STOCK MARKET WATCH, Tuesday June 15

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday June 15, 2010

AT THE CLOSING BELL ON June 14, 2010

Dow... 10,190.89 -20.18 (-0.20%)
Nasdaq... 2,243.96 +0.36 (+0.02%)
S&P 500... 1,089.63 -1.97 (-0.18%)
Gold future... 1,223 -1.90 (-0.16%)
10-Yr Bond... 3.27 +0.01 (+0.18%)
30-Year Bond 4.20 +0.01 (+0.22%)

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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:
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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 Export Prices ex-ag. May
Briefing.com NA
Consensus NA
Prior 1.4%

08:30 Import Prices ex-oil May
Briefing.com NA
Consensus NA
Prior 0.5%

08:30 Empire Manufacturing Survey Jun
Briefing.com 20.0
Consensus 20.0
Prior 19.11

09:00 Net Long-Term TIC Flows April
Briefing.com NA
Consensus NA
Prior $140.5B

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

[UpInArms]

38. U.S. June Empire State index 19.6 vs 19.1 May

U.S. June Empire State index 19.6 vs 19.1 May
8:30 a.m. Today

[UpInArms]

39. U.S. Import prices fall 0.6%

U.S. import prices falling 0.6% in May after a revised 1.1% gain in April

http://www.marketwatch.com/story/us-stock-futures-hold-gains-after-economic-data-2010-06-15-840550

(no clear reporting anymore?)

[ozymandius]

2. Oil hovers above $75 as investors eye demand

SINGAPORE – Oil prices hovered above $75 a barrel Tuesday in Asia as traders mulled whether the recovery of the global economy is strong enough to sustain improving crude demand.

Oil prices have traded in a $70 to $80 range so far this month after dropping from $87 to $64 last month amid fears Europe's debt crisis could hurt global economic growth.
On Monday, credit rating agency Moody's lowered its rating on Greece's debt to "junk" status.

But oil traders have taken heart in recent weeks from a fall in U.S. crude inventories, which suggests demand is improving.

Analysts expect another drop of 1.8 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos., when the American Petroleum Institute announces its weekly supply data late Tuesday and the Energy Department's Energy Information Administration releases its report on Wednesday.

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

[ozymandius]

3. With Massive Stimulus Waning, Expansion Faces Fiscal Riptide

The other side of stimulus is upon us. After a decade-long descent into a deep fiscal valley, the U.S. economy has begun the first leg of a daunting climb, relying on muscles that are weak from disuse.

So while the initial slope may not appear overly steep, the climb is likely to hurt.

A spurt in retail sales over the first four months of the year coincided with dispersal of an extra roughly $30 billion in refundable tax credits for those without tax liability.

In recent months, an estimated 1 million jobless have exhausted extended unemployment benefits of up to 99 weeks.

Tax credits for home purchases of $8,000 for first-time buyers and $6,000 for move-up buyers expired at the end of April.

http://news.yahoo.com/s/ibd/20100614/bs_ibd_ibd/537292

[Demeter]

14. What Boloney

The US isn't CLIMBING anywhere.

[ozymandius]

4. Dollar slips against euro as economic hopes rise

NEW YORK (AFP) – The dollar slipped against the euro Monday as renewed confidence in the global economic recovery lured investors away from the relative safety of the US currency.

The European single currency rose to 1.2223 dollars at 2100 GMT from 1.2106 dollars in New York late Friday.

Against the Japanese unit, the dollar slipped to 91.56 yen from 91.61 yen.

The euro found support as rising stock markets helped bolster risk appetite, with investors ready to take on riskier assets on the view that the global economic recovery remains on track.

Outside the eurozone, the British pound rallied after the new government cut state borrowing forecasts, which helped to offset much lower growth estimates.

http://news.yahoo.com/s/afp/20100614/bs_afp/forexus

[Po_d Mainiac]

9. This is getting too predictable

A central bank (Swiss?) buys euros
Traders shorting the EURO get hammered as it rises
EURO up = dollar down = market up…So the computers think
Bonds rise
People with a brain go WTF?
Idiots in M$M claim rise in stocks due to ????? (Insert any dumb shit u want here)
At some point the markets “correct” everything back to previous Friday
Wash/rinse/repeat

There will be a disconnect at some time in the future between the currency & equity markets. :popcorn:

[Demeter]

17. And Oil

You forgot to mention commodities. It's all programed trading, based on statistics and not reality.

[Po_d Mainiac]

28. True most of time...but there have been a few deviances n/t

[Dr.Phool]

72. And the delerium continues this morning.

Stocks go up, up, up.

Meanwhile, the entire Gulf Coast economy is getting ready to tank. The perps are still running the investigation, and controlling access to information. BP is offering people with claims, peanuts for compensation.

And stocks go up, up, up.

[ozymandius]

5. Fed will take its time before exit: SF Fed paper

WASHINGTON (Reuters) – The U.S. Federal Reserve's exit from its ultra-low interest rate policy will take a "significant period" of time, a San Francisco Fed economist said in a paper published on Monday.

Downplaying the inflationary implications of the Fed's unconventional easing measures, Glenn Rudebusch, the regional central bank's associate director of research, indicated the Fed is not inclined to tighten policy any time soon.

In response to the most severe financial crisis in generations, the Fed not only chopped interest rates down to almost zero but also undertook a wide array of emergency steps, including large scale purchases of long-term Treasury and mortgage bonds.

In the process, outstanding Fed credit to the banking system, known in the markets as the central bank's balance sheet, expanded sharply to around $2.3 trillion.

http://news.yahoo.com/s/nm/20100614/bs_nm/us_usa_fed_exit

[Po_d Mainiac]

12. The Fed's mission is to conduct

* conducting the nation's monetary policy by influencing the monetary and credit conditions in the economy in pursuit of maximum employment, stable prices, and moderate long-term interest rates
* supervising and regulating banking institutions to ensure the safety and soundness of the nation's banking and financial system and to protect the credit rights of consumers
* maintaining the stability of the financial system and containing systemic risk that may arise in financial markets
* providing financial services to depository institutions, the U.S. government, and foreign official institutions, including playing a major role in operating the nation's payments system

http://www.federalreserve.gov/aboutthefed/mission.htm

.................
But who gives a ratz ass what they are supposed to do?

[ozymandius]

13. They have drifted outside their chartered scope since 2007.

This is after they abandoned their charter as a regulator from 1983 to 2007. Arguably, this is still the case.

[Po_d Mainiac]

26. Goes back well before 07

The inflation that occurred with thew last 2 bubbles should have been addressed with credit tightening..falls under that stable pricing thingy in the first para of the statement.

But that would have made the last couple years sooo boring, along with the foreseeable future.

[Demeter]

36. Reagan and Greenspan--The Two Stooges

or as Oliver Hardy would say--Another fine mess you've gotten me into!

[ozymandius]

16. GSEs: $1 Trillion Dumping Ground for Bad Bank Loans

....
How much is the worst case scenario for the ongoing bailout of the banking sector, plus Fannie’s and Freddie’s own screw ups?

If everything goes precisely wrong, taxpayers are potentially on the hook for another $1 trillion bailout:

The cost of fixing Fannie Mae and Freddie Mac, the mortgage companies that last year bought or guaranteed three-quarters of all U.S. home loans, will be at least $160 billion and could grow to as much as $1 trillion after the biggest bailout in American history.

Fannie and Freddie, now 80 percent owned by U.S. taxpayers, already have drawn $145 billion from an unlimited line of government credit granted to ensure that home buyers can get loans while the private housing-finance industry is moribund. That surpasses the amount spent on rescues of American International Group Inc., General Motors Co. or Citigroup Inc., which have begun repaying their debts.

Its not a coincidence that many of these banks are finding the capital to pay back their bailout loans. The Obama administration is continuing one of the more horrific policies of the Bush administration: Using the GSEs as a back door bailout for the rest of the banking sector: These banks are selling their garbage to the GSEs — and according to some anecdotal evidence, are getting pretty close to full boat (100 cents on the dollar) for these bad loans.

That trillion dollar number has a number of challenging assumptions in it. It assumes a large downleg in housing prices, a continuing foreclosure surge, and ongoing unemployment.

http://www.ritholtz.com/blog/2010/06/gses-1-trillion-dumping-ground-for-bad-bank-loans/

[florida08]

31. exactly

These banks are selling their garbage to the GSEs

All I hear from the gopstoppers is ridicule of Fannie and Freddie..never mentioning what the banksters are doing to destroy them.
Why in the world are they getting full value for scams is what I'd like to know. It's the same way with Medicare. The crook Rick Scott running for governor here was involved in one of the biggest Medicare scams ever. His company forced him out with a nice care package while it ended up paying almost 2 billion in fines. And he's ahead in the polls.

Why isn't this happening with the banks? Sue these people and recoup some of the money? I don't get it.

[Demeter]

18. the Hardest Part About Riding a Tiger

Is surviving the "getting off" phase.

[Festivito]

6. Debt: 06/11/2010 13,041,208,520,697.17 (DOWN 196,823,276.27) (Fri)

(Down a little. Good day.)

(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)
= 8,572,070,185,728.23 + 4,469,138,334,968.94
DOWN 35,173,484.80 + DOWN 161,649,791.47

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 $3.23 THAT'S 1B$, and $3,231.50 makes 1T$.
A family of three: Mom, Dad, Child: $9.69, ABOUT TEN BUCKS for a 1B$ 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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,453,777 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $42,142.67.
A family of three owes $126,428.01. (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 5,002,308,336.53.
The average for the last 30 days would be 3,668,359,446.79.
The average for the last 31 days would be 3,550,025,271.09.
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$/day.
There were 174 reports in 254 days of FY2010 averaging 6.50B$ per report, 4.45B$/day.
Above line should be okay

PROJECTION:
There are 954 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
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)
06/11/2010 13,041,208,520,697.17 BHO (UP 2,414,331,471,784.09 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 +1,131,379,517,185.40 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,625,801,274,695.56 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/21/2010 +000,263,393,058.28 ------------********
05/24/2010 +000,371,674,396.55 ------------******** Mon
05/25/2010 +000,937,216,055.27 ------------********
05/26/2010 +001,057,190,066.84 ------------*********
05/27/2010 +015,241,764,354.27 ------------**********
05/28/2010 -000,294,414,430.12 ---
06/01/2010 +078,359,726,143.31 ------------********** Tue
06/02/2010 +000,523,171,733.61 ------------********
06/03/2010 +004,027,515,403.86 ------------*********
06/04/2010 +000,194,136,067.09 ------------********
06/07/2010 +000,055,958,918.33 ------------******* Mon
06/08/2010 -000,061,366,300.19 ----
06/09/2010 +000,374,218,915.72 ------------********
06/10/2010 -005,787,434,254.89 --
06/11/2010 -000,035,173,484.80 ----

95,227,576,643.13 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=4425803&mesg_id=4425855

[hamerfan]

10. Thank you, Festivito!

Your Debt posts are really scary, but thank you for keeping this out in the public eye. The scariest line comes from one of your links at the bottom of your post:
"The National Debt has continued to increase an average of $4.09 billion per day since September 28, 2007!"
Impossible to imagine that amount....

[Festivito]

99. And, that's down from when W** Bush held the office.

Rather than impossible to understand, 4B$/d is about $16 a day. That's a lot.

What could you give up each and every day, year after year, in order to save sixteen dollars a day.

[Festivito]

98. Debt: 06/14/2010 13,043,148,269,336.48 (UP 1,939,748,639.31) (Mon)

(Up a little. Good day.)

(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)
= 8,572,307,301,854.94 + 4,470,840,967,481.54
UP 237,116,126.71 + UP 1,702,632,512.60

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 309-Million person America.
If every American, man, woman and child puts in $3.23 THAT'S 1B$, and $3,231.29 makes 1T$.
A family of three: Mom, Dad, Child: $9.69, ABOUT TEN BUCKS for a 1B$ 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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,473,716 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $42,146.22.
A family of three owes $126,438.67. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 31 days.
The average for the last 20 reports is 5,822,924,454.99.
The average for the last 30 days would be 3,881,949,636.66.
The average for the last 31 days would be 3,756,725,454.83.
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$/day.
There were 175 reports in 257 days of FY2010 averaging 6.48B$ per report, 4.41B$/day.
Above line should be okay

PROJECTION:
There are 951 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
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)
06/14/2010 13,043,148,269,336.48 BHO (UP 2,416,271,220,423.40 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 +1,133,319,265,824.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,609,577,945,626.52 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/24/2010 +000,371,674,396.55 ------------******** Mon
05/25/2010 +000,937,216,055.27 ------------********
05/26/2010 +001,057,190,066.84 ------------*********
05/27/2010 +015,241,764,354.27 ------------**********
05/28/2010 -000,294,414,430.12 ---
06/01/2010 +078,359,726,143.31 ------------********** Tue
06/02/2010 +000,523,171,733.61 ------------********
06/03/2010 +004,027,515,403.86 ------------*********
06/04/2010 +000,194,136,067.09 ------------********
06/07/2010 +000,055,958,918.33 ------------******* Mon
06/08/2010 -000,061,366,300.19 ----
06/09/2010 +000,374,218,915.72 ------------********
06/10/2010 -005,787,434,254.89 --
06/11/2010 -000,035,173,484.80 ----
06/14/2010 +000,237,116,126.71 ------------******** Mon

95,201,299,711.56 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=4427284&mesg_id=4427297

[ozymandius]

7. NY Fed's Enhanced Powers May Come With Reduced Autonomy

The Federal Reserve Bank of New York, which carried out central-bank rescues of money markets and Wall Street firms, is poised to have its powers expanded even more -- at the risk of reduced independence.

Senate and House negotiators meet today to begin hammering out a financial-regulation bill that puts the New York Fed at the forefront of the central bank’s new role as overseer for financial stability. Lawmakers also want its chief, now nominated by the bank’s board, to be a White House appointee.

Senate Banking Committee Chairman Christopher Dodd says the selection process must be overhauled to avoid conflicts of interest at the regional Fed bank, which supervises firms including JPMorgan Chase & Co. and Goldman Sachs Group Inc., where New York Fed chief William Dudley spent two decades. Opponents, including St. Louis Fed President James Bullard, say the legislation represents an effort by politicians to exert more control over monetary policy.

The New York Fed might have its authority extended to firms such as GE Capital. Jeffrey Immelt, chairman of General Electric Co., the parent of GE Capital, sits on the New York Fed Board.

Dodd’s proposal to have the regional Fed chief appointed to a five-year term subject to Senate approval means politicians would pick two-thirds of the Federal Open Market Committee. Dudley, whose term ends in February, is vice chairman of the rate-setting panel. Of the Fed’s 12 regional bank presidents, he’s the only one with a permanent vote on the FOMC alongside the seven Washington-based governors.

http://preview.bloomberg.com/news/2010-06-15/new-york-fed-s-enhanced-power-may-come-at-expense-of-reduced-independence.html

[Demeter]

20. People who abuse the power they have should not be given more

[ozymandius]

8. BP Bankruptcy Would Be No Protection From Gulf Spill Costs

June 15 (Bloomberg) --BP Plc, whose potential liability for the Gulf of Mexico oil spill has lawmakers and analysts raising the specter of bankruptcy, would be unlikely to avoid paying claims by seeking court protection, restructuring experts said.

The U.K. energy company faces more than 200 lawsuits, and the U.S. is assessing the cost of restoring natural resources destroyed or fouled by the spill. BP’s liabilities include $37 billion in cleanup and potential litigation expenses, according to a June 2 Credit Suisse report. While a U.S. bankruptcy may halt many claims, it wouldn’t allow BP to avoid paying for most of the cleanup and damages, said New York bankruptcy lawyer Martin Bienenstock of Dewey & LeBoeuf LLP.

“The bankruptcy option is clearly there,” said John Olson, managing partner of Houston Energy Partners, a hedge fund unit of Sanders Morris Harris Group Inc. “BP’s board and CEO can say they’ve ruled it out, but you can’t rule it out, realistically.” Olson doesn’t hold any BP shares.

On June 13, White House Adviser David Axelrod called on BP to establish an escrow account for claims tied to the spill. U.S. Senate Majority Leader Harry Reid requested that the London-based company set up a $20 billion fund administered by an independent trustee, according to a letter from his office.

The Obama administration should consider placing the company in receivership to preserve its assets because BP is likely to end up in bankruptcy, said Representative Steve Cohen, a Tennessee Democrat. Louisiana State Treasurer John Kennedy agreed, saying bankruptcy is a possibility and state and federal governments need to plan for it. The spill has sullied or threatened the coastlines of Louisiana, Alabama, Mississippi, Florida and Texas.

http://preview.bloomberg.com/news/2010-06-15/bp-bankruptcy-would-offer-no-protection-from-gulf-damages-cleanup-costs.html

[UpInArms]

35. BP credit rating slashed by Fitch Ratings

http://www.marketwatch.com/story/bp-credit-rating-slashed-six-notches-by-fitch-2010-06-15?siteid=bnbh

LONDON (MarketWatch) -- BP's credit rating was slashed a staggering six notches by Fitch Ratings on Tuesday, just hours before its top U.S. executive is grilled in front of Congress as worries over how much the company will have to pay for the Gulf of Mexico oil spill grow.

BP's (BP 31.24, +0.57, +1.86%)
(UK:BP. 353.10, -2.35, -0.66%) credit rating was knocked to BBB from AA, leaving the oil giant's rating at one of the three major agencies just two notches above junk status. BP was put on negative watch for further downgrades.

Fitch, which had cut BP's rating just two weeks ago, said the main driver was the Obama administration's insistence that claims being paid out of an escrow account.

"The recent claims by U.S. state and federal authorities that BP escrow significant sums pre-emptively, ahead of any agreed claims process, represent a material change in approach, should it ultimately prove a legally supportable move against the company," the rating agency said.

Fitch also noted that government scientists have increased their estimates of the spill rate.

Using a variety of company and industry estimates, Fitch sees immediate clean-up and claim settlements between $3 billion and $6 billion; civil fines of between $2 billion and $8 billion; "medium-term incremental one-off costs," which it didn't calculate but pointed out that a 1% rise in North American operational costs would increase spending by $700 million a year; and long-date litigation-related damages.

Fitch said it would be "surprised" if BP did not suspend quarterly cash dividend payments until the operational and financial impact of the incident is clearer.

The rating agency made clear it didn't expect BP to file for bankruptcy.

However, "the possibility of further, potentially multi-notch rating actions" arise from higher financial claims, the acceleration of the payment of claims and the possibility of declining BP's access to capital.

...more...

[ozymandius]

11. Moody’s Downgrades Greece (Also, Kennedy was shot)

From Ritholtz:

On Monday, Moody’s downgraded Greece’s government bond ratings to junk status of Ba1 from A3.

As legislators debate new regulation for the financial sector, this action yesterday serves as a reminder to the folks in DC that the current regime of ratings agencies has become an unmitigated disaster.

It also raises a simple question: What possible reason on God’s green earth do the ratings agencies currently serve?

Consider the following facts about Moody’s and S&P:

• They are not unbiased observer of credit issuers.

• They do not provide actionable intelligence for bond or equity investors.

• Their positive credit ratings are, as we learned during the collapse, mostly worthless.

• Downgrades and negative ratings are also mostly worthless — but downgrades do have the redeeming quality of providing comic relief, to wit, the astonishingly belated downgrades of Enron, Lehman Brothers, Bear Stearns, Citi, AIG and now Greece. (Good times!)

• Last, they seem to be incapable of providing any sort early warning about potential systemic credit issues with major economic ramifications.

Other than that, they are a terrific group of folks who have done a bang up job paying themselves huge bonuses for previously unimaginable levels of incompetence.

http://www.ritholtz.com/blog/2010/06/moodys-downgrades-greece/

[Po_d Mainiac]

32. Someone in Athens slip them a wooden nickel? n/t

[Dr.Phool]

47. Are they hiring?

I'm a very competent incompetent.

[Roland99]

15. Index Futures - WHEEE!!!

S&P 500 1,092 +6.00 +0.55%
DOW 10,191 +50.00 +0.49%
NASDAQ 1,858 +11.00 +0.60%

[DemReadingDU]

19. Not necessarily stock related, but an iconic statue was struck by lightening

If anyone has been to SW Ohio, they never forget this statue.

6/15/10 Lightning strike destroys King of Kings statue
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8560305

[TalkingDog]

22. I was about to comment on that on FB

Looks like he was asking for it.....

One particularly confusing paragraph:
"I can’t believe Jesus was struck,” said his brother, who noted the giant Hustler Hollywood sign for the adult store across the street was untouched. “It’s the last thing I expected to happen.”

And not to be a horrible snob (because there is some incredibly beautiful religious art out there)given the overall aesthetics of the work, it was probably for the best.....

[Tansy_Gold]

33. That cheered me up considerably!

I remember going through Illinois on a long road trip in 2004 and waking up -- my husband was driving -- to see a huge lighted cross looming ahead in the darkness along the side of the interstate. My goodness, I can't imagine waking up to see that big "touchdown Jesus"!



The irreverent


Tansy Gold

[Dr.Phool]

42. It's a precursor to the Bengals season.

God is a Browns fan.

Now, if he'd just divinely whack Art Modell.

[Tansy_Gold]

44. She. n/t

[Dr.Phool]

45. It?

[AnneD]

86. Our theme song today...

Drop kick me Jesus through the goal posts of life

Drop kick me Jesus through the goal posts of life
End over end neither left nor to right
Straight through the heart of them righteous uprights
Drop kick me Jesus through the goal posts of life.

Make me, oh make me, Lord more than I am
Make me a piece in your master game plan
Free from the earthly tempestion below
I’ve got the will, Lord if you’ve got the toe.

Drop kick me Jesus through the goal posts of life
End over end neither left nor to right
Straight through the heart of them righteous uprights
Drop kick me Jesus through the goal posts of life.

Take all the brothers who’ve gone on before
And all of the sisters who’ve knocked on your door
All the departed dear loved ones of mine
Stick’em up front in the offensive line.

Drop kick me Jesus through the goal posts of life
End over end neither left nor to right
Straight through the heart of them righteous uprights
Drop kick me Jesus through the goal posts of life.

Yeah, Drop kick me Jesus through the goal posts of life
End over end neither left nor to right
Straight through the heart of them righteous uprights
Drop kick me Jesus through the goal posts of life.




I like to consider myself christian but that one made me :puke:

[TalkingDog]

95. You might enjoy (or have already enjoyed) The Austin Lounge Lizards

Jesus Loves Me (but he can't stand you)

Cracks me up every time.

[AnneD]

100. Love the Lounge Lizards...

My friend is in a group called Clandestine, and they do a wonderful song about Pagans taking their revenge and burning Christians....Funny as hell.

[ozymandius]

27. Offering my 2¢ again here -

Maybe this was divinely inspired art criticism.

[TalkingDog]

48. PhotoBlog: God Hates Bad Art

I'd subscribe....

[DemReadingDU]

56. Me Too!

[Roland99]

59. also called the "Butter Jesus" by locals (and those of us that passed it often)

because it looked like it was made out of butter.

[ozymandius]

62. It melted like it was butter, too.

I wonder how the roasted marshmallows tasted.

[tclambert]

96. I want to be buried with a casket full of graham crackers, marshmallows, and chocolate

Figure they'll already have the campfire where I'm headed. Hey, Beezly Bub, have ya heard of s'mores?

[Dr.Phool]

69. Wow! Is Jesus ever hot. Flaming photo at link.

http://www.daytondailynews.com/news/dayton-news/jesus-statue-fire-damages-estimated-at-700-000jesus-statue-fire-damages-estimated-at-700-000-762245.html

[DemReadingDU]

73. Wow!

I'd like to think that Jesus is sending a message to all the criminals...May they all burn in hell.

[Demeter]

79. There is a god and she is pissed and will not be mocked

Styrofoam? Don't they have any building codes? Urban renewal at its finest!

[Dr.Phool]

91. Designed by a BP engineer.

[Demeter]

21. US-UBS tax evasion deal backed by Swiss parliament

Switzerland's parliament has voted to approve a deal which would see information on suspected tax-evaders be passed to US authorities.

The lower house of the Swiss parliament backed the agreement, reversing its earlier decision to reject the agreement last week.

The move is designed to head off US accusations that the Swiss bank UBS is aiding tax evasion.

The US alleges that 4,450 of its citizens hold secret accounts with UBS.

Read more: http://news.bbc.co.uk/1/hi/business/10316799.stm

[ozymandius]

23. SEC: Government Destroyed Documents Regarding Pre-9/11 Put Options

Alright. This is really bizarre.

On September 19, 2001, CBS reported:

Sources tell CBS News that the afternoon before the attack, alarm bells were sounding over unusual trading in the U.S. stock options market.

An extraordinary number of trades were betting that American Airlines stock price would fall.

The trades are called "puts" and they involved at least 450,000 shares of American. But what raised the red flag is more than 80 percent of the orders were "puts", far outnumbering "call" options, those betting the stock would rise.

Sources say they have never seen that kind of imbalance before, reports CBS News Correspondent Sharyl Attkisson. Normally the numbers are fairly even.

After the terrorist attacks, American Airline stock price did fall obviously by 39 percent, and according to sources, that translated into well over $5 million total profit for the person or persons who bet the stock would fall.

At least one Wall Street firm reported their suspicions about this activity to the SEC shortly after the attack.

The same thing happened with United Airlines on the Chicago Board Options Exchange four days before the attack. An extremely unbalanced number of trades betting United's stock price would fall — also transformed into huge profits when it did after the hijackings.

On October 19, 2001, the Chronicle wrote:

On Oct. 2, Canadian securities officials confirmed that the SEC privately had asked North American investment firms to review their records for evidence of trading activity in the shares of 38 companies, suggesting that some buyers and sellers might have had advance knowledge of the attacks.

FMR Corp. spokeswoman Anne Crowley, said her firm -- which owns the giant Fidelity family of mutual funds in Boston -- has already provided "account and transaction" information to investigators, and had no objection to the new procedures announced yesterday. Crowley declined to describe the nature of the information previously shared with the government.

So the effort to track down the source of the puts was certainly quite substantial.

What were the results of the investigation?

Apparently, we'll never know.

http://www.washingtonsblog.com/2010/06/sec-government-destroyed-documents.html

[Demeter]

25. A Graphic Response

:banghead: :banghead: :banghead: :banghead: :banghead: :banghead: :banghead: :banghead: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr: :grr:

[SpiralHawk]

43. "Smirk. MIHOP. Smirk." - xCommander AWOL & RepubliCronies (R)

[florida08]

46. results were..get rid of the evidence

[TalkingDog]

51. History has shown that conspiracies exist.

Governments experiment on the clueless, weak and dispossessed for "medical" research or to determine how dangerous or useful a chemical or disease might be in a time of war or crisis. At least that is the standard justification.

But this naked greed, with no pretense toward a larger if misguided "greater good", is literally killing us. Not only are we eating our own. We are shitting where we eat; something even a rabid dog would not do.

I am beyond disgust.

[Po_d Mainiac]

54. This deserves it's own post

+1,000K

[Demeter]

24. I'm Tempting Fate Here

http://www.commondreams.org/view/2010/06/12-1

The Do-Nothing 44th President by David Michael Green

What do nine dead Gaza activists in the Mediterranean, nine-plus percent unemployment, and ninety years of oil catastrophe clean-up have in common?

How about one astonishingly tepid president?

How about one guy in the White House who squirms in his chair anytime someone uses the word "bold" and actually means it?

How about one dude in the Oval Office who seems much more interested in making deals to determine who should be the Democratic candidates for various state offices than in actually solving national problems?

We could hardly have a president more ill-suited to our time if we were to dig up Herbert Hoover and prop his weary bones up on the presidential throne.

Barack Obama has five major problems as president. The first is that he doesn't understand priorities. The second is that he seems to have little strong conviction on any given issue. The third is that to the extent he stands for anything, it is for maintenance of a status quo that continues to wreck the country in order to service the greed of a few oligarchs. The fourth is that he fundamentally does not understand the powers and the role of the modern presidency. And the fifth is that he maintains the worst communications apparatus in the White House since Jimmy Carter prowled its corridors. In fairness to his communications team, though, he has given them almost nothing to sell. You try singing the praises of bailing out Goldman Sachs one hundred cents on the dollar, or of a health care plan that forces people to buy plans they don't want from hated insurance vultures. It ain't easy, pal. Yet, on the other hand, Bush and Cheney had far less than nothing to sell when it came to the Iraq war - indeed, they had nothing but lies - and their team handled that masterfully.

(LIES ARE EASIER TO SELL IN THIS CULTURE, IMO. THERE'S A READY MARKET FOR THEM)

The fundamental characteristic of the Obama presidency is that the president is a reactive object, essentially the victim of events and other political forces, rather than the single greatest center of power in the country, and arguably on the planet. He is the Mr. Bill of politicians. People sometimes excuse the Obama torpor by making reference to all the problems on his plate, and all the enemies at his gate. But what they fail to understand - and, most crucially, what he fails to understand - is the nature of the modern presidency. Successful presidents today (by which I mean those who get what they want) not only drive outcomes in their preferred direction, but shape the very character of the debate itself. And they not only shape the character of the debate, but they determine which items are on the docket.

Moreover, there is a continuously evolving and reciprocal relationship between presidential boldness and achievement. In the same way that nothing breeds success like success, nothing sets the president up for achieving his or her next goal better than succeeding dramatically on the last go around.

This is absolutely a matter of perception, and you can see it best in the way that Congress and especially the Washington press corps fawn over bold and intimidating presidents like Reagan and George W. Bush. The political teams surrounding these presidents understood the psychology of power all too well. They knew that by simultaneously creating a steamroller effect and feigning a clubby atmosphere for Congress and the press, they could leave such hapless hangers-on with only one remaining way to pretend to preserve their dignities. By jumping on board the freight train, they could be given the illusion of being next to power, of being part of the winning team. And so, with virtually the sole exception of the now retired Helen Thomas, this is precisely what they did.

But the game of successfully governing is substantive as well as psychological. More often than not, timidity turns out not to yield the safe course anticipated by those with weak knees, but rather their subsequent undoing. The three cases mentioned at the top of this essay are paradigmatic.

By far and away the most crucial problem on the minds of most Americans today is the economy, as is often the case, but now more than ever. It's hard to quite figure where Barack Obama is on this issue. What is always most puzzling with this guy is reconciling the fundamentally irrational behavior of his presidency with the obvious intellectual abilities of the president and the administrative masterfulness of the campaign he ran to obtain that office. It seems to me that there are four options for understanding Obama's self-defeating tendency when it comes to the economic disaster he inherited. One is that he simply isn't so smart, and doesn't get the ramifications of continued unemployment at the level it's currently running. The second option is that he's just a policy bungler, who has the right intentions but makes lousy choices for trying to get there. The third possibility is that Obama recognizes this latest recession as the capstone (we hope) of a three decade long process by the economic oligarchy seeking nothing less than the downsizing of the American middle class, and he simply lacks the courage to attempt any reversal of this tsunami of wealth redistribution. The final, and scariest - but by no means least probable - explanation for Obama's behavior is that he is ultimately no less a tool in that very piracy project than was George W. Bush or Bill Clinton.

VITRIOL BUILDS AT LINK

David Michael Green is a professor of political science at Hofstra University in New York. He is delighted to receive readers' reactions to his articles (mailto:[email protected]), but regrets that time constraints do not always allow him to respond. More of his work can be found at his website, www.regressiveantidote.net.

(THIS WAS BANNED IN "BOSTON" YESTERDAY)

[ozymandius]

30. If Eugene Robinson is right

by teacherken at DailyKos:

then this administration has really failed to do all it can to address the crisis in the Gulf of Mexico. Allow me to quote from his column We're losing the gulf war:

The Post reported Monday that the administration has received offers of assistance from 17 nations. Sweden has volunteered to send three ships that can each collect about 15,000 gallons of oil an hour. Norway has offered to send nearly a third of its oil-spill response equipment. Japan has offered to send some boom, which authorities on the scene complain is in short supply.

.....

Let's back up. From the moment the Deepwater Horizon caught on fire and the possibility of a spill / leak was known, I believe the administration should have been moving heaven and earth to obtain equipment for the worst case scenario.

Those Swedish ships can, according to the Post article to which Robinson linked, collect about 370 barrels per hour, which at 42 gal/bbl = 15,540 gallons. Or think of it this way, those three ships would have been scooping up 1110 barrels a day. A small amount of how much is now acknowledged to be coming out, but over the period of time since they could have been on scene, a substantial portion of what has now been fouled could have been protected - by these vessels, by the other offers of help.

If Eugene Robinson is right - and I strongly suspect that he is - then many in our government failed to plan in the first place, and to respond appropriately once the incident occurred.

Please note - from what I can determine and what I know of the previous occupant of the Oval Office and his fellow oilman who really ran energy policy, the response to an incident like this would on their watch have been far more minimal.

But that is too low a bar.

....

And the damage being wreaked upon the Gulf and its coast - people, fish, birds, animals, habitat, livelihoods, ways of life - one can only hope and pray that we do not have a worst case scenario.

.....

If Eugen Robinson is right - and he is - this administration did not do all it could and should have done. That is something for which they will be held accountable. Rightfully so.

http://www.dailykos.com/story/2010/6/15/876009/-If-Eugene-Robinson-is-right

[bread_and_roses]

52. I look forward to him every week

and banning something that can be read all over the web - and on sites like commondreams, which probably half the people here read regularly - is simply idiotic. Talk about burying your head in the sand. "If I close my eyes it will go away." Sure.

Last week I gently urged a turtle across the road so it wouldn't get killed - it rolled its little reptile eye at me and sullenly moved away from my prodding till its head was buried in the weeds on the other side of the road - as soon as it couldn't see me, it stubbornly stopped. I was still there. If I'd wanted turtle soup, it would have been out of luck.

[Demeter]

80. We Had a Snapping Turtle Out of the Pond Here--about 18" Across

She was looking for a place to lay eggs....

[Demeter]

29. "Dr. Death Says The U.S. Is Really, Really Sick." By Eric Margolis

I THOUGHT ROUBINI WAS "DR. DOOM"

http://www.huffingtonpost.com/eric-margolis/dr-death-says-the-us-is-r_b_611230.html

Turkey is rapidly emerging as an important regional political and economic power. Ankara no longer automatically follows Washington's direction, as it did in the past, and no longer has to accept US financial aid. PM Erdogan's opposition to Israel's bombing and blockade of Gaza, and his refusal to isolate neighboring Iran, has made him a hero across the Muslim world.

Turkey's long self-isolation from the rest of the Muslim world, and antipathy towards the Arabs, was the result of veiled rule by the powerful, hard right military. The generals were guardians of Turkey's virtual state religion, the cult of 1930's strongman, Mustafa Kemal Ataturk, who tried to uproot Islam and Turkey's ancient traditions and turn the nation into a secular western state.

The military has been forced back to its barracks with a helping hand from the European Union. Now that Turkey is no longer isolated from its neighbors, Istanbul is returning to its former role as the Paris of the Muslim world.

This boisterous, fascinating, magical metropolis pulsates with intellectual energy, exciting films and music, and superb food. Western ways are in constant clash with traditional Islamic culture. I spent an afternoon at the military museum, studying the epic of the greater Turkish nation, whose peoples extend from the Great Wall of China to Europe. I've long studied Pan-Turkism, which arose in the 19th century at the same time as Russian-led Pan-Slavism. This belief in a great Turkic nation spanning Central Asia continues to have deep roots in among fiercely nationalistic Turks.

But the most important issue facing Turkey and the rest of Europe today is not the Mideast or dreams of empire but the financial storm raging around the continent. Turkey is so far weathering the tempest fairly well, in part because it was not integrated into the global financial system.

THIS IS WHAT IS KNOWN AS A 'CLUE', FOR TPTB

After decades of near-death experiences, Turkey's finances have finally been stabilized. But many other European nations are in real trouble. Hungary, Latvia, Romania, and Bulgaria are in financial turmoil. Greece is racked by riots, protests and strikes by angry civil servants. There is no way Greece will be able to reduce its unsustainable debt load from 13.3% of GDP to 3%, as Athens promises.

Greece will likely default on its bonds over coming years, just like debt-strapped Argentina. It's hellishly difficult for democratic governments to massively slash public spending, raise taxes, and purge bloated bureaucracies.

The only way out for Greece is to default, withdraw from the euro zone, and bring back its wobbly drachma.

MORE AT LINK

[Demeter]

34. Bulging Inventory Signals Next Leg Down in Housing By Mike Whitney

http://www.informationclearinghouse.info/article25717.htm

Did the Federal Reserve collude with the big banks to hold millions of houses off the market until the Fed finished adding $1.25 trillion to the banks reserves? Did the Fed do this to make it appear that its bond purchasing plan (quantitative easing) was stabilizing prices when, in fact, it was the reduction in supply that stopped prices from plunging? It sure looks that way. This is from Bloomberg News:

"U.S. home foreclosures reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to RealtyTrac.Inc.

Bank repossessions climbed 44 percent from May 2009 to 93,777, the Irvine, California-based data company said today in a statement. Foreclosure filings, including default and auction notices, rose about 1 percent to 322,920. One out of every 400 U.S. households received a filing." (Bloomberg)

Inventory steadily declined during the period the Fed was exchanging cash-for-trash (toxic assets and non performing loans for reserves) with the banks. Now inventories have begun to rise again as the banks get back to business as usual, in other words, throwing people out of their homes. The sudden uptick in repossessions and property seizures coincides perfectly with the ending of the Fed's giant "no bankster left behind" program. Clearly, there must have been a quid pro quo.

What's so impressive about Bernanke's trillion dollar sleight-of-hand operation is its utter simplicity. We're just talking "supply and demand" here, not rocket science. The banks agreed to cut supply (by temporarily stockpiling homes) while the Fed loaded them up with a cold trillion-plus in reserves. Meanwhile, John Q. Public assumed (incorrectly) that Bernanke's program helped to stabilize prices. It's a very ingenious deception worthy of a professional conman.

Readers may remember that quantitative easing (QE) was promoted as a way to increase lending to consumers and to keep interest rates on mortgages low. But that was all just public relations hype. Consumer lending contracted in the last year while interest rates on the 30-year mortgage have fallen since Bernanke's QE program ended at the end of March.

So what does it all mean? It means the public was snookered yet again. It also means that housing prices will fall further as banks dump more inventory on the market. How far prices drop will depend on how quickly the banks clear their shadow inventory which, in turn, depends on (secret) agreements they've made with the Fed and the other banks. Housing inventory is being released in drips and drabs according to an unknown plan. Some would call it price-fixing. Here's an excerpt from an article in the Wall Street Journal that says that there's a 9-year backlog of distressed homes:

"How much should we worry about a new leg down in the housing market? If the number of foreclosed homes piling up at banks is any indication, there’s ample reason for concern. As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier....

Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier. Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload. That’s nearly nine years. Of course, banks could pick up the pace of sales, but the added supply of distressed homes would weigh heavily on prices — and thus boost their losses." ("Number of the Week: 103 Months to Clear Housing Inventory" Mark Whitehouse, Wall Street Journal)

Here's a clip from Housing Wire with a slightly different perspective:

"The amount of REO property held by the banks is also known as the “shadow inventory” of foreclosures. According to Morgan Stanley, it would take 47 months for the market to clear the roughly 7.5m first-lien mortgages in danger or already in foreclosure." ("Foreclosed Properties Held by Banks Up 12.4% in Q110: SNL Financial," Jon Prior, Housingwire.com)

No matter how you look at it, housing will be in a funk for the next 5 to 10 years. There's just too much product and too few buyers. Austerity measures by the Obama team will only put more pressure on sales and prices.


Now that the government's homebuyer credits, subsidies and incentives have ended, demand for housing is drying up fast. The Mortgage Bankers Association (MBA) reports that new mortgage purchase applications have tumbled nearly 40 percent to their lowest level since April of 1997. Sales are in freefall. Prices have already slipped 30 percent from their peak in 2006. Another 10 percent could be the straw that breaks the camel's back, as Whitney Tilson explains in a recent article titled "The Housing Non Recovery". Here's an excerpt:

"Today about 17.2% of homeowners are underwater. But if home prices drop 10% from here, 27% of homeowners would go underwater. In other words, a 10% drop in home prices would cause a 56% increase in the number of people underwater…which would almost certainly lead to another surge in defaults." ("The Housing Non Recovery", The Daily Reckoning)

This excerpt deserves a second reading. The next 10 percent plunge in prices will be more painful than the first 30 percent. The market is on a knife's edge and one false move could be deadly. More than 7 million homeowners have already stopped paying their mortgages which means that the inventory-pipeline will be bulging for years to come. The administration needs to get on top of this problem before the downward spiral begins and the next disaster becomes unavoidable.

[florida08]

49. well that answers my question

[DemReadingDU]

57. Will the real “Dr Doom” please stand up?

appx half-way down into this article


Roubini actually shares the “Dr. Doom” title with many others, including Hong Kong economist Marc Faber who publishes the “Gloom Boom Doom Report;” legendary Salomon Bros. strategist Henry Kaufman; and Houston billionaire Richard Rainwater, whom Fortune mentioned as “Dr. Doom.” In addition, in June last summer, we reported on many others whose predictions of a coming recession predated Roubini’s claim, though not called “Dr. Doom.” They include: Pete Peterson, a Blackstone Group founder; Pimco’s Bill Gross; Harvard financial historian Niall Ferguson; Warren Buffett; former SEC chairman Arthur Levitt; Jeremy Grantham whose GMO firm manages $100 billion; Black Swan author Nassim Nicholas Taleb; and long-time Forbes columnist, economist Gary Shilling.

http://wallstreetwarzone.com/6-reasons-economists-predictions-fail-us/

[DemReadingDU]

58. Mirror mirror on the wall, who’s the gloomiest of them all?

3/2/10 Mirror mirror on the wall, who’s the gloomiest of them all?

Here’s our survey of what some of the bigwigs in the investment industry have said about 2009 in recent months. In our mock* roster, we have Warren Buffet the sage; Nouriel Roubini aka Dr Boom/perma-bear, or our favourite, the playboy Professor; Nassim Taleb aka Black Swan; Peter Schiff who’s-laughing-now; Jim Rogers my-kids-speak-Chinese-and-that-is-my-investment-hedge; Marc Faber the original-Dr-Doom; Don Coxe via Basic Points; and John Embry the Canadian goldbug.

http://www.investoralist.com/experts-2009-economic-prediction/

[DemReadingDU]

63. SeekingAlpha: Five Dr. Dooms

1/8/09
Thus Peter Schiff appears to have indeed laid claim to the alias Dr. Doom, in addition to Nouriel Roubini, Marc Faber, Stephen Roach, and Henry Kaufman.

http://seekingalpha.com/article/113832-another-dr-doom-peter-schiff

[Demeter]

82. Peterson Deserves the Dr. Death--even though He's got no Degree

If he guts Social Security, people will be starving in the streets.

[Demeter]

37. Afghanistan Mineral Riches: Beware the Hype By James Joyner

http://www.acus.org/new_atlanticist/afghanistan-mineral-riches-beware-hype

News that "United States has discovered nearly $1 trillion in untapped mineral deposits in Afghanistan, far beyond any previously known reserves and enough to fundamentally alter the Afghan economy and perhaps the Afghan war itself" should be taken with several doses of salt.

James Risen of the NYT broke the story, which has the security blogosphere buzzing. It gushes,

The previously unknown deposits — including huge veins of iron, copper, cobalt, gold and critical industrial metals like lithium — are so big and include so many minerals that are essential to modern industry that Afghanistan could eventually be transformed into one of the most important mining centers in the world, the United States officials believe.

An internal Pentagon memo, for example, states that Afghanistan could become the “Saudi Arabia of lithium,” a key raw material in the manufacture of batteries for laptops and BlackBerrys.

While it could take many years to develop a mining industry, the potential is so great that officials and executives in the industry believe it could attract heavy investment even before mines are profitable, providing the possibility of jobs that could distract from generations of war.

“There is stunning potential here,” Gen. David H. Petraeus, commander of the United States Central Command, said in an interview on Saturday. “There are a lot of ifs, of course, but I think potentially it is hugely significant.”

The value of the newly discovered mineral deposits dwarfs the size of Afghanistan’s existing war-bedraggled economy, which is based largely on opium production and narcotics trafficking as well as aid from the United States and other industrialized countries. Afghanistan’s gross domestic product is only about $12 billion.

“This will become the backbone of the Afghan economy,” said Jalil Jumriany, an adviser to the Afghan minister of mines.

But, as Foreign Policy managing editor Blake Hounshell points out, the discovery in question dates to 2007, has been widely documented on US government websites for years, and the $1 trillion figure seems to have been conjured from thin air. The Atlantic's Marc Ambinder points to evidence that the Soviets had documented this trove way back in 1985!

Katie Drummond of Wired's Danger Room adds, "it might be prudent to be wary of any data coming out of Afghanistan’s own Mines Minestry," citing a Wall Street Journal report noting it “has long been considered one of the country’s most corrupt government departments."

That this story has gotten front page placement in the country's top newspaper has Mother Jones' Kevin Drum, OTB's Doug Mataconis, and others questioning the timing. Ambinder, noting the on-the-record quotes from the highest levels of the U.S. military, goes so far as to characterize this as "a massive information operation."

Aside from the fact that the news isn't actually new and that there's good reason to believe that the potential benefits are being wildly exaggerated for political reasons, we should also be skeptical of the idea that Afghanistan is going to suddenly leap forward several centuries into modernity by virtue of a natural resource find.

First, as Matt Yglesias of the Center for American Progress notes, it's quite likely that the actual extraction will be performed by non-Afghan companies who bid on the mineral rights at a fraction of their actual value.

Second, given the corruption that is endemic in the Afghan governance culture, it's quite likely that most of the money will be skimmed off the top rather than benefiting the Afghan people.

Third, there's real reason to worry about a developing country relying on resource extraction to build their economy. CNAS senior fellow' Andrew Exum points to Paul Collier's The Bottom Billion and sees dark days ahead for the NATO coalition effort:

Collier describes the characteristics that "trap" countries in cycles of civil conflict: low income, slow growth, and dependence on primary commodity exports. I don't need to tell you Afghanistan has the first and third characteristics in spades, and you may have noticed that Afghanistan has already been in a pretty miserable cycle of civil conflict since the PDPA coup in 1978. Does this resource find make civil war more or less likely? The statistics, I'm afraid, suggest the former.

The presence of civil war is not reason alone to give up on Afghanistan and bring the boys home. I have previously argued that yes, Afghanistan is in a civil war, and that we should take sides in that civil war to advance U.S. and allied interests. That's basically what we are doing today. But counterinsurgency strategies rest on the assumption that you can eventually weaken anti-government forces and reduce levels of violence to the point where a political process can take place in more peaceful circumstances. We now have one trillion fresh reasons why this assumption might not be valid for Afghanistan.

The Washington Independent's Spencer Ackerman, noting that "Afghanistan’s economy is based around opium and foreign aid," agrees:

In emerging and underdeveloped states, weak legal systems and official corruption create incentives for powerful people to exploit those resources, rather than allow mineral wealth to fuel national renewal. Think Congo or Sierra Leone. It’s easy to tick off the ways in which what political scientists call the “Resource Curse” applies to Afghanistan: a tenuous legal structure; warlordism; war; foreign interventionism; corruption throughout the political system; an uneasy and unstable relationship between provincial and national authorities; and an uneasy and unstable relationship in provinces and districts with instruments of local governance as well as national governance.

BUT THAT'S EXACTLY WHAT TPTB ORDERED!

Let's hope that retired Green Beret and DoD senior executive Pat Lang is right that "the lives of ordinary Afghans will be profoundly changed perhaps for the better." After decades of war and centuries of poverty, it would be wonderful. But a lot needs to go right for the rosier side of the perhaps to come true. And there's not much in Afghan history that would lead me to bet on it.

James Joyner is managing editor of the Atlantic Council.

[Tansy_Gold]

50. This confirms my gut feeling when I read this "news" yesterday

I dabble in lapidary, and Afghanistan has been known virtually forever for its mineral treasures.









Comment with the last pic -- and no, I don't know how large that aquamarine crystal is --

"This is a mine-to-market program," says Bowersox. "We are helping in the areas of exploration, mining, extraction, cutting, and marketing stones for export."
To date, Bowersox had assisted in the survey of 172 emerald mines and 39 ruby mines. But within the next five years those numbers could soar to 500 - 700 mines, generating up to $500 million in much-needed revenue for residents."

from http://www.jckonline.com/article/448053-Consortium_of_Afghan_Miners_Visits_AGTA_GemFair_Tucson.php



Having seen this article, yours truly may rethink her aversion to the overwhelming gemness of Tucson and go next February just to see the gems from Afghanistan.


Tansy Gold

[Demeter]

84. Where Are You Going, Tansy? Afghanistan?

You're a better man than I am, Gunga Din

[Tansy_Gold]

90. No, just to the gem shows in Tucson.

It's only a 90 minute drive from where I live, but it's really an overwhelming experience. Worth going to at least once -- which I've done.

But the gems of Afghanistan aren't "news" to anyone in the business even as small time and tangentially as I am, so when I saw the headlines yesterday I figured it was some kind of hype.



TG, dealing yet again with the softare conversion from hell that just refuses to give up. . . . .

[Demeter]

40. Cenk Uygur's diary at daily Kos

http://www.dailykos.com/story/2010/6/14/875747/-Lets-Name-the-Bankers-and-Make-Them-Famous

...Last week we led a protest at the Treasury Department to demand that they get our $13 billion back from Goldman Sachs for the AIG backdoor bailout (read about the reason for the protest here).

On the same day, a Congressional report came out saying basically that we were exactly right. The Congressional watchdogs said that not only should Goldman not have gotten paid a hundred percent of their bets by the American taxpayer but that doing so "undermined the basic tenets of capitalism" and had a "poisonous effect on the marketplace."

People came from all over the country to this protest. Someone took a 24 hour bus ride from Minnesota to join us at the protest. Others flew in from Wisconsin and Illinois. Someone also took a train from Minnesota (maybe Al Franken is energizing the state to get them so active). People drove in from Philadelphia, New York, New Jersey, Maryland, Virginia, etc. Somebody even came in from Switzerland....

MORE AT LINK, INCLUDING SUPPORTING LINKS

Lastly, remember what Tim Geithner said at the time and continues to say to this day. He said that if we hadn't paid Goldman and the other banks for the side bets they made with AIG that the whole world economy would have collapsed. Well, luckily we're not on the edge of disaster anymore. Goldman made $25 million a day - every day - last quarter. And that was the bare minimum. They made more than $100 million 60% of those days. They're not on the brink of extinction anymore. In fact, they're making record profits. That's a perfect time for them to return the American taxpayers' money.

[Demeter]

41. Real Life Calls--It's Board Meeting Night

Spare a kind thought and some virtual chocolate, and Demeter goes where no sane person should ever go...The Wicked Witch is dead, but her legacy has yet to be cleaned up!

Somebody I know commented that he hadn't seen me for some time.

"That's because I've been going Crazy," I replied. "And it's a long way back."

[DemReadingDU]

65. Good Luck, Here's a box of my favorite chocolates!

http://www.estherprice.com/

[Demeter]

85. yum! Thank you!

[bread_and_roses]

53. Simple but true - Dean Baker - consumers have no money

http://www.commondreams.org/view/2010/06/15-1

Surprises in Store for Economists
Some analysts are shocked that US retail sales have declined. Have they lost their grasp of basic economic concepts?
by Dean Baker

The commerce department reported that retail sales in May were down by 1.2% from April. This surprised most economists who had expected a modest increase. The media were filled with accounts of economists trying to explain why consumers were still reluctant to open up their wallets and spend in a big way. It would have been much more interesting to hear accounts of why economists were surprised...

...The reason that consumers are not spending more money has nothing to do with attitudes. The reason that most consumers aren't spending is the same reason that homeless people don't spend much money: they don't have any.

Economists used to be able to understand basic economic concepts. Apparently, most have lost this ability. As a result we are likely to see many more surprised economists and much proposed in the way of very bad economic policy.

[Tansy_Gold]

66. They have no money???? I shocked, shocked I tell you! Hoocoodanode?

:rofl: :cry: :rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry::rofl: :cry:


Tansy Gold, likewise

[ozymandius]

68. Some days I just want to give up.

There's no helping some people. Least of whom, these perpetually "surprised" economists.

[DemReadingDU]

70. There is no money

Ok, let's use the 2 screws for effect again. The little screw represents the physical hard currency in circulation, that is U.S. coins and dollars. That big long screw represents what we have in digital accounts and on monthly paper statements such as savings accounts, 401(k)s, IRAs, mutual funds, the stock market, the bond market, derivatives and credit default swaps. See links following the screws.






Remember how our banking system works...We deposit our money in the bank for safekeeping, but then the bank uses it to loan to others, over and over and over and over again. What if everyone wants to withdraw all their money, at the same time. Recall this video clip of the bank run from the movie "It's a Wonderful Life"
http://www.youtube.com/watch?v=qu2uJWSZkck

As of December 2007, currency in circulation—that is, U.S. coins and paper currency in the hands of the public—totaled about $829 billion dollars. The Federal Reserve estimates that the majority of the cash in circulation today is outside the United States.
http://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html

The 2008 year-end insured deposits were projected to reach about $4.42 trillion.
http://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation

By 2006, there were seventy-million participants with more than $3 trillion of assets in 401(k) plans.
http://en.wikipedia.org/wiki/401(k) or http://tinyurl.com/k6p79

At year end 2008, Traditional IRA's held an estimated $3.221 trillion of investors wealth.
http://www.bogleheads.org/wiki/Traditional_IRA

In early 2008, the worldwide value of all mutual funds totaled more than $26 trillion.
http://en.wikipedia.org/wiki/Mutual_fund

The size of the world stock market was estimated at about $36.6 trillion US at the beginning of October 2008.
http://en.wikipedia.org/wiki/Stock_market

As of 2009, the size of the worldwide bond market is an estimated $82.2 trillion.
http://en.wikipedia.org/wiki/Bond_market

The global derivatives and Credit Default Swaps measure at USD 1.405 Quadrillion in March 2009.
http://www.huffingtonpost.com/dk-matai/how-far-away-are-we-from_b_509536.html

5/6/10 Again, watch this 3-minute video with David Letterman and Brian Williams.
'The world has no money and the emperor has no clothes.'
http://www.youtube.com/watch?v=SRNrl-858qA

[DemReadingDU]

71. The Automatic Earth - Stoneleigh: Trickles, Floods

6/14/10 Stoneleigh: Trickles, Floods and the Escalating Consequences of Debt

We have often said here at The Automatic Earth that there are many things that -still- function today, but once a trickle becomes a flood, will cease to function. Bank runs are the most obvious example - as soon as more than a handful of people withdraw their deposits, banks close their doors. Those who expect to be bailed out by deposit insurance are in for a nasty surprise, as deposit insurance won't be worth the paper it's written on in a systemic banking crisis. It's all merely a confidence game in the first place - a mechanism to convince you that there's actually nothing to worry about. If it worked there would never be any bank runs. However, if (when) the bluff is called, it will be game over.

Another problem area will be early pension withdrawals. Pension funds are generally underfunded (or sometimes even unfunded), and they have been trying to make up for the shortfall by chasing yield, without perhaps realizing that this meant they were chasing risk. The insiders who sold the riskiest high-yield 'investments' to pension funds called it 'land-filling toxic waste'. They knew perfectly well that they were crippling the future ability of pension funds to meet their obligations. Many pension fund assets will be worth pennies on the dollar as soon as extend and pretend can no longer be maintained and there is a serious price discovery event.

The structure of the credit default swap market virtually guarantees that such an event will take place in the next phase of the credit crunch. One can insure assets one does not own, which then confers a perverse incentive to burn things down for profit. Even more perversely, the complete lack of capital adequacy regulation in the CDS market means that one may force something to fail but not be able to collect on a 'winning bet'. The price discovery that could sink many vulnerable 'assets' could happen completely in vain.

In short, pension funds are in serious trouble, as we have pointed out many times before. The more people attempt to make early withdrawals, despite the tax penalties, the greater the risk that the lack of funding will become obvious. As a result, we are already seeing moves towards preventing early withdrawals, ostensibly to 'prevent people from impairing their retirement'. In actual fact such moves are meant to cover up the lack of funding for as long as possible. As with bank runs, the first few to make withdrawals may get their money, but, again, once a trickle becomes a flood, the door will close.

more...
http://theautomaticearth.blogspot.com/2010/06/june-14-2010-trickles-floods-and.html

[InkAddict]

74. If those are wood screws, then my share would be the tiny-est

fleck of sawdust...w/which I occasionally get replace my sets of unluxurious undies because that can't wait for Santa...gifts indeed!

[DemReadingDU]

55. New pork slogan

6/15/10 The National Pork Board plans to replace its 23-year-old slogan: "Pork: The Other White Meat." Morning Edition invited fans of the show's Facebook page to come up with a new catchphrase for the industry. One contributor wrote: "Put Pork on Your Fork!"
http://www.npr.org/templates/story/story.php?storyId=127849854
:)

[alterfurz]

60. here's how they pitch it in Saskatchewan

[Roland99]

61. "oink oink"

[ozymandius]

64. "Conquistador coffee brings a new meaning to the word 'vomit'"

Or something like that...

[Dr.Phool]

67. Me and the dog just ate Jimmy Dean.

[TalkingDog]

76. When the Spousal Unit and I were teaching at Morehead State in the late 90's

we became ....obsessed is not quite the word.... intrigued with the local grocery store. It was built in the 70's and looked it. Along the back wall, near the ceiling, were large raised letters that you could read from the front of the store. They were over the meat cases and read:

BEEF CHICKEN FISH PORK MEAT

We spent many hours trying to sort out what "MEAT" could represent, since the other standards were already named. Then one day, in the prepared meats case, we happened upon Old Folks Sausage. A local favorite.

After that my favorite question to bring up conversation was: What's in Old Folks Sausage anyway?

The answer was often: "Pork" followed by a brief pause, then a glazed look horrified realization......

[Dr.Phool]

78. Another reason to never grow old.

[TalkingDog]

75. I can tell you now...that pig won't fly.

The thing about the current slogan is how "sticky" it is. You have to think about it to "get" it. And while your little brain is sorting through all those other "white" meats to figure out which Other one they are talking about, you are holding Pork on the side; just inside your conscious awareness....

a brilliant piece of subliminal advertising.

[Dr.Phool]

77. Denninger: Illinois teachers retirement fund is screwed. Derivatives.

http://market-ticker.denninger.net/archives/2407-To-Illinois-Residents-Move.-Now..html

[DemReadingDU]

81. I doubt Illinois is the only state

Where would someone move to? Most states eventually will unearth these nasty derivatives.

[DemReadingDU]

83. Lawmakers blast oil companies in hearing

6/15/10
U.S. lawmakers blasted major oil companies on Tuesday for "virtually worthless" and "cookie cutter" plans to handle a deepwater oil disaster as top industry executives testified on BP's massive spill in the Gulf of Mexico.

Summoned before the House of Representatives subcommittee on energy and environment, executives from five major oil companies defended their own drilling practices as they sought to stave off the prospect of restrictive new regulations on the industry.

The hearings are a significant risk to BP and to the future of U.S. offshore drilling, as lawmakers begin to consider legislative options to address the Gulf oil spill and to possibly increase the penalties companies will face.

more...
http://finance.yahoo.com/news/Oil-companies-turn-on-BP-at-rb-838221863.html?x=0&sec=topStories&pos=main&asset=&ccode=


and the DOW is up +152
:crazy:

[Dr.Phool]

88. Did they threaten them with a sternly worded letter?

If not, it's just another dog and pony show.

[Demeter]

87. 74F and 77% and no relief in sight

oh, and today is "cooler" than yesterday....right.

There's going to be even less spending, because of the need for air conditioning this month.

Looks like maybe the market has turned the corner--heading down now.

[Dr.Phool]

89. 77% would put your dewpoint at about 63, which is fairly comfortable.

Right now, I've got 90 w/ a dew point of 74, which is 66% and it's miserable.

The dewpoint is the temperature that the air would have to be chilled to become saturated, 100% humidity. The higher the dewpoint the more moisture in the air. Relative humidity is the percentage of moisture relative to it's dewpoint.

[Roland99]

92. 98 here tomorrow. Heat index over 110 I'm sure.

[Roland99]

93. 3:12pm - Markets fighting off America's #1 enemy...

BEARS! (said in my best Colbert voice)

Dow 10,366 +176 +1.72%
Nasdaq 2,296 +52 +2.30%
S&P 500 1,110 +20 +1.83%
GlobalDow 1,808 +24 +1.32%
Gold 1,234 +9 +0.76%
Oil 76.81 +1.69 +2.25%

[TalkingDog]

94. Gold Plated Rocket Ponies for EVERYBODY!!!!! n/t

Unless the Blue Fairy shows up at the last minute.

[RUMMYisFROSTED]

97. JIM!