STOCK MARKET WATCH, Wednesday April 7

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday April 7, 2010

AT THE CLOSING BELL ON April 6, 2010

Dow... 10,969.99 -3.56 (-0.03%)
Nasdaq... 2,436.81 +7.28 (+0.30%)
S&P 500... 1,189.43 +1.99 (+0.17%)
Gold future... 1,136 -0.60 (-0.05%)
10-Yr Bond... 3.95 -0.04 (-1.03%)
30-Year Bond 4.83 -0.01 (-0.17%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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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

10:30 Crude Inventories 04/03
Briefing.com NA
Consensus NA
Prior 2.93M

15:00 Consumer Credit Feb
Briefing.com -$1.4B
Consensus -$0.3B
Prior $5.0B

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

[ozymandius]

41. Oil drops after US inventories report (crude +2million bbl)

LONDON (AFP) – Oil prices fell on Wednesday from recent 18-month peaks, as traders digested rising US crude inventories that suggested weaker demand in the world's biggest energy consuming nation.

New York's main contract, light sweet crude for delivery in May, dropped 75 cents to 86.09 dollars a barrel.

The US Energy Information Administration (EIA) said Wednesday that American oil inventories advanced by two million barrels in the week ending April 2.

That was far more than market expectations for a gain of 1.3 million barrels last week, according to analysts polled by Dow Jones Newswires.

Gasoline or petrol stockpiles tumbled by 2.5 million barrels, while distillates -- which include diesel and heating fuel -- rose 1.1 million barrels.

http://news.yahoo.com/s/afp/20100407/bs_afp/commoditiesenergyoilprice_20100407152959

[ozymandius]

2. Oil hovers below $87 after mixed US supply report

SINGAPORE – Oil prices hovered below $87 a barrel Wednesday in Asia after a report showed U.S. gasoline supplies fell more than expected last week while crude and distillate inventories rose. ....

Gasoline inventories dropped last week by 3.0 million barrels, the American Petroleum Institute said late Tuesday. Analysts had expected a fall of 1.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

However, inventories of crude and distillates rose, the API said.

The Energy Department's Energy Information Administration is scheduled to announce its supply report later Wednesday.

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

[Roland99]

22. May RBOB - $2.3483

I'm sure we'll be well over $3/gal by the end of the month.

[ozymandius]

3. SEC seeks tighter rules on asset-backed securities

....
The Securities and Exchange Commission will weigh in Wednesday by proposing Wall Street firms that package and sell asset-backed securities be required to provide fuller disclosures on them.

The disclosures would include information on every underlying loan in a package. For example: What type of mortgage loan was involved? Were complete documents required from the borrower? Or was it a "no-doc" or "liar loan"?

The idea is to give investors more information to better judge the securities' risk. That would reduce reliance on the Wall Street credit rating agencies. The three big agencies — Moody's Investors Service, Standard & Poor's and Fitch Ratings — were widely criticized for failing to give investors adequate warning of the risks in subprime mortgage securities that triggered the financial crisis.

The SEC commissioners are expected to propose the new rules at a public meeting Wednesday. The rules could be formally adopted after a public comment period, possibly with changes.

http://news.yahoo.com/s/ap/20100407/ap_on_bi_ge/us_sec_rules_for_new_market

[Po_d Mainiac]

19. Why not add some scent?

If the anchoring assets are crap, the security should smell like a pig farm in the middle of August.

[Demeter]

54. I'm not ready for SmelloVision

an idea whose time will never come.

[ozymandius]

4. Fed not ready for exit strategy: minutes

WASHINGTON (AFP) – The US Federal Reserve is mulling its exit strategy from massive economic support measures but has put off any decision, minutes of the latest policy-setting meeting showed.

The Federal Open Market Committee (FOMC) "discussed possible approaches for formulating and communicating key elements of its strategy for removing extraordinary monetary policy accommodation at the appropriate time," minutes from the March 16 meeting said. ....

Ryan Sweet at Moody's Economy.com pointed out that the minutes lacked additional information on the Fed's plan to exit the extremely accommodative monetary policy it has pursued in support of the economy's recovery from the worst recession in decades.

"However, the minutes show the central bank is exploring the possibility of allowing 'some or all' of its Treasury securities to mature without reinvestment, thus shrinking its balance sheet." ....

According to the minutes, a number of members noted that the panel?s expectation for a policy change "was explicitly contingent on the evolution of the economy rather than on the passage of any fixed amount of calendar time."

http://news.yahoo.com/s/afp/20100407/bs_afp/useconomyfinancebankrate

[ozymandius]

5. Fed's policymaking group has power over your purse (quick Q&A)

The Federal Reserve's chief policymaking group has vast power over the finances of ordinary Americans, businesses and investors. The consequences of its interest-rate decisions range wide: from people's ability to get affordable loans to the price of cereal at the grocery store or gasoline at the corner station.

Here's a look at the policymaking group, called the Federal Open Market Committee. ....

Its policymakers decide whether to buy securities. Doing so expands the flow of money into the financial system and lowers the Fed's key interest rate. Conversely, the policymakers could decide to sell securities. That would drain money from the system and tighten credit by raising rates. The Federal Reserve Bank of New York is responsible for conducting these operations. ....

Here is this year's roster of voting members: Fed Chairman Ben Bernanke and Fed Governors Donald Kohn, Kevin Warsh, Elizabeth Duke and Daniel Tarullo, all based in Washington; William Dudley, president of the Federal Reserve Bank of New York; James Bullard, president of the Federal Reserve Bank of St. Louis; Thomas Hoenig, president of the Federal Reserve Bank of Kansas City; Sandra Pianalto, president of the Federal Reserve Bank of Cleveland; and Eric Rosengren, president of the Federal Reserve Bank of Boston.

http://news.yahoo.com/s/ap/20100406/ap_on_bi_ge/us_fed_minutes_glance

[ozymandius]

6. Atlantic City casinos struggling with economy

....
Atlantic City's 11 casinos have been struggling for more than three years now. Financial documents filed with the state this week show just how bad things have gotten.

The news was worst for the two casinos believed to be the most endangered: Resorts Atlantic City, which was taken over by its lenders in December, and the Atlantic City Hilton Casino Resort, which defaulted on its mortgage in July and could be headed for the same fate.

http://news.yahoo.com/s/ap/20100406/ap_on_bi_ge/us_struggling_casinos

[ozymandius]

7. U.S. stock futures drift before Bernanke speech, auction

LONDON (MarketWatch) -- U.S. stock futures drifted lower Wednesday ahead of a speech on economic challenges from Federal Reserve Ben Bernanke, as Treasury Secretary Timothy Geithner headed to Beijing to possibly address one of those challenges: the weak Chinese yuan.

S&P 500 futures fell 2.2 points to 1,183.60 and Nasdaq 100 futures fell 2 points to 1,976.70. Futures on the Dow Jones Industrial Average fell 9 points. ....

While Greek bond yields are surging, those of the U.S. 10-year (TNX 39.68, -0.26, -0.65%) are flirting around the 4% mark, leading the market to debate whether the rise is due to an improving economy or bond investors struggling to cope with surging supply, which on Wednesday includes $21 billion of 10-year notes.

Ahead of the auction, 10-year yields fell 2 basis points to 3.93%. ....

Bernanke will be speaking about economic challenges in a speech due for delivery at 1:30 p.m. Eastern, while speculation around the yuan will also be in the spotlight as a spokesman announced Geithner is heading to Beijing to meet Vice Premier Wang Qishan, who is responsible for economic affairs.

http://www.marketwatch.com/story/us-futures-drift-before-bernanke-speech-auction-2010-04-07?reflink=MW_news_stmp

[Demeter]

8. Rubin and Greenspan to face crisis inquiry

http://www.infowars.com/rubin-and-greenspan-to-face-crisis-inquiry/

Francesco Guerrera and Alan Rappeport
Financial Times
April 5, 2010

Robert Rubin, the former Treasury secretary who played a key role in financial deregulation during Bill Clinton’s presidency and who has kept a low profile since stepping down as a special adviser to Citigroup in January 2009, is to be questioned by the US financial crisis inquiry commission this week.

The committee, created by Congress and given sweeping powers in May 2009, is also to question Chuck Prince, the former chief executive of Citi, as well as Alan Greenspan, former chairman of the Federal Reserve Board.

The line-up suggests the committee is narrowing the scope of its investigation ahead of a final report to Congress in December.

Phil Angelides, the commission’s chairman, said he would ask Mr Greenspan, who led the Fed between 1987 and 2006, why the central bank did not curb subprime lending before the housing bubble burst.

[Demeter]

9. Greenspan, subprime lenders to get grilled

http://www.marketwatch.com/story/greenspan-subprime-lenders-to-get-grilled-2010-04-06

The special bipartisan commission established by Congress to examine the causes of the financial crisis resumes its hearings on Wednesday, taking on the heads of subprime-lending firms at the heart of the crisis and the government institutions responsible for overseeing those lenders.

The hearings begin on Wednesday with Alan Greenspan, the former chairman of the Federal Reserve, followed by current and former subprime-lending executives.
Traders trump CEOs on pay

Wall Street paid $140 billion in compensation for 2009. Although CEOs took a big pay cut, their real value may have been deflecting attention from their troops, who enjoyed the largest collective payday on record. Aaron Lucchetti discusses.

On Thursday, former Treasury Secretary and top Citigroup Inc. /quotes/comstock/13*!c/quotes/nls/c (C 4.29, +0.03, +0.70%) executive Robert Rubin will testify for the first time about the financial crisis at the congressional Financial Crisis Inquiry Commission, or FCIC.

The lineup on Wednesday includes Patricia Lindsay, a former executive for defunct subprime lender New Century Financial, which was the third-biggest creator of subprime loans between 2005 and 2007, according to the Center for Public Integrity. The company filed for Chapter 11 bankruptcy in April 2007 amid criminal probes into its lending practices. Three former top officers, not including Lindsay, now face charges of securities fraud for misleading investors.

Other testimony on Wednesday will come from former executives at Citigroup.

"Citigroup was largest beneficiary of government bailout by a long shot," according to John Dunbar, the primary author of report on the subprime meltdown released by the CPI, a nonprofit investigative journalism organization.

Citigroup not only received billions in bailout money (much of which it has repaid), but also the government also guaranteed $306 billion in loans and securities backed by residential mortgages -- assets that remain on the Federal Reserve's balance sheet.

"Everyone has sort of forgotten about these guaranteed assets," said Dunbar. "What's in that $306 billion pile of manure and what's it mean to the taxpayer?"

On Thursday, Citigroup's former chief, Charles Prince and Rubin, the former chairman of the company's executive committee, will testify.

Their testimony will be followed by that of the current and former heads of the Office of the Comptroller of the Currency, a bank-regulatory agency within the Treasury.

Former Fed Chairman Alan Greenspan. Reuters

Arthur Wilmarth, law professor at George Washington University, believes the OCC, along with the Office of Thrift Supervision, had a lot to do with why subprime loans became as big a problem as it did, by taking the power to supervise banks away from the states.

Lisa Madigan, the attorney general of Illinois, said in her testimony in January that the OCC was "particularly zealous in its efforts to thwart state authority over national lenders, and lax in its efforts to protect consumers from the coming crisis."

On Friday, the commission will hear from former executives of Fannie Mae /quotes/comstock/13*!fnm/quotes/nls/fnm (FNM 1.08, +0.02, +1.89%) and Freddie Mac /quotes/comstock/13*!fre/quotes/nls/fre (FRE 1.31, +0.01, +0.77%) , as well as the former directors of the government body charged with regulating the two problematic mortgage giants, also called government-sponsored entities, which were nationalized in emergency measures in 2008 due to their subprime-lending exposure.

Mark Zandi, chief economist at Moody's Analytics, which is not part of the ratings agency, said that this panel of witnesses presents an important issue.

"It's a very important question, going to whether it's government that's the main culprit here or whether it's the market. Everyone's culpable, but it's where the emphasis resides," Zandi added. "Hopefully this series of testimony provides a way for the commission to come to some sort of consensus on the GSEs."
The commission

The FCIC has six Democrat and four Republican members and has broad authority to issue subpoenas, hold hearings and get testimony, and also refer possible charges to prosecutors. It must report its findings and recommendations by Dec. 15.

The commission has so far collected 500,000 documents containing more than 2 million pages, according to FCIC spokesman Tucker Warren. Phil Angelides, the chairman of the FCIC, and Bill Thomas, the vice chairman, have conducted more than 200 interviews, Warren said.

So far the hearings have provided important dialogue on the financial crisis, but have not been too aggressive, GWU's Wilmarth said.

"The early hearings in January were actually better than I expected, but what we haven't seen yet are the Pecora hearings," he pointed out, referring to the rigorous investigation into Wall Street banking after the Great Depression led by prosecutor Ferdinand Pecora.

The commission's findings can wind up affecting legislation. The Senate version of the bill on financial-regulatory reform is still being finalized, and the Senate can use the findings from these hearings, the FCIC's Warren said, though he maintains the findings from the hearings will be used regardless of whether they produce federal law.

"Real reform does not happen with a stroke of a pen," he commented

[Tansy_Gold]

16. I'll bet they're just shakin' in their boots

Not.






Tansy Gold

[Demeter]

10. Looking for Uncle Sucker: Greece to target US investors with bond

http://www.freerepublic.com/focus/f-news/2487404/posts


The Financial Times ^ | 4/5/2010 | David Oakley in London and Kerin Hope in Athens



Greece will this month launch a multibillion-dollar bond in the US in its hunt for new investors, selling itself for the first time as an emerging market country as demand for its debt dwindles in Europe.

Morgan Stanley is being considered to handle the deal after Goldman Sachs’ plans to sell Greek bonds to US and Asian investors this year fell through amid rumours that the Chinese had shunned Athens’ debt.

George Papaconstantinou, Greece’s finance minister, would lead a roadshow to the US “after April 20” but in contrast with plans at the start of the year he would not travel on to Asia, one official said.

Greece is  seeking $5bn to $10bn from US investors to help cover its May borrowing requirement of about €10bn to roll over maturing debt and meet interest payments.

The issuance is Greece’s first in the US in nearly two years.

Athens is deliberately targeting emerging market investors, who only buy debt that pays high yields, as demand has dropped markedly on successive bond deals in Europe.

“Greece is looking to diversify its investor base with this issue, which means attracting emerging market funds as well as other investors,” one official said.

Greece attracted demand of more than €25bn for its first bond sale of the year in January, yet order books rose to only €6bn for its last bond syndication at the end of last month.

As Greece’s bond yields, or borrowing costs, are much higher than those of many developing world countries such as Brazil, Mexico and Poland, and about the same as Hungary, bailed out by the International Monetary Fund last year, analysts say it makes sense for Athens to tap emerging market funds.

“Greece is an emerging market and a Balkan country, and the fact that it’s a eurozone member is not a contradiction. It’s an issue of performance, not belonging,” Nikos Mourkogiannis, a London-based economist and restructuring consultant, said.

Greece’s 10-year benchmark yields are about 6.5 per cent compared with Brazil’s at 4.9 per cent, Mexico’s at 4.8 per cent, Poland’s at 5.5 per cent and Hungary’s at 6.6 per cent.

Greece last raised money in dollars in June 2008 when it issued $1.5bn of five-year notes.

[Demeter]

14. Greek rescue doubts fuel yields rise

http://www.ft.com/cms/s/0/2403d946-41a5-11df-865a-00144feabdc0.html

Greece’s borrowing costs rose to a record high on Tuesday amid concern in financial markets over the differences between eurozone countries on the details of any rescue.

The interest rate premium Athens pays over benchmark German bonds rose to more than 4 percentage points, its highest level since Greece joined the eurozone.

Greek 10-year borrowing costs touched a high of 7.161 per cent, up more than half a percentage point on the day, before closing at 6.995 per cent.

The eurozone and the International Monetary Fund agreed last month on the principles of an emergency loans package for Greece, should it be needed.

But differences emerged on Tuesday over how much Athens should pay for the support. While many countries are prepared to offer funds at rates substantially below market levels, Germany has demanded that Greece pay current market rates.

Yields on two-year Greek paper jumped more than 1.2 percentage points to a high of 6.48 per cent, an extreme single-day move for any sovereign debt.

The move was attributed in part to thin trading, but dealers warned that fears about Greece’s ability to borrow risked becoming self-fulfilling should the market volatility continue. Greece has covered its April funding, but needs to borrow another €10bn ($13.4bn) in May, according to the country’s Public Debt Management Agency.

“It is very difficult to price new issuance when the movements in the secondary market are so savage,” said Gary Jenkins, head of fixed income research at Evolution Securities. ” He called the situation a “poker game” between financial markets and the European Union, with investors demanding to see the precise terms of support for Greece.

One senior Greek banker said: “The issue of a European Union bailout looms large, but it doesn’t provide comfort because details are still lacking.”

A worsening macro-economic outlook is adding to Greece’s problems. The European Commission’s May forecast is expected to show the Greek economy shrinking this year by 2.5 per cent, against projections of a 2 per cent contraction.

Revised figures due to be announced this month by Eurostat, the EU statistical service, will show the 2009 budget deficit exceeded 13 per cent of gross domestic product. This compares with the earlier figure of 12.7 per cent which was used as the basis for this year’s budget projections. A finance ministry official said Greece was still on track to reduce this year’s deficit to 8.7 per cent of GDP.

[ozymandius]

21. Maybe, someday, the United States can become an 'emerging market' too.

:sarcasm: That is if we let the Banksters do even more to us as they did to Greece. One hitch though: where will we find a sucker for our bonds?

[Demeter]

11. BlackRock warns on distressed mortgages

http://www.ft.com/cms/s/0/aa5607f4-40dc-11df-94c2-00144feabdc0.html

BlackRock, a leading US bond investor, says banks will have to take their share of losses on distressed mortgages before it resumes large-scale purchases of new “private label” mortgage bonds, which are sold without government backing.

The position taken by Curtis Arledge, chief investment officer for fixed income at BlackRock, who oversees $580bn of investments, marks the latest development in an ongoing tussle over who should bear the costs of the US mortgage meltdown.

The return of private investors to the US mortgage market, now mostly financed through government-backed agencies, could have a big effect on mortgage rates and the speed of the housing recovery. Efforts to restore confidence among investors have so far failed.

Disputes between investors and banks have erupted over riskier second mortgages, also called home equity loans. Many US homeowners who are behind on their payments took out two or more home loans. First mortgages were typically packaged into securities and sold to investors, while second mortgages were often kept by banks.

These “second-lien” mortgages should take losses first, in theory. But the holders of such debts have not always agreed to absorb hits before “first lien” mortgage holders. US government programmes to restructure such debts have been slowed by these complications.

Mr Arledge told the Financial Times that BlackRock, which is primarily a first-lien investor, had focused on the interaction with second-lien holders in the US mortgage modification programmes. “If are done in such a way that is not fair ... it will be a real challenge for the mortgage market to move forward.”

Banks owning the second-lien mortgages also own many of the mortgage servicers that decide how losses are shared.

“In many cases the person owning the second lien is also servicing the mortgage and running the process,” Mr Arledge said. “There’s potential for conflicts of interest.”

[Demeter]

12. Dubai wealth fund buy-out head switches to Carlyle

http://www.ft.com/cms/s/0/93fcaf32-40da-11df-94c2-00144feabdc0.html

Carlyle, the US-based private equity group, has poached Eric Kump, head of Dubai International Capital’s European private equity team, leaving the sovereign wealth fund with a troubled portfolio and lacking funds for new deals.

Mr Kump will on Tuesday be unveiled by Carlyle as a new managing director in its European buy-out team, only two years after the 39-year-old was hired by DIC from Merrill Lynch to bolster its London office.

The London Eye

DIC recently sold a stake in Merlin Entertainments, which operates the London Eye attraction

The move is a blow for DIC, which has not completed a new European buy-out for more than two years, focusing instead on defending the €1.8bn ($2.4bn) it has invested in six deals since it was founded in late 2004, many of which are struggling.

Dubai’s recent debt crisis has left DIC’s European team with limited resources for new deals from its owner, Sheikh Mohammed bin Rashid al-Maktoum, Dubai’s ruler.

DIC has a $1.25bn loan maturing in June.

DIC recently raised about £100m ($152.8m) by selling two-thirds of its 17 per cent stake in Merlin Entertainments to the family behind Lego, a fellow investor in the theme park group that operates the London Eye observation wheel and Legoland attractions.

After the sale, Mr Kump stepped down from the board of Merlin, the best performing asset in DIC’s European portfolio. Many of DIC’s European deals were done using high levels of debt before Mr Kump, or most of the team that will remain, joined the sovereign wealth fund.

The proceeds of the Merlin sale have been used to support other companies in DIC’s European portfolio. These include Travelodge, the UK hotel chain; Mauser, the German packaging business; and Doncasters, the UK engineering group.

Its latest battle is with Oaktree Capital, the US distressed debt and turnround investor, for control of Almatis, the German alumina producer. Mr Kump sat on the boards of Mauser, Travelodge and Alliance Medical, the UK diagnostics group.

DIC declined to comment.

The move underlines how Carlyle is feeling more optimistic about the climate for new European buy-outs, adding another senior executive in London ahead of an expected rush of deals. The US private equity group targets European companies worth €300m to €5bn.

[Demeter]

13. Geithner urges EU fund rules rethink OR WHAT, TIMMY?

http://www.ft.com/cms/s/0/00591036-41bb-11df-865a-00144feabdc0.html

Tim Geithner, US Treasury secretary, this week made a fresh plea to European governments not to “discriminate” against US fund managers as they negotiate new rules for the hedge fund and private equity industries.

“I understand that the draft . . . would discriminate against third country funds and fund managers by denying them the opportunity to access the European Union single market via a passport approach, which would be limited solely to EU funds and fund managers,” Mr Geithner said in an April 5 letter to Alistair Darling, chancellor, that was obtained by the Financial Times.

“It is my hope that this provision will be revised to provide non-EU funds, fund managers and global custodians the same access as their EU counterparts and promote a single market,” Mr Geithner wrote.

The letter was also sent to Wolfgang Schäuble, Christine Lagarde, and Elena Salgado, the finance ministers of Germany, France and Spain.

Mr Geithner sought to highlight the contrast between the new EU regulations being discussed and financial reform legislation that is being supported by the US administration of Barack Obama and considered by Congress.

“Our regime will treat all advisers and funds operating in the US equally regardless of their origin – domestic or non-US,” he wrote. “I hope we can work together constructively to achieve strong financial regulatory reform.”

Last month, EU finance ministers abandoned efforts to reach a compromise deal over the proposals after a last-minute intervention by Gordon Brown, the prime minister. However, the talks are expected to begin again later this year.

The alternative investment fund manager directive, the first effort at drawing up EU-wide rules for the industry, has faced sharp criticism from within the sector. The most contentious part of the directive focuses on rules for non-EU funds and managers.

Mr Geithner, who had already expressed his concerns about the directive in a letter last month to Michel Barnier, the EU internal market commissioner, said this week that he was “happy to learn” the EU would “spend more time” studying the issue.

Andrew Baker, CEO of the Alternative Investment Management Association, said Mr Geithner’s latest “important letter illustrates the international concern that Europe’s AIFM directive has diverged from the Group of 20 path and will have a protectionist outcome”.

[ozymandius]

17. What leverage does Geithner have?

And what is at the core of this issue? Thee core issue concerns the matter of Goldman Sachs, Morgan Stanley, among others, selling Spain, Portugal and Greece exotic financial products, what were essentially junk. Then these banks bet against these countries' ability to pay the losing side of these bets with the banks being recipients of funds when these contracts broke in favor of the seller. The same issue involved municipalities that have gone bankrupt with the same toxic mechanisms.

So it seems Geithner is riding to the aid of the Banksters to preserve their opportunities to screw EU nations with their ultimately toxic financial products. It's the defining aspect of globalization: money making opportunities without the prospect of facing criminal charges in local jurisdiction. Being barred from dealing in those jurisdictions if about the worst that can happen to these Banksters.

[Demeter]

34. Let Them Eat Their Own Toxic Waste

The banksters have earned all the shunning and loss of business they can get.

The fact that Geithner would go out to do this on the public's dime frosts me off. He's not a shill for corporate crooks. Or he shouldn't be.

This is further proof that Obama is either pure ignorant, stupid, or corrupt. Or maybe all three. He's going to go down in history as the puppet of the Banksters if he doesn't clean house real fast and get some smarts and some knowledgeable people of integrity to help him out.

So Timmy is off to do Lassie's job and pull GS and Morgan and all out of the well they dug and threw their clients into? Lots of bad karma there.

We're Freaking Doomed.

[Po_d Mainiac]

33. What a novel approach

Restrict market access following bad (most likely illegal) behavior.

And this comes after all that AIG money that went to EU financial houses.

[Demeter]

35. That AIG Money Was Paying Off Banksters, Not a Bribe to Customers

and in the absence of any meaningful regulation of the banksters, only a fool would do further business with them.

No, they bought this consequence fair and square. Schadenfreude--it's what's for breakfast.

Maybe this means no bankster money for buying the next President?

[girl gone mad]

53. Too many of these firms view their clients as prey..

rather than valued partners. The question in board rooms is "how much can we get from them?" not "what can we do for them?"

[Demeter]

15. Beijing lays ground for renminbi shift

http://www.ft.com/cms/s/0/64c4bd04-4193-11df-865a-00144feabdc0.html

China has begun to prepare the ground publicly for a shift in exchange rate policy, days after the US Treasury said it would postpone a decision on whether to name China a “currency manipulator”.

A senior government economist told reporters in Beijing on Tuesday China could widen the daily trading band for the renminbi and allow it to resume the gradual appreciation it halted in July 2008 in response to the global credit crisis.

Ba Shusong, deputy director-general of the Financial Research Institute at the Development Research Center, the cabinet’s think-tank, said the timing of any shift depended on the pace of economic recovery in both the US and China.

Speaking at a press briefing organised by the Foreign Ministry, Mr Ba said the current peg was a temporary emergency measure that would be abolished at some point.

On Wednesday, the Chinese central bank set the mid-point of the renminbi’s exchange rate against the dollar at 6.8259, the currency’s highest level since May last year.

In recent months, Wen Jiabao, China’s premier, and other senior officials have repeatedly said the renminbi was not undervalued and China would not bow to foreign pressure over its value.

But the official tone has moderated, with Chinese officials suggesting privately that a proposal to adjust currency policy had already been submitted to the cabinet for approval.Renminbi

Both sides have made conciliatory gestures following months of strained relations, with the US delaying a decision on China as a “currency manipulator” and Beijing moving diplomatically in tandem with Washington on Iran and nuclear security.

“Some grand bargain between the US and Beijing appears to be in the works if it hasn’t already been struck,” said Stephen Green, an economist at Standard Chartered in Shanghai.

The US and Chinese Presidents “reached an important new consensus” during an April 2 telephone conversation, China’s vice foreign minister told reporters in Beijing on Wednesday.

The two men agreed both sides should “respect each other’s core interests and major concerns, handle disputes and sensitive topics appropriately and strengthen communication and cooperation,” Cui Tiankai said.

He declined to say whether the two leaders would discuss the renminbi exchange rate when they meet on the sidelines of a nuclear security conference in Washington next week, saying only that they would hold detailed discussions on major bilateral and international issues.

Tim Geithner, the US Treasury secretary, told India’s NTV in New Delhi on Tuesday that it was “China’s choice” whether to revalue the renminbi and he was confident Beijing would see a more flexible currency was in its own interest.

Goldman Sachs predicts Beijing will soon widen the daily trading band within which the renminbi fluctuates against the dollar from plus or minus 0.5 per cent to plus or minus 1 per cent and then allow it to gradually rise.

“Outside this base case, a relatively small and symbolic one-off revaluation remains possible but the likelihood of a more sizeable move remains negligible,” Goldman Sachs economists Helen Qiao and Yu Song said in a report.

The Chinese foreign ministry said China would adhere to three principles on currency policy: any change must be controlled, it must be Beijing’s own initiative and any shift must be gradual.

Despite repeated official assertions that the renminbi is not undervalued, most Chinese economists and economic officials acknowledge it is likely to strengthen over the long term.

[ozymandius]

18. Google, Skype Set Back as Ruling Puts Web in ‘No-Man’s Land’

April 7 (Bloomberg) -- Google Inc., Skype Technologies SA and companies that have pressed for free flow of Internet traffic suffered a setback when a court ruling undermined the government’s role in overseeing the Web.

In a decision yesterday, the U.S. Court of Appeals for the District of Columbia Circuit said the Federal Communications Commission didn’t have authority to regulate Internet management practices by Comcast Corp., the largest U.S. cable company.

Backed by companies including Google, FCC officials have pushed for rules that bar network owners such as Comcast and AT&T Inc. from limiting Web traffic. Regulators now will have to redouble efforts to assert control over the Internet, said Christopher Libertelli, director of North America government and regulatory affairs for Skype, a provider of calling via the Web.

“We’re trying to set up a framework so that the government has the tools to intervene should they find conduct that harms consumers,” Libertelli said. The decision puts “the Internet, a critical part of American business, into a no-man’s land.”

Comcast’s victory may intensify debate over the role network owners can play in managing information flow over the Web. Companies such as Comcast have said regulators shouldn’t burden them with more rules and that competition will ensure an open Internet. Advocates of so-called net neutrality, including Google, Skype and Amazon.com Inc., say Web service providers can’t be left to favor some kinds of traffic over others.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a2Whg1Zyi4rk&pos=6

---

Article 1, Section 8 of the U.S. Constitution will no doubt come into play here. This is the interstate commerce clause - one of the simplest, yet most powerful aspects of the Constitution that invests the regulation of interstate commerce in the hands of Congress. The means of interstate traffic is not specified, naturally, but the language is evermore relevant.

[DemReadingDU]

20. New College Graduates To Be Cryogenically Frozen Until Job Market Improves

From the Onion, lol

3/15/10
In a bold new measure intended to address unemployment among young professionals, lawmakers from across the political spectrum agreed on legislation Tuesday to subsidize the cryogenic freezing of recent college graduates until the job market recovers.

The bill, expected to swiftly pass in both houses, would facilitate the subzero preservation of any graduate of a two- or four-year educational institution. Sponsors of the initiative said that with the national unemployment rate at just under 10 percent, it only made sense for young job-seekers to temporarily enter a state of supercooled stasis.

"Finding employment is extremely difficult for today's college graduate," Sen. Kay Bailey Hutchison (R-TX) said. "Our current economy offers few options for the millions of young men and women desperate to join the workforce."

"Were we to freeze these graduates at the height of vigor and ambition, however, there's a chance we could revive them during a more prosperous time," Hutchinson continued. "When the economy finally bounces back—10, 20, even 30 years from now—we'll have an entire generation thawed out and ready to contribute."

The Frozen For Their Future Act reportedly calls for the installation of thousands of cryogenic tanks at college commencement ceremonies around the country. Upon receiving their diplomas, newly minted graduates will immediately make their way to preservation stations where their hearts will be artificially stopped using electroshock or a potassium-salt solution. Once a graduate's blood is drained and replenished with an anti-crystallizing fluid, they will be submerged in liquid nitrogen, a process that will, in effect, put them into suspended animation until key sectors of the American economy such as real estate and information technology have rebounded.

more...
http://www.theonion.com/articles/new-college-graduates-to-be-cryogenically-frozen-u,17034/

[InkAddict]

26. Why should new grads get all the legislation? Should this pass,

I'll be on the phone to my congress critter, asking him/her to draft and sponsor the Kenny Lay Caribbean Cruise Act for the 50+ crowd that can't find work either. A year or two of Rum and Reggae and chest(to chest)-pillowing should find pre-seniors rested, de-stressed, bored even, and ready to take on just about any project.

[tclambert]

50. Yes, it should apply to all jobless persons.

I made this exact "modest proposal" during the Reagan administration. "Freeze the Poor" it would be called. The plan would be to defrost them when we had a labor shortage, if ever. In other words, never, but don't tell them! Meanwhile (or forever) they will be off the welfare rolls.

While some of you probably think the logical place to build the cryo-facility would be Alaska, as the cold climate would offer energy savings and a natural safety backup, I recommended placing the facility in a warm southern state (Texas possibly) as a reward for loyal political support. It would have been a win-win-win situation for the Gipper. First, it would provide tangible bonuses to the state and congressional districts in the form of jobs and federal money. Second, most of the poor vote Democratic anyway, and frozen Democrats equals a voting advantage for the Republicans. Thirdly, if the power should go out, and the warm southern climate leads to a catastrophic "thawing" event, well, now remember, that's just jobless Democratic voters melting away.

They thanked me for my letter, but I think it was just an automated response.

I should've resubmitted it to Dick Cheney. I bet he would have gone for it.

[Festivito]

23. Debt: 04/05/2010 12,786,559,060,352.58 (UP 23,811,860,835.83) (Mon)

(Up a lot. 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)
= 8,315,716,104,736.67 + 4,470,842,955,615.91
UP 21,628,544,775.26 + UP 2,183,316,060.57

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 $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 309,169,758 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 $41,357.73.
A family of three owes $124,073.19. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 10,993,415,045.45.
The average for the last 30 days would be 8,061,837,700.00.
The average for the last 31 days would be 7,801,778,419.35.
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$/day.
There were 127 reports in 187 days of FY2010 averaging 6.90B$ per report, 4.69B$/day.
Above line should be okay

PROJECTION:
There are 1,021 days remaining in this Obama 1st term.
By that time the debt could be between 14.2 and 20.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
04/05/2010 12,786,559,060,352.58 BHO (UP 2,159,682,011,439.50 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 +0,876,730,056,840.80 ------------* * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,711,264,549,448.62 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ---
03/29/2010 -000,032,502,739.57 ---- Mon
03/30/2010 +000,146,146,107.03 ------------********
03/31/2010 +089,964,337,654.53 ------------**********
04/01/2010 +004,832,827,050.45 ------------*********
04/02/2010 -000,783,098,135.53 ---
04/05/2010 +021,628,544,775.26 ------------********** Mon

163,075,247,830.10 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=4333769&mesg_id=4333825

[Festivito]

59. Debt: 04/06/2010 12,792,967,119,405.50 (UP 6,408,059,052.92) (Tue)

(Up a little. 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)
= 8,315,962,211,453.58 + 4,477,004,907,951.92
UP 246,106,716.91 + UP 6,161,952,336.01

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 309-Million person America.
If every American, man, woman and child puts in $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 309,178,398 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 $41,377.3.
A family of three owes $124,131.9. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 32 days.
The average for the last 23 reports is 10,794,051,741.43.
The average for the last 30 days would be 8,275,439,668.43.
The average for the last 32 days would be 7,758,224,689.16.
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$/day.
There were 128 reports in 188 days of FY2010 averaging 6.90B$ per report, 4.70B$/day.
Above line should be okay

PROJECTION:
There are 1,020 days remaining in this Obama 1st term.
By that time the debt could be between 14.2 and 20.7T$.
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)
04/06/2010 12,792,967,119,405.50 BHO (UP 2,166,090,070,492.42 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 +0,883,138,115,893.80 ------------* * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,714,603,256,921.48 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ---
03/29/2010 -000,032,502,739.57 ---- Mon
03/30/2010 +000,146,146,107.03 ------------********
03/31/2010 +089,964,337,654.53 ------------**********
04/01/2010 +004,832,827,050.45 ------------*********
04/02/2010 -000,783,098,135.53 ---
04/05/2010 +021,628,544,775.26 ------------********** Mon
04/06/2010 +000,246,106,716.91 ------------********

163,079,840,762.35 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=4335043&mesg_id=4335097

[Doctor_J]

24. Question for money-savvy folks

If my home is still depreciating, should I be paying extra on my mortgage? we will be taking on a renter and are thinking of putting all of the rent toward paying down the principal (we don't need it for monthly expenses). Our area is still having market problems. Not in negative equity yet, though. Our mortgage is 5.125% fixed.

[ozymandius]

27. Dear Doctor_J,

It sounds like you are in a pretty good position from the information you have provided. However, rendering advice is a situation that we tend to avoid here. I am sure that some who frequent the SMW would be able to answer your question fully and reliably. Instead, I would recommend that you look to other sites (some of which are found in the econ blog links) where you would be able to vet any information you receive. The Big Picture often deals with this kind of scenario. So does Calculated Risk as it is heavily skewed toward mortgages and real estate issues.

Thank you for asking, nonetheless. It is indicative of a great amount of confidence in this thread and those who post here.

Best wishes,

ozymandius

[Po_d Mainiac]

36. Look at it this way

If you are paying interest @ 5.125%, the extra money you put into principal payments is earning that much interest.

Is your house a place to raise a family and hang your hat? In other words, is it a home?
Is there any danger of your mortgage going underwater?

As a rule, people pay around 3X the purchase price of a home, if they finance with a 30 yr note.

[Roland99]

37. I concur w/ozy re: looking elsewhere for more specific advice. One place I'd start with is here >>>>

http://creditboards.com/forums/index.php?showforum=9

[AnneD]

45. Doctor J .......

Ozy is right. We can't give advice but I have found from my experiences that the money I have saved by saving interest really adds up and fattens my household bottom line. The interest that I saved on my credit card debts helped me pay thing off sooner. It works for mortgages. Some folks will argue about the tax deduction, but how much better can you sleep in a paid for house? How much money can you save if you have a paid for house? Ben Franklin said 'a penny saved is a penny earned' but if he were around today I am sure he would have said interest rate avoided is dollars saved.

Building wealth is not just earning a big salary but spending shrewdly (living on less than you make). To take on debt is to take on risk, and at this time and this enviroment I am all for avoiding risk.

[tclambert]

51. What alternatives do you have for the money?

That's always the key question. If your plan B is to blow it all on bubble gum and hair ribbons, paying down your mortgage sounds like a good idea. However, if you have investment opportunities that will pay more than 5.125% return, you might want to weigh those options. Several companies pay more than 5.125% in dividends. However, you need to judge the risks of any such investment versus the risks of a real estate investment. Either could lose equity. This website: http://www.dividendstocksonline.com/ under the tab "Dividend Yield" will give you a list of companies paying various levels of dividends. Hint: A higher dividend payout usually means higher risk.

Anybody you talk to, anybody, especially the professional advice-givers, will eventually put the monkey on your back to use your own judgment on evaluating the risks. That's why we can't give you any official advice here on this site.

My wife hasn't settled on what she wants to do with this year's IRA contribution. In the meantime, while she keeps her ears open for a better investment, she temporarily parked it in New Zealand Telecom (symbol NZT). It's a phone company in New Zealand. They're profitable, maybe have a little growth potential, but for right now, all we cared about was that they are paying 10.7% dividends. We figured that beats the broker's interest rates on cash, and we hope it doesn't go bust before we find something better. Part of her reasoning for this is she doesn't want to invest in anything I've already invested in. She doesn't want all our eggs in one basket. So even if she found a really sweet-looking investment, she wouldn't want to risk everything on one bet.

To clarify: that is an example, not advice. And you probably shouldn't take advice from people like me, anyway. I lost a fortune in the market during the 2000's. Plus, you know, the whole "stranger on the internet" thing.

Good luck!

[Demeter]

55. If You Aren't Interested in Selling--Who Cares what the Price Does?

Paying it off faster makes it cheaper over the long run--if you are a long-run planner.

Because house prices are sinking in Michigan, so are local property taxes....

[charlie]

25. Sales of another ticking-bomb "financial instrument" on the rise

Step-up bonds. If a borrower is on sound footing, he owes less. If his finances go wobbly, he owes more.

Markets are over-fond of protection, with most of it is wearyingly pro-cyclical. Way back when it was portfolio insurance, but now "step-up bonds" are on the rise.

These nifty things cause interest rates to increase as a result of credit downgrades. For example, Lafarge has step-up bonds whose coupons rise by a predetermined 1.25-percent if the cement company's credit is downgraded to junk. Nice protection, huh? The trouble is, of course, that a downgrade usually reflects worsening company financial health, which makes increasing the interest payments sort of like giving a good, hard shove to someone who has wandered close to a cliff's edge.

Here's the latest on investor ardor for such things:

Bonds with built-in protection against rating cuts are making up a record share of debt issues as investors hedge against a slowdown in the economic recovery.

...Sales surged to $37.3 billion in March, or 12.4 percent of all debt issued, according to data compiled by Bloomberg. Most of the notes are sold in the U.S., where almost half of bonds rated as so-called junk or on the cusp of non-investment grade include the protection.

...Sales of the bonds globally are up from $16.6 billion in February and $8.4 billion a year ago, according to Bloomberg data. In the U.S., such borrowers sold a record $32 billion of the debt last month, or 46 percent of all bond issuance, the data show.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a8lsONr2.Qq0&pos=3

http://paul.kedrosky.com/archives/2010/04/step-up_bonds_a.html

[ozymandius]

28. Thank you for posting this here.

It sounds like past credit card language has found a new home. Increasing the interest rate (or in this case - the yield on a bond) amounts to jacking up the rate on a credit card when the carrier is late on the bill. This has the net effect of speeding up the company's demise.

[charlie]

38. Yep, seems so

Plus, they're going to give the rating agencies that gold-plated the CDO swill they bought for a decade the power to pull the trigger on bond issuers. Off-loading due diligence for anything that looks like "automation" is still the best way to sleep soundly at night, I guess.

[Demeter]

29. Very Good Reason to Believe Home Prices Will Collapse By Peter Schiff

http://www.informationclearinghouse.info/article25099.htm

The latest housing initiative announced today (March 27, 2010) by the Obama Administration draws the U.S. government and, by proxy, all taxpaying Americans, further into the inescapable quagmire of a devastated real estate market.

By transferring more underwater mortgage balances onto the public books, the plan puts taxpayers on the hook for further losses if housing prices continue to fall. Given the massive support for real estate already afforded by record-low interest rates and massive federal tax and policy incentives, there are very good reasons to believe that home prices will indeed collapse when these crutches are removed. Recent spikes in long-term interest rates warn of this prospect.

If the Administration had allowed losses to fall where they rightfully belong, namely on those who foolishly loaded up on toxic mortgage bonds, then the housing market would have already found its true clearing level. Instead, every measure is working to prolong and delay the ultimate reckoning, while setting up taxpayers as the patsy. Given the horrendous government deficit projections for the next several years, any losses incurred by the government mortgage portfolio may add a critical stress on America's fiscal viability.

In addition, the moves add even more incentives detrimental to economic growth. By targeting benefits toward unemployed homeowners, or those who are delinquent in mortgage payments, the program will encourage some mortgage holders to defer job-hunting and miss payments. Also, in offering loan-balance reductions, the program makes no distinction between homeowners who naïvely overpaid during the speculative peak and those who willfully put themselves underwater by taking advantage of home equity loans on existing mortgages. In short, these policies reward profligacy and penalize prudence.

The longer the government continues to distort the underlying economics of the real estate market, the longer it will take for the sector to heal itself – and the longer the sickness will infect the broader economy.

[Ghost Dog]

30. Europe Economy Unexpectedly Stalled in Fourth Quarter (Bloomberg)

April 7 (Bloomberg) -- Europe’s economy unexpectedly stagnated in the fourth quarter as companies cut spending more than previously estimated.

Gross domestic product in the 16-nation euro region remained unchanged compared with the third quarter, when it rose 0.4 percent, the European Union’s statistics office in Luxembourg said today. It had previously reported a fourth- quarter expansion of 0.1 percent. Corporate investment dropped 1.3 percent instead of the 0.8 percent estimated earlier.

The European economy is now showing signs of rebounding from its end-of-year relapse as the global recovery prompts companies to step up investment and offsets some concerns that Greece’s fiscal crisis will hurt the euro region. While unemployment is at an 11-year high, economic confidence improved in March and the region’s services and manufacturing growth accelerated to the fastest pace since August 2007.

/... http://www.bloomberg.com/apps/news?pid=20601083&sid=aAd8BVQUpgQg

[Ghost Dog]

31. EU Economy -Euro Area GDP Stable, EU27 GDP Up 0.1% (EU Commission)

Source: European Commission

Euro area1 (EA16) GDP was stable and EU271 GDP increased by 0.1% during the fourth quarter of 2009, compared with the previous quarter, according to second estimates from Eurostat, the statistical office of the European Union. In the third quarter of 2009, growth rates were +0.4% in the euro area and +0.3% in the EU27.

In comparison with the same quarter of the previous year, seasonally adjusted GDP declined in the fourth quarter of 2009 by 2.2% in the euro area and by 2.3% in the EU27, after -4.1% and -4.3% respectively in the previous quarter.

In the fourth quarter of 2009, among Member States for which seasonally adjusted GDP data are available, Estonia (+2.5%) recorded the highest growth rate compared with the previous quarter, followed by Slovakia (+2.0%) and Poland (+1.2%).

Variation in components of GDP

In the fourth quarter of 2009, household2 final consumption expenditure was stable in both the euro area and the EU27 (after -0.1% in both zones in the previous quarter). Investments fell by 1.3% in the euro area and by 1.6% in the EU27 (after -0.9% and -0.6%). Exports increased by 1.9% in both zones (after +2.9% and +2.7%). Imports increased by 1.3% in the euro area and by 1.6% in the EU27 (after +2.9% in both zones).

/... http://www.egovmonitor.com/node/35331

[ozymandius]

32. Greetings, Ghost Dog!

I've missed seeing your contributions of late. How are the overall conditions in Spain for you?

[Ghost Dog]

44. Spain is still, in its own way, socially stable, Ozy, largely due to Social Security

and the government's stimulus spending and moderate income and consumption tax increases (and of course the large 'cash economy'). But it's a fine balancing act on a knife-edge, I guess.

Question is, economically-speaking, are we now close to the bottom of an L-shaped recession, or is this just another step on a staircase leading further down. This depends largely on international circumstances.

Nationally, the (social-democrat) government is pushing very hard to implement its "Sustainable Economy" policy, negotiations on and participation in which the often deeply-corrupt neocon right-wing opposition has mostly rejected (their answer to everything: make it easier (cheaper) for employers to fire employees). This policy emphasises education, R&D, new (eco, renewable energy, digital) technologies, continued essential infrastructure development (the country has become very modern in recent years - high-speed trains, highways, electric and natural gas grids, schools, hospitals (in the latter two cases some private as well as public), a new plan to roll out electric transport facilities...) and, yes, a revision of employment contract laws to discourage temporary employment contracts (which are widely abused) and encourage long-term contracts (by reducing to a degree the compensation employers must pay to ex-employees), and a salary freeze on government employees and other large reductions in government spending. Things would be a lot more hairy were the right-wing in power.

Income from tourism has fallen (officially) maybe 10% - 12% year-on-year, better than feared. The number of tourists arriving this spring from Eurozone countries (but not from UK) has actually risen some. The tourism sector is a large although irregular, seasonal employer. The big problem has been the construction bubble, with very large numbers of construction workers unemployed and with very large numbers of newly-built homes and associated business and commercial districts standing empty. It is not clear that the banks are accounting correctly for predictable future losses there - with non-performing loans in the sector running well over 10% now, and with home prices, especially in the major cities, having so far fallen less than expected at maybe 20% or so...

A plus side to the construction industry, though, involves the large Spanish multinationals which are by now very experienced in building, maintaining and operating large infrastructure projects and which continue to win large international contracts all over the world. And quite a few manufacturing businesses are doing quite well, such as not only trains and wind-turbines but also the likes of jet-engine technologies and aerospace (and space) technologies generally, pharmaceutical R&D and increasingly sophisticated horticultural systems.

In this last area, agricultural and especially horticultural products are apparently still strong, although there is increasing competion from neighboring Morocco. Morocco, the Alauite Kingdom, BTW, having steered well clear of "anglo-saxon" financial shenanigans during all these years, claims 7.8% economic growth in Q4 2009, a claim which, from what I have seen and heard on the ground during my last two brief visits to Marrakech, reviving my rusty French ear and tongue, I can quite believe. Check it out.

If I've been quiet, it's not because I don't follow the thread (and much else at DU and elsewhere :crazy: - need above all to keep a close eye on your trials and tribulations over there) every day, but because I'm away from the desk, out and about attempting to keep physically and mentally fit. And because, in the midst of so much, um, propaganda I reckon its a good idea to weigh up the evidence and sometimes wait and see, before relaying what may likely be false or twisted or self-interested information or voicing what may be ill-grounded opinions.

On that last note, I do find it fascinating to observe the "anglo-saxon" so-called economists and their media shills pointing the finger at Europe, China, anywhere really rather than, still, at themselves. While I'm sure most people around the world would not like to see US-UK fall a long way down, this is, after all, economic war.

Take it easy. Ciao from the 'fortunate isles' (gotta go now) :hi:

[Demeter]

61. Sounds Like Heaven, Compared to Michigan

I was quite proficient in Spanish at one time--even dreamed in it...time to brush up?

[Dr.Phool]

39. Greenscum: I was wrong 30% of the time.

http://tpmlivewire.talkingpointsmemo.com/2010/04/greenspan-i-was-wrong-30-of-the-time-video.php?ref=fpblg

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

At least. And they were some major fuck-ups too, Al.

[ozymandius]

40. "And there are an awful lot of mistakes in 21 years"

This is the error rate by his admission - fer cryin' out loud! A 30% error rate, combined with the magnitude of each error during his tenure at the Fed, should cement his legacy as a failure. He never should have been Fed chairman.

[Demeter]

42. What's worse, is it was the same error, over and over again

Meaning he didn't learn anything on the job.

[mbperrin]

43. k&r nt

[tclambert]

52. So, there's a 30% chance he was wrong when he calculated that 30% error rate?

Wait, that would mean . . . Gah! It does not compute. Norman, correlate!

[Demeter]

56. I am not programmed to respond in that area.

[Festivito]

60. But, in that 30%, he badly directed 600% of the world economy.

.. into derivatives.

Kind of like Dr. Strangelove: Gee I only made one mistake. What's my percentage though?

[girl gone mad]

46. Finally a little volatility.

The Fed just came out with some very ugly consumer credit numbers, and the Dow is now down about triple digits.

On a sequential basis, consumer credit fell 5%, way worse than expected.

Read more: http://www.businessinsider.com/the-market-is-tanking-on-the-weak-consumer-credit-number-2010-4#ixzz0kRcLtSkk

[DemReadingDU]

47. People aren't using their credit cards to buy stuff, but

I'm thinking some people stopped paying their mortgage payments and are in default, but the money they previously used for their house payment, is now used as cash to continue their spending, at least at restaurants. People got to eat.

:shrug:

[Tansy_Gold]

48. Or. . . .

They're using the cash they're not spending on the mortgage to pay down the past due balance to keep the electricity on, keep the kids in school clothes, make repairs to the car they can't afford to replace, etc.

If your mortgage payment is $1500 out of $5000 monthly income and you lose your job and your income goes down to $2000, cutting out the mortgage payment isn't replacing your lost spending power. And the loss of spending power, after all, is what put people into default in the first place.



Tansy Gold, looking for the power to pull some more weeds

[DemReadingDU]

49. good points, n/t

[Tansy_Gold]

58. I know this because. . . .

. . . . it's exactly what has happened to some neighbors.

That's the value of all our anecdotes. they put humanity into the numbers. do our anecdotes represent trends? No, probably not. But the numbers were what greenscum and his quants touted, it's all reducible to a formula. Only at the end of the day, the numbers didn't work out the way they were supposed to. The checkbook didnt balance and suddenly some people (not all) began to realize they'd been scammed.

Someday, enough of them will realize that and we'll see some changes. But it hasn't happened yet.




Tansy Gold

[Demeter]

62. That day gets exponentially closer, though

This must be take your family to the dentist for expensive work month.

I had a "surprise" root canal Monday, the Younger Kid has an impacted wisdom tooth keeping her up nights with pain...can't wait to see what her sister comes up with.

And then there's their grandfather--too scared to get his hip joints replaced and too stubborn to accept the fact that if he wants free family care, he's going to have to move towards one of us, not expect us to drop all of our lives and go to Virginia, the Confederate state where we've never lived and have no resources, on our own dime, for an indefinite period of time...

Never marry a Polish man. That's all I can say. It killed my mother, I think.

[Demeter]

57. Finally, a little reality!

Can't wait to see what happens Monday.