 4.2% in December 2009.

[ozymandius]

2. Oil above $80 as traders look to US jobs data

SINGAPORE – Oil prices rose above $80 a barrel Monday in Asia as investors look to a key U.S. jobs report later this week for clues about the outlook for consumer spending. ....

Oil has drifted in the low $80s for two weeks as investors mull whether slack crude demand from the U.S. and Europe justify higher prices.

The Labor Department is scheduled to announce March employment data on Friday, and forecasters expect the unemployment rate to remain at 9.7 percent, despite an increase of about 200,000 jobs. ....

In other Nymex trading in April contracts, heating oil rose 1.63 cents to $2.086 a gallon, and gasoline gained 0.78 cent to $2.215 a gallon. Natural gas fell 2 cents to $3.852 per 1,000 cubic feet.

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

[ozymandius]

3. An economic puzzle Bernanke can't solve

WASHINGTON (Reuters) – It's a mystery that has puzzled even Federal Reserve Chairman Ben Bernanke: if the U.S. economy is growing rapidly, why isn't it creating jobs?

Friday's hotly anticipated employment report for March may muddle matters even more. Economists polled by Reuters had widely divergent views, with one looking for an increase of 400,000 jobs -- which would be the strongest in a decade -- while others thought it may show another small net decline.

The consensus expects a gain of 190,000 jobs, which would mark only the second month of job growth since the recession started in December 2007, and the largest increase since March of that year. ....

The Fed and private economists are trying to answer the bigger question of why the labor market shed 8.4 million jobs during this recession. Although the downturn was the deepest since the Great Depression, the job losses were even more severe than most forecasters had predicted based on models that compare economic growth and employment. ....

http://news.yahoo.com/s/nm/20100328/bs_nm/us_economy_weekahead_outlook

[Tansy_Gold]

4. I have a "friend of a friend" who has the answer to this one!

Actually, this FOAF has the answer to everything -- "Obama has the answer to everything."



Tansy Gold, back at the daily grind after a successful, but exhausting, art week-end.

[ozymandius]

6. Good morning.

:donut: :donut: :donut:
I am glad that your art weekend was successful. We visited a festival on Saturday where some friends were exhibiting their wares. The more durable items (often available at a discount, in quantity) were the swiftest sellers: leather goods, jewelry and wooden items. Expendable items like bath salts, candles and oils were not major movers.

Posting has been light with so much needing to get done for school as we head toward Spring Break next week.

I'll spend s little more time here before duty calls elsewhere.

:hi:

[Demeter]

13. It's a Bubble, Is Why

All that stimulus turning into nothing at all.

[Loge23]

16. Stimulus is it's own industry now...

The financial sector has virtually played this money in a way that simply keeps their gears moving, but does very little for the rest of us. The well-documented lending squeeze is the short proof of that.
There is some spending activity although I believe that this is an indication of the consumer reconciling themselves to the new reality, rather than an indication of anything substantially optimistic.
There are no job spikes in my neck of the woods, no raises, no sign of increased root-industry activity.
Essentially, we still have the same mess we had two years ago.
We're seeing survival, not recovery.

[Demeter]

23. I'm Buying Bargains

Closeouts, returns, anything I couldn't afford to pay retail, and wouldn't on principle except in life-threatening emergency. Also been working like a dog (no offense to Tansy's poochies)...so there's a little extra for such purchases.

[Johnny Harpo]

15. This Is NOT Rocket Science.....

The economy is 'growing' on the backs of the jobs that this adminstration, the previous administration, and all the administrations going back to Reagan have allowed to be shipped outside (off-shored) of the United States. Not to mention the literal flood of H1B's that have come inside the U.S. and sucked up jobs that should be being held by American citizens.

For all the talk of job creation, for all the talk of penalties against U.S companies that ship American jobs outside of the U.S. it all remains TALK and NO action.

For all the talk of regulation, there are no regulations. Reagan saw to that.

If the currrent adminstration is made up of the 'best and the brightest', we are in serious trouble, because these guys evidently can't find their butts in the dark with both hands.

Bernanke is puzzled?...Puzzled my ass...Get the hell out of Washington and talk to the 'real' people not just those that are picked for the photo opp or the news clip no matter how true and representative their stories may be.

[Dr.Phool]

19. Here's some job creation........In Mexico

http://www.courierpress.com/news/2010/mar/26/last-day-work-comes-hundreds-evansville-whirlpool-/


For most of the Whirlpool employees who lost their jobs today, next week will be a time to apply for unemployment benefits, take steps to enroll in training or school and otherwise prepare for a future with fewer opportunities for blue collar workers.

Leaving the company’s plant off U.S. 41 for the last time Friday, Blaine Miller, who is 44, said he isn’t sure where he will turn next for employment.
JASON CLARK / Courier & Press Whirlpool workers leave the Evansville plant, some for the last time, on Friday as 455 jobs were eliminated. The production line in Evansville will shut down in June.

JASON CLARK / Courier & Press Whirlpool workers leave the Evansville plant, some for the last time, on Friday as 455 jobs were eliminated. The production line in Evansville will shut down in June.

“The factory jobs are leaving this area,” he said. “And there is so much competition with the kids coming out of college these days.”

Miller was among the 455 workers whose final day at Whirlpool was Friday. Some of them retired, but most were laid off as a step in the company’s plan to shut down its Evansville factory and move production from there to a new plant in Mexico.

(snip)

[TheWatcher]

35. The Propaganda is going beyond insulting these days, isn't it?

We are becoming the Cold War Soviet Union with better TV.

It's not a "Puzzle."

It's not a "Mystery."

It's BY DESIGN, my dear Helo Ben.

You should know.

Your predecessor was the Architect.

You're just continuing his work.

You BOTH should be in jail.

ROTTING.

[Demeter]

43. I'll Drink to that!

They can't take all the credit, though. Congress and Clinton did the NAFTA,CAFTA, thing.

[ozymandius]

5. U.S.-Bound Boxes Pile Up in Asia as Lines Avoid Adding Ships

March 29 (Bloomberg) -- South Korea’s biggest port, overwhelmed with empty containers a year ago, is now dealing with shipping lines that have more cargo than they can carry.

Surging shipments of furniture, electronics and clothes to the U.S. and Europe, coupled with capacity cuts by shipping lines, has caused as much as 15 percent of containers to be delayed in Busan this year, often by more than a week, according to Park Jong Ho, assistant general manager at Busan International Container Terminal Co. .....

A capacity crunch on transpacific routes has disrupted deliveries of Asian and U.S. exports, prompting a probe by U.S. regulators. Container lines have cut trips and imposed higher rates on customers, or shippers, after slumping trade and an excess supply of vessels caused industrywide losses of about $20 billion last year, according to Drewry Shipping Consultants Ltd. ....

U.S. customers have also contributed to the disruptions and higher rates by cutting inventories to two-year lows and placing more rush orders on concerns about holding stock.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aH.ytIOQhEgA&pos=11

[burf]

14. I have a question

with regards to this story. If there is more cargo to carry than ships would not the Baltic Dry Index show an increase? Here is Bloomberg's own chart on the index and it shows no real demand in ships. Link: http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND

I did not post the chart as there are several to choose from for your perusal.

Good day to all and a happy upcoming Easter.

[Tansy_Gold]

17. Yes, and what about all those ships supposedly lying at anchor, empty

and waiting for cargoes?


Tansy Gold, who still hasn't gone out to check on those empty freight cars but may have another reason to do so.

[burf]

18. After a research.....

I found a clue as to the "increase in shipping".

From BusinessInsider:

Around 10% of the container shipping fleet remains laid-up and idle as a result of the recent global financial crisis and economic slow down plus over-capacity caused by new ships being built.

Yet sentiment could be turning in this space, due to expectations of a sustained global rebound for world trade. One sign is that the Westbound Transpacific Stabilization Agreement, which is an organization of ship owners that collectively bargains freight rates, is planning to try and push through rate hikes for U.S.-Asia routes in April.

Hellenic Shipping News: Effective April 1, 2010, WTSA carriers say they intend to raise dry cargo rates by US$300 per 40-foot container (FEU) and $240 per 20-foot container (TEU). Lines have additionally proposed that refrigerated cargo rates increase on April 1 by US$300 per FEU and $240 per TEU for U.S. West Coast cargo, and by $500 per FEU and $400 per TEU for all other cargo, including minilandbridge, inland intermodal and all-water shipments from the U.S. East and Gulf Coasts.

Moreover, in a recent note Charles de Trenck of the transport research firm Transport Trackers believes ship owners are preparing to bring laid-up ships back on the market due to increased optimism that shipping demand is coming back, even in the face of what remains a rather high orderbook of new vessels being built.



Read more: http://www.businessinsider.com/rumor-flood-of-idle-ships-coming-out-of-lay-up-because-they-see-a-sustained-global-rebound-2010-2#ixzz0jZf0WPcX


So the carriers intend to raise rates. Nothing like a "perceived shortage" of carrier capacity to justify the rate hikes. But they wouldn't do something like that now would they?

[Demeter]

24. Acting on a Rumor

Just another way to get burned.

[Dr.Phool]

21. Watch out for the hobo's

Or take a few bottles of Jim Beam with you.

[tclambert]

41. I just bet a couple bucks on a shipping company.

(It's IRA time.) They are paying good dividends. And they just bought another ship. I took that as sign they foresee growth for their own business, at least. But I really just wanted the dividends.

Funny thing is, I read one of those professional analyst reports, and they based their entire analysis on what the stock price has done in the last few months. Their algorithm is purely meant to identify the "momentum" in recent stock price fluctuations. They never mentioned dividends once. They rated it a "Sell." Contrary me, I did the opposite. And I feel damn good about it.

[ozymandius]

7. Shoppers Emerging With Best Buy’s Sales Signal Retail Revival

Funny how this coincides with tax refund season - ozy

March 29 (Bloomberg) -- Companies from Saks Inc. to Best Buy Co. are growing more confident that the recent revival of consumer spending is more than just a blip.

New-York based Saks is “moving from defense to offense,” selectively rebuilding inventory and increasing investment as consumers “come out of their shell,” Stephen I. Sadove, chairman and chief executive officer of the luxury retailer, said in a March 24 e-mail. Same-store sales at Best Buy rose 7.4 percent in the U.S. during the fourth quarter, the Richfield, Minnesota-based electronic retailer said March 25. ....

The “key factor” determining the pace of household spending will be the strength of the labor market, JPMorgan Chase & Co. economists said in a March 12 report to clients.

Companies added 190,000 workers to their payrolls in March, the most in three years, according to the median forecast of 62 economists surveyed by Bloomberg News. The unemployment rate is projected to remain unchanged at 9.7 percent. The Labor Department releases job statistics for March on April 2.

Income growth is also contributing to the optimism. Wages and salaries increased 0.8 percent from September 2009 to January 2010 after falling 5.1 percent between August 2008 and July 2009, based on Commerce Department data.

http://www.bloomberg.com/apps/news?pid=20601109&sid=aVnJC05Wz3VA&pos=13

[ozymandius]

8. Ritholtz has a huge chart depicting bank failure stats.

FDIC Bank Failures

The fun never stops.

My mother reports that a bank, one of the two failed Georgia banks over the weekend, had a branch near her. The local paper reported that all the branches of this particular bank were shuddered.

Then she told me a story about someone trying to sell her stock in that bank about four years ago. She didn't bite. But one of her neighbors did. The neighbor called the local broker a year ago to sell the stock. The broker told her to,"Get in line." Apparently people on the inside of this bank dumped shares a year before the OTS held their 5pm pizza party there.

[ozymandius]

9. Gregory Mankiw is an iron clad idiot.

Trying to Tame the Unknowable

One thing we cannot do very well is forecast the economy. The recent crisis and recession caught most economists flat-footed. This is nothing new. We have never been good at foretelling the future, but when the news is favorable, others forgive our lack of prescience.

Some critics say the Federal Reserve should have foreseen the bursting of the housing bubble and its financial aftershocks. A few of them, having made the correct call themselves, are enjoying newfound celebrity.

Some of them even post with regularity on this thread.

Another thing we cannot do very well is regulate financial institutions.

When I was chairman of President George W. Bush’s Council of Economic Advisers from 2003 to 2005, I spoke openly about the need to reform regulation of Fannie Mae and Freddie Mac. I did not know when or how these government-sponsored enterprises would come crashing down, but I thought they posed undue risks for the economy and for taxpayers.

First off: I would not trumpet my role in GWB's economic accomplishments if I were Professor Mankiw.

I was not alone in that judgment. While working on the issue, I consulted privately with an economist who had held a high-ranking position in the Clinton administration. He shared precisely my concerns, as did Alan Greenspan, who was then the Fed chairman.

One really should stop digging that intellectual grave big hole in the ground at this point.

And he teaches at Harvard?!?

[Dr.Phool]

20. So, he consulted with Summers (or Geithner)

And he's ashamed to name them?

[ozymandius]

38. That's what I was thinking.

He consulted with AN economist.

Anyone can call himself an economist. There is no certifying agency to issue the title 'economist'. So Professor Mankiw's unnamed consultant could have been some schizophrenic skid row bum named Mr. Economist for all we know.

But I digress. It probably was Geithner or Summers, maybe a similarly sycophantic hack from the Clinton administration who stroked his palm.

[Roland99]

10. HA! Love the toon.

[UpInArms]

11. dollar watch

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

81.306 -0.134 (-0.17%)

Daily Sound Bites 03.29

http://www.dailyfx.com/forex/fundamental/article/daily_sound_bites/2010-03-29-1141-Daily_Sound_Bites_03_29.html



...more...

US Dollar Surges then Pulls Back: What will Nonfarm Payrolls Bring?

http://www.dailyfx.com/forex/fundamental/forecast/weekly/usd/2010-03-26-2028-US_Dollar_Surges_then_Pulls.html

The US Dollar finished the week as the top-performing G10 currency, staging a noteworthy rally against the Euro, Japanese Yen, and other key counterparts. Impressive gains had seemingly less to do with economic data and more with impressive trader demand. Many were left looking for reasons that the Greenback would rise so sharply against the Japanese Yen, but concrete reasons were difficult to find. Of course, price action against the Euro was far more eventful given the ongoing Greek Fiscal Crisis and European Union bailout. Despite sharp declines, the EURUSD showed noteworthy reversal through Friday’s close. The critical question going forward will be whether we can expect similarly eventful price action in the week ahead.
Upcoming US Nonfarm Payrolls data promises a great deal of volatility across USD pairs, and results may give further clues as to the medium-term trajectory for the US Dollar. Consensus forecasts call for the second net-gain in jobs since December, 2007, and optimism is clearly riding high ahead of the report. Preliminary US Corporate Profits data for Q4, 2009 data showed that profitability increased an impressive 30 percent on the year on the heels of impressive productivity gains. Economists subsequently estimate that companies will resume hiring as profit margins return to normal, but there obviously remains ample room for disappointment. It will be critical to watch whether the US economy added jobs in any significant fashion and, more importantly for FX markets, reactions from the US Dollar.

Of course markets will have to wait until Friday for said NFP data, and a great deal of things can happen between now and then. In terms of concrete economic event risk, traders should keep a close eye on Personal Income and Spending data due Monday, Consumer Confidence on Tuesday, ADP Private Employment data on Wednesday, and ISM Manufacturing figures on Thursday. Any one of these reports could force sharp reactions from US financial markets and the domestic currency. Somewhat-lofty expectations across the board leave the US Dollar at key risk of pullback on any especially large disappointments.

At the risk of sounding repetitive, the US Dollar remains at a crossroads against the Euro and other key counterparts. Whether or not this past week’s advance is the start of a much bigger rally will depend on a great number of factors—not least of which is the stacked economic calendar. The Euro/US Dollar’s breakdown initially gave reason to believe that the Greenback could continue higher (EURUSD lower). Yet EURUSD bears, including this author, were left in the lurch when the pair quickly reversed course. The case for medium-term Euro/US Dollar declines may very well depend on the coming week of trading.



...more...

[Demeter]

12. Now That's a Wonky Cartoon! I Like It

90% of the population wouldn't understand the ramifications, though.

[DemReadingDU]

22. More "Boom and Bust" Cycles Coming: The Real Reason Buy and Hold Is Dead

click link for video

3/29/10 More "Boom and Bust" Cycles Coming: The Real Reason Buy and Hold Is Dead

With major averages flat or slightly negative for the past 10 years, many investors have given up on the "buy and hold" strategy that became a mantra in the 1990s. That, of course, has prompted some contrarians to declare that now is the best time to be a buy and hold investor.

In this case, the conventional wisdom is right, says Lakshman Achuthan, managing director of the Economic Cycle Research Institute (ECRI).

"I'm not saying 'buy and hold' is a bad thing, unless you're having more frequent recessions," he says. And that is precisely what ECRI expects in the coming decade because of two big patterns that Achuthan says are irreversible:

* One, sucessive recoveries from post WWII recessions have become weaker and weaker "on every count," including growth, sales, employment and production.
* Two, there's more volatility in the economy, with the big swoon in late 2008-early 2009 and surge in more recent months being a glaring example.

Achuthan predicts we have entered a period of "more ‘boom and bust'-type cycles," similar to what occurred in the 1970s. "The Great Moderation is history," he says, referring to the period starting in the mid-1990s when many economists (and policymakers like Ben Bernanke) believed the business cycle had been smoothed out, if not eradicated.

"You don't have to be a mad scientist," he says; just "back off your risk in the stock market and buy bonds" if a recession appears imminent. "And if we see a recovery take more exposure and get out of bonds because the recovery is going to give you a little inflation."

If recessions are more likely - and more intense in scope - then investors will demand higher risk premiums for owning equities, Achuthan explains in the accompanying clip.

Of course, the trick is predicting when those recessions and recoveries have begun -- or are about to begin -- something ECRI believes it has mastered. As noted here, the ECRI does have a good track record when it comes to predicting economic cycles. They correctly predicted last year's strong recovery after having correctly called the 2001 and 1990 recessions. However, ECRI waited until March 2008 to officially diagnose the last recession that they now agree began in December 2007.

"I'm not suggesting we'll get it right all the time but we'll do a lot better than ‘buy and hold,'" Achuthan says.

click link for video

http://finance.yahoo.com/tech-ticker/more-%22boom-and-bust%22-cycles-coming-the-real-reason-buy-and-hold-is-dead-453648.html?tickers=^DJI,^GSPC,SPY,DIA,UUP,TBT,QQQQ&sec=topStories&pos=8&asset=&ccode=

[Demeter]

25. Also Known as "Pump and Dump"

Another clue for the clueless--this is no recovery.

[Demeter]

26. Treasury says it will begin selling Citi shares

http://news.yahoo.com/s/ap/20100329/ap_on_bi_ge/us_citigroup_treasury

The Treasury Department said Monday it will begin selling the stake it owns in Citigroup Inc., which could result in a profit to the government of about $7.5 billion.

The government received 7.7 billion shares of Citigroup in exchange for $25 billion it gave the bank during the 2008 credit crisis. It said it will sell the shares over the course of this year, depending on market conditions.

Like any investor, the government will likely hold on to its shares if prices fall steeply. However, Citi shares have steadily been rising with the broader market in recent months, which means the Treasury Department stands to pocket a hefty profit.

The government has been trying to unravel the investments in made in banks under the $700 billion Troubled Asset Relief Program, or TARP, that came in at the height of the financial crisis. Citi, one of the hardest hit banks during the credit crisis and recession, received a total of $45 billion in bailout money, one of the largest rescues in the program. Of the $45 billion, $25 billion was converted to the government's ownership stake in the bank.

The Treasury paid $3.25 a share for its stake.

New York-based Citi repaid the other $20 billion it owed the government in December.

The Treasury had been planing to sell 20 percent of its stock at the time when Citi was selling new shares late last year. At a price of $3.15 a share, the government would have lost $158.7 million on the sale, so it opted not to participate in the deal at that time but to unload all of its 7.7 billion shares over the course of this year.

Citi shares fell 8 cents to $4.23 in morning trading Monday. The government would make about $7.5 billion in profit on its stake in Citigroup if it sells the stock for that price.

When Citigroup agreed to repay the $20 billion in loans it still owed the Treasury Department, the pair also agreed the Treasury would sell the common stock it owned in the New York bank throughout 2010.

The Treasury owns about 27 percent of Citigroup's outstanding stock, based on the number of shares that were outstanding on Jan. 31.

Even after it sells its stake in Citigroup, the Treasury Department will still hold warrants to purchase future shares in the bank.

The Treasury said Monday that Morgan Stanley will handle the sale of the shares.

[Festivito]

27. Debt: 03/25/2010 12,687,570,153,023.93 (UP 25,103,495,504.11) (Thu)

(Up enough for a Friday dump. Good day all.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,200,481,797,735.73 + 4,487,088,355,288.20
UP 24,094,622,106.32 + UP 1,008,873,397.79

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: $9.71, ABOUT TEN BUCKS for a 1B$ 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 309,074,718 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 $41,050.17.
A family of three owes $123,150.51. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 12,090,883,845.17.
The average for the last 30 days would be 8,463,618,691.62.
The average for the last 28 days would be 9,068,162,883.88.
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$/day.
There were 120 reports in 176 days of FY2010 averaging 6.48B$ per report, 4.42B$/day.
Above line should be okay

PROJECTION:
There are 1,032 days remaining in this Obama 1st term.
By that time the debt could be between 14.1 and 22.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/25/2010 12,687,570,153,023.93 BHO (UP 2,060,693,104,110.85 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 +0,777,741,149,512.20 ------------* * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,612,929,088,477.01 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/05/2010 -000,074,542,156.87 ----
03/08/2010 +000,260,238,586.47 ------------******** Mon
03/09/2010 +000,542,827,835.74 ------------********
03/10/2010 +000,295,703,179.30 ------------********
03/11/2010 +029,692,666,288.30 ------------**********
03/12/2010 +000,363,901,611.09 ------------********
03/15/2010 +060,487,338,970.60 ------------********** Mon
03/16/2010 +000,241,513,784.66 ------------********
03/17/2010 +000,318,864,879.69 ------------********
03/18/2010 +020,986,560,998.86 ------------**********
03/19/2010 +000,244,805,712.35 ------------********
03/22/2010 +000,662,784,714.13 ------------******** Mon
03/23/2010 +000,796,033,080.11 ------------********
03/24/2010 +000,495,755,553.04 ------------********
03/25/2010 +024,094,622,106.32 ------------**********

139,409,075,143.79 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=4321076&mesg_id=4321115

[Festivito]

36. Debt: 03/26/2010 12,685,893,723,805.70 (DOWN 1,676,429,218.23) (Fri)

(Down a little. Gotta run to work. Yikes. Late. Good day all.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,199,959,850,024.50 + 4,485,933,873,781.20
DOWN 521,947,711.23 + DOWN 1,154,481,507.00

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 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: $9.71, ABOUT TEN BUCKS for a 1B$ 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 309,083,358 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 $41,043.6.
A family of three owes $123,130.8. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 11,705,985,861.49.
The average for the last 30 days would be 8,194,190,103.04.
The average for the last 28 days would be 8,779,489,396.12.
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$/day.
There were 121 reports in 177 days of FY2010 averaging 6.41B$ per report, 4.38B$/day.
Above line should be okay

PROJECTION:
There are 1,031 days remaining in this Obama 1st term.
By that time the debt could be between 14.1 and 21.7T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/26/2010 12,685,893,723,805.70 BHO (UP 2,059,016,674,892.62 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 +0,776,064,720,294.00 ------------* * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,600,359,451,453.73 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/08/2010 +000,260,238,586.47 ------------******** Mon
03/09/2010 +000,542,827,835.74 ------------********
03/10/2010 +000,295,703,179.30 ------------********
03/11/2010 +029,692,666,288.30 ------------**********
03/12/2010 +000,363,901,611.09 ------------********
03/15/2010 +060,487,338,970.60 ------------********** Mon
03/16/2010 +000,241,513,784.66 ------------********
03/17/2010 +000,318,864,879.69 ------------********
03/18/2010 +020,986,560,998.86 ------------**********
03/19/2010 +000,244,805,712.35 ------------********
03/22/2010 +000,662,784,714.13 ------------******** Mon
03/23/2010 +000,796,033,080.11 ------------********
03/24/2010 +000,495,755,553.04 ------------********
03/25/2010 +024,094,622,106.32 ------------**********
03/26/2010 -000,521,947,711.23 ---

138,961,669,589.43 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=4324212&mesg_id=4324689

[Demeter]

28. Is Angela Merkel the Most Influential Leader in the EU?

http://dailyreckoning.com/is-angela-merkel-the-most-influential-leader-in-the-eu/

...It has been interesting to watch how the EU has dealt with this (Greece) crisis, and events have proven who is the real leader of the EU. German Chancellor Angela Merkel has emerged as the most influential leader in the EU. Last week it seemed an agreement had been reached, as it was announced the EU countries would back financial assistance to cash-strapped Greece. But Merkel said NEIN! She was not going to participate in a Greek bailout, and instead encouraged them to turn to the IMF for support. The markets took the euro (EUR) lower after her refusal to go along with the program.

But now French President Nicolas Sarkozy has indicated he supports Merkel’s plan. With the two big dogs of the EU singing from the same sheet of music, a Greek bailout by the EU is all but dead. Greece will have to turn to the IMF for funding, if and when it is needed. But right now, as Merkel has continued to point out, Greece has not asked for any financial support. I would expect the EU to make a statement of support for Greece, but leave any financial support to the IMF. This should be an acceptable plan for all parties, Greece will receive their support, and the EU will not be on the hook for future bailouts of the PIIGS.

And another bailout may be needed sooner rather than later. Fitch ratings agency downgraded the debt of Portugal yesterday, contributing to the euro’s sell off yesterday. The news pushed the euro to below $1.33 before it moved back up this morning. The downgrade reminds everyone that Greece is not alone in their debt problems. It also reminded me of something that I meant to bring you late last week. Chuck had struggled with a name for the US states that are in need of a ‘bailout’, and several readers came up with the same acronym: MANIC (California, New York, Illinois, Michigan, & Arizona) and one other suggested replacing Michigan with Pennsylvania and changing it to PANIC. Funny stuff! I realize this is some serious stuff, but you have to insert a bit of humor or else the dire situation could become unbearable! But back to Europe…

So Merkel is probably going to end up getting her way. Ty Keough pointed out a story to me yesterday which backs my assertion last week that Merkel may have an alternative motive for deep-sixing the EU led bailout. A weaker euro is absolutely in the best interest of Germany, which is an export driven economy. While everyone is beating up China for manipulating their currency, could Merkel be doing the same thing? Recent data shows the German manufacturing sector is expanding at the fastest pace in nearly 15 years, and export orders are also expanding at record speed. The drop in the value of the euro, combined with rising demand has helped accelerate the German recovery. I picture Merkel doing her best imitation George Peppard from the A-Team saying, “I love it when a plan comes together” (thanks to Aaron for that reference).

I mentioned the other day that US debt is now trading at higher prices than the debt of some blue chip corporations. This is unusual, and could be a scary sign of things to come; investors now have less faith in the US government debt than the debt of Berkshire Hathaway. Another story in the WSJ caught my eye this morning. Credit Default Swaps – (the derivative insurance policies that helped bring down AIG) now show that US debt is riskier than that of the Eurozone. According to the story “…a lot of market participants would see this as a bit of a shot across the bow, a bit of a wakeup” for anyone who’s complacent about the US debt. With all of the attention focused on the European debt crisis, many have taken their eye off of the problems right here in the US. But with rising debt levels, and waning confidence in the ability for the US to meet our commitments, the US could be in store for their own credit shock. The debt rating agencies have to be watching this closely, and could move to put the US on a ‘credit watch’.”

Norway left rates unchanged, and the krone (NOK) took a hit because of the non-move. Investors had positioned themselves for a bit of a surprise move by the Norges bank, and when the higher rates didn’t materialize, the krone got sold. But higher rates will come, and Norway continues to have one of the strongest economies in all of Europe. Investors should take advantage of these prices to add to positions in the krone.

China continues to let investors know it won’t be folding to external pressures to let the renminbi (CNY) appreciate. Vice Minister of Commerce Zhong Shan said, “The Chinese government will not succumb to foreign pressure to adjust our exchange rate,” during a trip to Washington to meet with lawmakers. “To force the appreciation of the renminbi will be counterproductive.” Several lawmakers have proposed retaliatory tariffs for Chinese goods, sparking talk of a trade war. The Treasury Department is ‘seriously considering’ labeling China a currency manipulator in an April 15 report which would make it easier for companies to seek import duties according to Senator Charles Schumer. But China would likely dig in their heels if Schumer and his colleagues were successful according to those who know and understand the Chinese leadership. “You can kiss goodbye any notion of China letting the currency to begin to float upward, once it is labeled a currency manipulator,” one Chinese expert was quoted in a report.

The New Zealand economy grew at the fastest pace in two years in the fourth quarter as reported overnight. GDP in New Zealand rose 0.8% from the previous three months as consumer spending, manufacturing, and housing all saw increases. Growth will probably accelerate this year, forcing Reserve Bank Governor Alan Bollard to raise interest rates. Higher rates should help support the kiwi (NZD), as interest rate differentials attract investors. All good news for the New Zealand dollar.

Gold gained a bit yesterday as investors took advantage of low prices. The recent dollar strength has beaten down the price of gold to levels we haven’t seen in a month. All of the uncertainty in the markets has increased demand for a stable asset, and gold certainly fits the bill. There is a risk that all of the monetary stimulus measures will remain longer than necessary, and force global inflation rates higher. Gold is an excellent hedge against higher inflation, and prices are relatively low. Investors began moving back into gold to take advantage of these low prices, which I think is a smart move...

[Demeter]

29. Government Authorities are Looking Out for Themselves – As Should Everyone

http://dailyreckoning.com/government-authorities-are-looking-out-for-themselves-as-should-everyone/

“China in Midst of ‘Greatest Bubble in History’”, Bloomberg told readers on March 17, 2010. That was the opinion of certain experts interviewed by the news service. One expert held the opposite view: “‘People making comments about bubbles possibly don’t have all the facts,’ HSBC Holdings Plc Chief Executive Officer Michael Georghegan said in Shanghai today. Regulators are in control of the banking industry, and have the ability to curb lending as needed, he said.”

Aside from the bubble question (which the experts answered), it is the rationale behind Georghegan’s chipper comment that deserves attention. “Regulators are in control” seems low on the list to assure clientele. Even though Georghegan is persuaded, investors should be skeptical. What follows is a review of instances when trusted regulators were a good reason to panic.

On September 4, 1929, Roger Babson advised a gathering in Wellesley, Massachusetts to “pay up their loans and avoid margin speculation at this time because a ‘crash’ of the stock market was inevitable.” This was the New York Times summary in its September 6 edition under the headline “Babson Predicts ‘Crash’ in Stocks.”

Forever known as the “Babson Break,” stocks fell 3% after the ticker relayed Babson’s warning. This was two days after the Dow Jones Industrial Average peaked at 381, which would remain the top until 1954. The Times quoted the most celebrated economist of the time, Irving Fisher: “Stock prices are not too high and Wall Street will not experience anything in the nature of a crash.” The persistence of celebrated economists to miss monumental shifts is, or should be, expected.

Alexander D. Noyes, sometimes called the “dean of American financial journalism,” cautioned Times’ readers that Babson’s counsel might be outdated. There are “numerous other considerations now which must nowadays modify ideas about the future. One is the power and protective resources of the Federal Reserve.”

There were some inside the Fed who thought differently. In 1928, Carl Snyder of the New York Fed wrote: “Owing to the abundance of credit, in excess of what appears to be about the maximum possible growth of trade, there came a heavy expansion of bank investment…. Partly in consequence of the abundant credit, we have seen what appears to be the greatest building boom which this country has known in 60 years…”

By the fall of 1929, plans were or had been drawn for five buildings ranging in height from 80 to 150 stories in New York. The “protective resources of the Fed” were no better (or worse) in 1929 than in 2008.

Investors are better off trusting their own judgment than the motivations of government authorities. In the same September 6, 1929, “Babson Break” edition of the Times, a column with the title “Action by Board Doubted” reported the “total of broker’s loans by member banks of the Federal Reserve System took another jump… to a new peak of $6,354,000,000. Treasury officials indicated that they did not expect any radical step by the Federal Reserve Board at this time to curb the speculative movement.”

This instance of an inflated stock market accompanied by a blank stare from the government is known, in contemporary parlance, as the “Greenspan Put,” now superseded by the “Bernanke Put.” Speculators, in 2010, as in 1929, must decide whether the “power and protective resources of the Federal Reserve” have put a floor on the stock market’s price even though it was (and is) floating on borrowed money.

Such calculations aside, there was another story in the Times’ “Babson Break” issue that warned the mind of the market was that of the village idiot. The article, Brokerage Office Set Up On Pebble Beach Golf Course,” reported: “Golf enthusiasts who are following the course of the national amateur championship at Pebble Beach, Cal., may watch the stock market while keeping up with the play. A temporary brokerage office, housed in a tent…has been established by the firm of E.F. Hutton & Co…. The temporary office has had a lively bit of business from the crowd following the players and from some of the players, too, many of whom are ardent followers of market quotations.”

In 1966, when the Federal Reserve was ceding monetary policy to the Johnson administration, the business editor of the New York Times calmed readers: “Luckily, the Government has the ability and the wisdom not to let inflation break into a gallop as has happened recently in other countries.” The inflation rate was 3.3% at the time and rose to 6.1% in 1969. The Times, in its high-minded trust of Washington, did not stoop to consider the authorities might be looking after their own interests. Secretary of Defense Robert McNamara was lying about the financial burden of Vietnam, where the troops deployed were to double (from 184,000) in 1966. The Johnson administration would not consider a major tax increase and the budget deficit rose from $1 billion in 1965 to $25 billion in 1968.

As every schoolchild knows, political independence of the Federal Reserve does not include its unstated mandate to plug Treasury deficits. In late 1965, Federal Reserve Chairman William McChesney Martin had told the Federal Reserve Open Market Committee “I cannot believe that all periods of prosperity float on constantly rising levels of credit or that one can ignore credit quality.” Martin’s intentions may have been parsimonious, but McNamara’s War demanded expansion. Bank credit rose at a 7.2% rate in December 1965 and by 15% in April 1966. At Martin’s 1970 White House farewell dinner, he told the assembled: “We are in the wildest inflation since the Civil War.”

As goes inflation, so go bonds. Americans who trusted the “ability and wisdom” of the Federal Reserve were scarred. In 1969, Institutional Investor published a front cover story, “The Death of Bonds.” Prices of long-term Treasuries fell 14% from the end of 1966 to 1969. Stock investors wished they hadn’t. After rising for 17 years, the Dow Jones Industrial Average reached a peak of 995 on February 9, 1966. The Dow was 777 on August 12, 1982. These numbers do not reflect inflation’s toll on purchasing power. Consumer prices tripled over the 16-year period.

This brings us to the present and to a regular columnist in the New York Times, Greg Mankiw, professor of Economics at Harvard University, past chairman of President George W. Bush’s Counsel of Economic Advisers, and so on. On December 23, 2007, Mankiw outdid Irving Fisher: “The truth is the current Fed governors, together with their crack staff of Ph.D. economists and market analysts, are as close to an economic dream team, as we are ever likely to see…. The best Congress can do now is to let the Bernanke bunch do its job.”

The Federal Reserve governors had spent 2007 in a daze; 2008 would show their policy was to panic, overreact to meltdowns the Fed had fostered, and disguise their market manipulations.

Anti-authoritarianism is often simple common sense. Returning to China, the country suffered one of the worst inflations of the twentieth century during the 1930s and 1940s. (In good measure, this was inflicted by the United States. See “America’s Beggar-Thy-Neighbor Policy” under “Articles” on the Aucontrarian.com website.)

The Chinese press, controlled by Chinese Communists in 1949, blamed inflation on “Kuomintang agents” and “unscrupulous speculators.” (It never changes.) Prices for necessities – rice, bean oil, firewood, soap – were rising daily when the Communists demanded trade be conducted in the new People’s Bank note. In June 1949, a New York Times correspondent spoke to a merchant in Nanking who would not touch the paper currency: “Communist currency may be backed by rice, but you can’t hold rice. It spoils. A gold bar is always a gold bar.”

[Demeter]

31. With High Unemployment and Budget Deficits Will the IMF Call Inflation the Answer?

http://dailyreckoning.com/with-high-unemployment-and-budget-deficits-will-the-imf-call-inflation-the-answer/

IMF economist Olivier Blanchard offers the idea that central banks should let inflation grow to four percent in general. He believes this can help fight crises in the future because it leaves more room for interest rate adjustments in times of need. Unfortunately, his theory could already have policy implications for today’s crisis…

According to Reuters:

“Bundesbank chief and arch inflation hawk Axel Weber led the retort in a series of newspaper articles and speeches that sharply criticized Blanchard for even raising the issue — so dangerous did he see the idea to public inflation expectations.

‘”‘The creation of policy scope to avert future crises could actually lead to asset bubbles (in real assets), which in turn would heighten the risk of future crises,’ said William de Vijlder, chief investment officer at Fortis Investments. ‘ A case of shooting ourselves in the foot if ever there was one. De Vijlder, however, said that while the idea was clearly dismissed by euro zone officials, it may gain more traction in the United States — where there is no official inflation target to begin with. Others would add Britain and Japan to that list.

“They estimate that allowing inflation to accelerate to 5 percent would cut unemployment by 1.5 percentage points more than holding inflation at 2 percent. This drop in the number of jobless would be 3 points more if higher inflation was allowed over two years. On the fiscal front, they argue, a similar higher inflation scenario would cut budget deficits by one percentage point of gross domestic product per year.”

Given persistent high unemployment and the notion that a real recovery cannot come without a recovery in the job market, it’s no surprise the IMF is considering this theory. How inflation steals from our hard-earned savings is an entirely different story.

To learn more about Blanchard’s IMF inflation theory, and how it affects the economy, you can read the Reuters article on playing house with inflation:

http://www.reuters.com/article/idUSTRE62N41W20100324

[Demeter]

34. European Central Bank President: IMF Aid “Very, Very Bad”

http://dailyreckoning.com/european-central-bank-president-imf-aid-very-very-bad/

There have been reports in the past that the dire straits of the euro are really no different from the challenges faced by the states within America’s borders... we’d have to disagree.

For a variety of reasons we’ve covered here before, the euro’s been dragging close to ten-month lows... it found new reason to sink as ECB President Jean-Claude Trichet indicated that financing support from outside of the euro area, including the IMF, is “very, very bad.”

According to Bloomberg:

“The market doesn’t care that ‘France and Germany are saying they have the framework to a plan to support Greece including the IMF,’ said John Curran, a Toronto-based senior vice president at CanadianForex Ltd. ‘It’s like ‘Yeah, OK, great, I have a plan for winning the lottery, too.’ Show us something that works’…

“Trichet, in an interview on France’s Public Senat television, said, ‘If the IMF or any other authority exercises any responsibility instead of the euro group, instead of the governments, this would clearly be very, very bad.’”

Even Goldman is regretting a bet the euro could rise:

“Goldman Sachs Group Inc. exited a bet that the euro would strengthen against the dollar after the trade lost 2.8 percent.

“’We have clearly underestimated the impact on the euro from the European sovereign crisis and perhaps also from the broader macroadjustment that it portends,’ five Goldman analysts including Thomas Stolper, a London-based economist, wrote in an e-mail message to Bloomberg News today. ‘These political headwinds currently matter far more for the euro than the cyclical factors.’” ...

[Ghost Dog]

30. America’s looming trade war with China — Mike Whitney

MARCH 29 — A war of words has broken out between China and the United States and the pundits are predicting that it will end in a full-blown trade war.

The Obama administration thinks that China is manipulating its currency to gain an unfair trade advantage and increase its exports. China’s Premier Wen Jiabao’s adamantly denies the charge.

“I do not think the renminbi is undervalued” he says. “And we are opposed to countries pointing fingers at each other or taking strong measures to force other countries to appreciate their currencies... If the United States uses the exchange rate to start a new trade war, China will be hurt. But the American people and US companies will be hurt even more.”

President Obama has tried a number of things to get China to break the dollar-link and let its currency appreciate, but, so far, nothing has worked.

...

That’s just a public relations smokescreen. What’s really going on is that US corporations operating in China are getting squeezed on big deals, and they don’t like it. So they’re using their political muscle to beat up on China. The Wall Street Journal explains it like this:

“A growing number of U.S. companies feel unwelcome in China, according to a new survey by the American Chamber of Commerce in China...Negative sentiment among Amcham’s members, which traditionally have been a strong lobby in Washington arguing for more engagement with China, adds to wider risks in U.S.-China relations....

“Amcham conducted the latest survey because it was concerned about the deteriorating investment environment and the impact of the rules on indigenous innovation....

“In late October, three Chinese ministries posted a joint notice requiring technology vendors to gain accreditation for their products before they could be included in a government-procurement catalog of products containing ‘indigenous innovation.’ The catalog will cover dozens of products sold by foreign companies, including servers, mobile base stations, security and finance software, and wind-power generators....

“However, this broader push for ‘indigenous innovation’ has already been interpreted and implemented in different ways across the country, and industry groups say that in some cases provincial-level officials have taken it upon themselves to implement their own preferential purchasing practices. That explains why some companies in the Amcham survey say their businesses are already taking a hit...

“A U.S. Treasury report due next month must decide whether to label China a currency manipulator, which would trigger talks between the countries followed possibly by sanctions.” (US firms feel shut out in China, Andrew Browne and Loretta Chow, Wall Street Journal)

To summarize: The multinationals see a “deteriorating investment environment” because of “rules on indigenous innovation.” In other words, China’s leaders want to strengthen their own industries and keep more of the profits for themselves (which is what governments are supposed to do.) The proposed rules will affect “dozens of products sold by foreign companies, including servers, mobile base stations, security and finance software, and wind-power generators.” So, naturally, the multinationals are angry. The Chinese government is “implementing their own preferential purchasing practices”, which means they are buying more China-made products. This is causing real pain for the multinationals that are “already taking a hit.”

So the current confrontation has nothing to do with currency manipulation. It’s about whiny corporations that need to Uncle Sam’s help to get China to play fair. And the White House is only too happy to oblige. After all, Obama task is to make sure that the rules which enrich the multinationals (“free trade”) are strictly enforced. Sometimes that involves tough talk and arm twisting, but no one wants a trade war. Protectionism is bad for business; it pushes prices up, lowers demand, and hurts profits. What good is that? Here’s an excerpt from the Washington Post which explains what’s really going on behind the splashy headlines:

“If the United States does decide to impose tariffs on China, Chen said, American companies operating in China, which account for more than 60 per cent of China’s exports to the United States, would surely be hurt the most. ‘In the end,’ Chen said, ‘America is the one that needs to adjust.’

/... http://www.themalaysianinsider.com/index.php/opinion/breaking-views/57867-americas-looming-trade-war-with-china--mike-whitney

[Demeter]

32. What Did Big Business Expect?

They weren't paying attention in the 70's when the engineers were talking about the reverse-engineering process in Asia stealing America's innovative products (and then going TWO better by making things cheaper and better).

Did GM and whoever think with their over-extended, loyalty-free operations they were going to overcome a nuclear nation (in both the tribal and the weapons meanings of the word)?

Did they really think they could put the squeeze on 1.6 billion people? Did they think the US was a gun for hire, now that Bush-Cheney are no longer at the wheel of the ship of state? We already have two major wars and God knows how many little ones on the stove.

For too long American administrations have prostituted the nation for multinational corporate gains. And today we see the result--America hollowed out like an orange after juicing, a people traumatized by the cruelty of Capitalism Unbound, two or three generations starved for everything.

[Demeter]

33. US Debt: A Bigger Threat than Terrorism?

http://dailyreckoning.com/us-debt-a-bigger-threat-than-terrorism/

Public opinion polls are a dime a dozen. But put a few of them together, and an interesting picture starts to emerge…

Let’s start with the one that hits like a two-by-four: 79% of Americans polled by Fox News and Opinion Dynamics believe it’s possible the US economy could “collapse.” Republican, Democrat, independent – doesn’t matter, the majorities are overwhelming.

The same poll reveals 65% of Americans believe the national debt poses a bigger threat to the nation’s future than terrorism. Again, supermajorities of Democrats, Republicans and independents are in agreement. (But interestingly, the numbers are lowest among Republicans – 61%. That compares with 66% of Democrats and 69% of independents. Dick Cheney’s “deficits don’t matter” mantra dies hard, it would seem.)

Buttressing those numbers is a poll by Bloomberg asking Americans for their assessment of President Obama’s performance on a host of issues. The category where he measures the worst: the deficit. Only one-third of those polled approve of how he’s dealing with that. And 80% agree with the statement “government spending is out of control.”

Those numbers wouldn’t surprise David Walker, the former US comptroller general now with the Peterson Foundation. Peterson commissioned its own poll a year ago at this time. As Walker writes in his book Comeback America, “Above all, Americans told us that they want to get the economy back on track. But their second priority for the Obama administration was somewhat surprising. They wanted the president and the Congress to address our escalating deficits and debt levels.”...

[RUMMYisFROSTED]

37. America is back!

:woohoo:

[tclambert]

40. Who's the front?

[RUMMYisFROSTED]

42. Your betters.

Deal with it.