STOCK MARKET WATCH, Tuesday, October 25, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Tuesday, October 25, 2011

AT THE CLOSING BELL ON October 24, 2011

Dow 11,913.62 +104.83 (+0.88%)
Nasdaq 2,699.44 +61.98 (+2.30%)
S&P 500 1,254.19 +15.94 (+1.27%)
10-Yr Bond... 2.27 +0.03 (+1.39%)
30-Year Bond 3.31 +0.04 (+1.07%)

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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 - Economic Blogs:
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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
Dishonorable Mention: former House majority leader, Tom DeLay

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

Financial Sector Officials Convicted since 1/20/09 = 12

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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

[Pale Blue Dot]

1. Today's Reports

Oct 25 09:00 Case-Shiller 20-city Index Aug -4.0% -3.5% -4.11%
Oct 25 10:00 Consumer Confidence Oct 46.0 46.0 45.4
Oct 25 10:00 FHFA Housing Price Index Aug NA NA 0.8%

Read more: http://www.briefing.com/investor/calendars/economic/#ixzz1bnBMnerV

[Roland99]

32. U.S. home prices up 0.2% in August: Case-Shiller

http://www.marketwatch.com/story/us-home-prices-up-02-in-august-case-shiller-2011-10-25?link=MW_home_latest_news

The S&P/Case-Shiller 20-city composite index rose 0.2% in August, as 10 of 20 cities saw gains. That's the fifth straight month of gains, S&P said Tuesday. On a year-on-year basis, prices are down 3.8%. The 20-city composite is down 30.8% from its peak.

[Demeter]

56. Price increase due to supply constriction

Banks and FNMA AND FREDDIE aren't clearing their books with any diligence or speed. Many private Owners can't sell because they are underwater; they're sitting tight hoping that some miracle will make them solvent so that when they HAVE to sell, they can be clear of debt.

[Roland99]

50. Confidence gauge 39.8 in October vs 46.4 in Sept. (lowest since March 2009)

[Pale Blue Dot]

2. Oil rises to near $92 ahead of Europe debt plan

SINGAPORE – Oil prices rose above $92 a barrel Tuesday in Asia as investors await details of Europe's plan to contain its debt crisis.

Benchmark crude for December delivery was up $1.56 cents at $92.83 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $3.87, or 4.4 percent, to settle at $91.27 in New York on Monday.

Brent crude was up 35 cents at $111.80 a barrel on the ICE Futures Exchange in London.

Oil has jumped 21 percent in three weeks amid growing investor optimism that European leaders will devise a plan to limit the damage from a possible default of Greek sovereign debt. Details of the plan are expected to be announced Wednesday.

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

[xchrom]

13. BP sees Q3 profit rise, to sell off more assets

http://hosted.ap.org/dynamic/stories/E/EU_BRITAIN_EARNS_BP?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-10-25-06-53-13

LONDON (AP) -- BP PLC reported Tuesday that third-quarter profits more than doubled thanks to higher oil prices, with the chief executive saying the results marked a turnaround from the disastrous Gulf of Mexico oil spill.

BP also announced that it now aims to dispose of $45 billion in assets, up from the $30 billion it originally set to raise money to pay for damage from the blowout on the Deepwater Horizon drilling rig on April 20 last year. Eleven rig workers were killed in the explosion and fire.

For the three months ending Sept. 30, BP had a net profit of $4.9 billion, compared with $1.8 billion a year earlier.

Revenue rose 31 percent to $97.6 billion. Brent crude averaged $112 a barrel in the third quarter, up from $77 per barrel a year earlier.

[xchrom]

20. Oil Enters Bull Market With Advance to 12-Week High on Rising Demand Signs

http://www.bloomberg.com/news/2011-10-24/crude-oil-gains-for-a-third-day-in-new-york-climbing-from-12-week-high.html

Oil rose to the highest price in 12 weeks in New York on signs of declining U.S. supplies and speculation European leaders will agree on a fund to contain a debt crisis threatening the region’s economy.

Futures erased this year’s loss after climbing as much as 2.8 percent. Oil has gained more than 20 percent in the past three weeks, putting it in a so-called bull market. Stockpiles at Cushing, Oklahoma, the delivery point for New York crude, fell last week, according to a satellite survey. A report today may show U.S. consumer confidence increased a second month and European leaders will meet tomorrow to decide on a blueprint to tame the region’s debt problems, while Hurricane Rina headed for Mexican oil platforms.

“There are some empty storage tanks in Cushing,” said Olivier Jakob, managing director of Zug, Switzerland-based consultants Petromatrix GmbH. “So we’re going through this glut, and currently stocks are pretty low.”

Crude for December delivery on the New York Mercantile Exchange gained as much as $2.54 to $93.81 a barrel, the highest price since Aug. 2. It was at $93.84 at 12:04 p.m. London time. Yesterday, the contract increased 4.4 percent to $91.27, the highest settlement since Aug. 3. Futures have rallied 23 percent since Oct. 4. A 20 percent gain meets the common definition of a bull market.




***:shrug:

[Roland99]

33. topping $94/bbl

[Demeter]

57. A Wholly Unjustified Speculator Optimism

[xchrom]

62. Russia launches oil link to feed China pipeline

http://uk.reuters.com/article/2011/10/25/idUKL5E7LP30E20111025

* Link to carry 500,000 bpd of oil

* Will help speed up development of new fields

MOSCOW Oct 25 (Reuters) - Russia, the world's biggest crude producer, has launched an oil pipeline that will facilitate the steady supply of 300,000 barrels per day to energy-hungry China and speed up development of new Arctic crude deposits.

The 430 km (270 mile) Purpe-Samotlor pipeline, part of a future trunk going North, will also help top Russian producer Rosneft develop its largest new field, Vankor, to reach an expected output of 500,000 barrels per day (bpd) in 2013.

[Demeter]

3. Very metaphorical cartoon

Is the artist poking fun at the Dutch in particular? As in finger in the dike Dutch?

It doesn't work very well.

European market seems to be having a very nervous day, while the oil speculation ramps up again. There is no change, no direction. there is only greed and fear, simultaneously. And far more greed than fear, unfortunately.

[DemReadingDU]

10. Toles toon

IMO, it can't be much longer when the EU going to burst!

or it won't be long before the workers explode in anger

not poking fun at the Dutch

[Tansy_Gold]

29. I agree, DRDU

Dutch not singled out, since the balloon boy is clearly labeled "E.U." The boy with the finger in the leaking dike is kind of a universal symbol for a heroic but ultimately futile effort.

In this case, however, the "boy" himself is in as much danger of bursting as the dike, which suggests to me that this is approaching the point of being a no-win situation.

And Demeter, I hope you have a better day today. :thumbsup:

[xchrom]

11. how'd your day go yesterday?

:hi:

[Demeter]

14. I survived it

It wasn't fun or educational or anything. Just drudgery. Today I get to do some of my own projects for a bit.

[xchrom]

16. well that's good.

:toast: here's to 5:00pm!

[Pale Blue Dot]

4. U.S. Stock-Index Futures Advance Before Summit

U.S. stock futures advanced as European leaders prepared for tomorrow’s debt-crisis summit and investors awaited earnings reports from United Parcel Service Inc. (UPS) and Amazon.com Inc. (AMZN)

Lowe’s Cos. advanced in early New York trading after Janney Montgomery Scott LLC raised its recommendation on the stock. Netflix Inc. (NFLX) sank 30 percent after posting third-quarter user losses that were worse than its forecast. Texas Instruments Inc. (TXN), the biggest maker of analog semiconductors, slid in Germany after its sales forecast missed analyst estimates.

Standard & Poor’s 500 Index futures expiring in December rose 0.3 percent to 1,251.3 at 11:40 a.m. in London. Dow Jones Industrial Average futures gained 33 points, or 0.3 percent, to 11,858.

U.S. stocks rallied yesterday, almost wiping out this year’s decline in the S&P 500, amid takeover deals, higher-than- estimated earnings at Caterpillar Inc. (CAT) and progress in talks to tame Europe’s debt crisis.

http://www.bloomberg.com/news/2011-10-25/u-s-stock-index-futures-are-little-changed-caterpillar-gains.html

[xchrom]

5. buena manana

:donut:

[Demeter]

58. Man~ana the S*** hits the fan

Should be an interesting day...

[xchrom]

65. I'll send good vibes your way. Nt

[Demeter]

75. I meant in Europe

Although they already announced failure by canceling the finance ministers meeting....

[Demeter]

6. EU’s Naked Short Ban on Sovereign CDS Too Late to Be Effective

http://www.businessweek.com/news/2011-10-20/eu-s-naked-short-ban-on-sovereign-cds-too-late-to-be-effective.html

The European Union’s attempt to ban the use of credit-default swaps to bet against government bonds for any reason other than hedging may be too late to be effective. “Most buyers of sovereign CDS now are genuine holders of government bond portfolios who are worried about downgrades,” said Georg Grodzki, the London-based head of credit research at Legal & General Investment Management, which oversees about $515 billion of assets. “The damage has been done and has become self perpetuating even without speculative bets.” Poland, which holds the rotating presidency of the EU, said it reached the accord with lawmakers from the European Parliament at a meeting in Brussels on Oct. 18. The agreement, which still needs the EU’s formal approval, aims to stop traders speculating on the creditworthiness of states while allowing banks and investors to hedge their holdings of government bonds. German Finance Minister Wolfgang Schaeuble is among European leaders who demanded a ban on so-called naked default- swap trades on government debt, citing concern the practice worsened the euro area’s debt crisis. Speculators use the contracts to benefit as a nation’s creditworthiness declines because the price of the insurance they offer rises as the chances of default mount.

Opt Out

Under the deal announced by the EU presidency, national regulators can suspend the ban if it harms their sovereign debt markets. Only contracts on the bonds of that country will benefit from the exemption, meaning an individual jurisdiction won’t be able to break ranks, said Michael Hampden-Turner, a strategist at Citigroup Inc. in London. “You wouldn’t be able to get around the ban by using the opt-out,” he said. “Anyway, once you kill off the market it’s very difficult to bring it back to life just like that.”...


No Trigger

Default swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements. The contracts can be triggered by a reduction in principal or interest, postponement of payments or a change in the ranking of obligations, according to the International Swaps & Derivatives Association.

The EU’s attempt to ban the use of the contracts for speculation coincides with its efforts to write down Greek debt without triggering the swaps. If successful, it will render banks’ hedges on government debt ineffective without doing anything to resolve the sovereign debt crisis, said New York- based hedge fund manager Peter Tchir. “Naked short bans are on the way and forced restructuring that doesn’t trigger a credit event is the plan,” Tchir said. “Crushing the sovereign CDS market out of existence does nothing to fix the problems.”

[Demeter]

18. Counterparty risk back with a bang

http://www.ifre.com/counterparty-risk-back-with-a-bang/1612133.article

Some of the most important users of over-the-counter derivatives have been moving trades away from institutions perceived as more risky and assigning them to more creditworthy counterparties, senior bankers have claimed. Since the beginning of September, large supranationals, agencies and corporate clients have reportedly been reassessing their counterparty credit exposures to US investment banks in particular, as such firms’ credit default swaps have gapped out.

“We’ve definitely seen some clients reassigning business. When competitors’ CDS have gone dramatically wider, we’ve got calls from clients saying they might like to assign swaps to us and asking for quotes,” said one senior fixed-income banker at a European bank. “Clients are monitoring counterparty credit risk much more actively because many got so badly burnt post-Lehman in terms of the cost of moving their swaps around.” The impact has also been felt on competition for primary deals, with borrowers increasingly likely to award new issue business to banks they are comfortable having as counterparties to associated derivatives.

“The industry has become highly sensitive to this question in the light of the credit deterioration of certain counterparts and the award of new issue business has clearly been impacted by this in deals where cross-currency or interest rate swaps are involved,” said the head of capital markets at a major SSA issuer. Many banks’ CDS spreads have widened dramatically during the past couple of months, with US investment banks being among the hardest hit. In early October, CDS referencing Bank of America hit 456bp, CDS on Goldman Sachs reached 416bp, and CDS on Morgan Stanley were 584bp, according to Markit. CDS referencing all three institutions have since narrowed, but spreads remain more than twice as wide as levels at the start of August.

Clients now monitor dealers’ creditworthiness far more carefully. This is in part a hangover from Lehman Brothers, when even collateralised clients – which are theoretically insulated from counterparty credit risk – found it costly to move trades to other counterparties in the wake of the broker-dealer filing for Chapter 11 bankruptcy. “Since Lehman, people are more prudent in managing their counterparty risk and look more proactively at what exposures they have to ensure they have a balanced portfolio,” said one counterparty credit risk manager at a major institution. Dealers indicate that clients have become more sophisticated in terms of assessing counterparty credit risk, and will concentrate on dealers’ CDS levels as well as monitoring a bank’s credit rating. One senior banker points to 300bp or 350bp as being a crucial threshold in terms of perceived creditworthiness. Consequently, market participants are in disagreement over which institutions are being most actively shunned by clients. Some dealers highlighted Bank of America’s recent credit rating downgrade to Baa1 by Moody’s as significant, but the bank is by no means an outlier in terms of credit spreads. A head of investment banking at a major institution indicated that some clients were moving away from US investment banks in general, and also pointed to French banks – which saw their CDS balloon in mid-September. People close to French banks denied seeing any such activity, however...Officials at US investment banks also denied that clients were moving away, saying trading volumes were flat or even up in some asset classes over the month...Senior bankers at more creditworthy institutions insist clients are looking to reassign swaps, but admit it is on a smaller scale than the post-Lehman deluge. “It’s been about a two out of 10, assuming that the weeks after (the collapse of) Lehman count as a 10,” said the head of investment banking at a European firm...

[Demeter]

7. John Bryson confirmed as U.S. Commerce secretary

http://www.latimes.com/news/politics/la-pn-bryson-confirmedt-20111020,0,3998947.story?track=rss

Former Southern California utility executive John Bryson was confirmed Thursday by the Senate to be President Obama’s next Commerce secretary. Obama's nomination of Bryson initially had run into opposition from Senate Republicans who threatened to withhold support until three long-awaited trade pacts came to fruition. Congress approved the trade agreements last week. With Obama poised to sign the trade deals with South Korea, Panama and Colombia into law Friday, the nomination cleared the Senate. The vote was 74 to 26.

Democratic Sen. Dianne Feinstein of California said Bryson was “well suited” for his new role. Sen. John F. Kerry (D-Mass.) said he was an “exceptional choice.” But Republicans criticized Bryson's views as out of step with American business owners, even as the former energy executive won support from leading business organizations, including the U.S. Chamber of Commerce. Sen. John Barrasso (R-Wyo.) called Bryson “the wrong person at the worst time.”

Bryson served as the chief executive of Edison International and spent several years as president of the California Public Utilities Commission. He co-founded the Natural Resources Defense Council, giving him environmental credentials that put him at political odds with some GOP senators.

He will replace Gary Locke, who resigned to become U.S. ambassador to China.

[DemReadingDU]

8. delete, wrong place

[Demeter]

9. UPDATE: US Data Encouraging But More Easing An Option - Fed's Bullard

http://online.wsj.com/article/BT-CO-20111020-714882.html?mod=dist_smartbrief

The recent spate of U.S. data has provided reasons for optimism, but more monetary stimulus from the Federal Reserve is still an option should the economy weaken further, St. Louis Fed President James Bullard said Thursday. Speaking to reporters on the sidelines of a conference at the St. Louis Fed's headquarters, Bullard characterized a run of stronger-than-anticipated economic figures as "encouraging". But even as economic activity has picked up speed in the last several weeks, Bullard added that a third round of quantitative easing was "still on the table" if conditions should worsen. Bullard is currently not a voting member on the Fed's Open Market Committee, the policy-setting body that calibrates interest rates and monetary policy for the world's largest economy. "Hopefully we've avoided the recession scare we went through this summer," Bullard said. "The special factors that slowed down the economy early in the year will reverse themselves" as the calendar turns to 2012, he said.

Rising inflation, Bullard acknowledged, was a source of concern for the Fed's policymaking assumptions. But he expressed skepticism that the Fed's recent $400 billion efforts to depress long-term borrowing costs, dubbed "Operation Twist", would be effective. His comments echoed those of Philadelphia Fed President Charles Plosser, a noted inflation-fighter who in a speech last week took pointed swipes at the Fed's recent bid to push down long-term government bond yields to spur growth and employment.

Historically, rebalancing the Fed's portfolio of securities has had limited practical import for the economy, Bullard said. In light of this, the St. Louis Fed chief stated that outright asset purchases remained the Fed's "most potent weapon", and did not rule out a third round of bond-buying if the economy took a turn for the worse. "I've been a bit of a skeptic" of Operation Twist, Bullard said. "This has been tried in the past and found not to be very effective." Still, the central banker said it was "reasonable to wait and see how the Twist policy affects the economy, and how it evolves over the next months and quarters", especially as U.S. data has surprised to the upside.

Bullard expressed concern that price pressures were growing at a faster-than-expected pace. Although core inflation--which strips out volatile food and energy prices--remains muted, headline consumer inflation is currently flirting with 4% on an annual basis. That "is making me a little nervous," Bullard said, as the number is well above levels the Fed normally considers comfortable. Nonetheless, he said the Fed's ultra-cheap monetary policies are "appropriate" given the uncertainty that pervades the global economy and intractably high U.S. unemployment, which remains mired above 9%. Bullard said that historically, labor market indicators in developed economies could be either hard to predict or prone to factors outside the bounds of monetary policy. As a result, it could be problematic to calibrate Fed policy decisions based on the unemployment rate...

SHAKES HEAD SADLY

[Demeter]

12. Fed debate about more easing heats up

http://in.reuters.com/article/2011/10/21/idINIndia-60032420111021

Two top Federal Reserve officials are arguing the U.S. central bank should consider resuming controversial large-scale mortgage bond purchases to support a fragile economic recovery. In his first speech explicitly on the economic outlook since joining the Fed in 2009, Fed Governor Tarullo on Thursday said there was "ample room" for policymakers to do more. Tarullo said mortgage bond purchases should be on the table, a sentiment echoed by Boston Fed President Eric Rosengren in an interview with the Wall Street Journal on Wednesday. Tarullo and Rosengren's comments mark the first public discussion of the possibility of more mortgage bond purchases, which were a controversial part of the first round of quantitative easing in 2009. Other Fed officials said on Thursday the Fed's current policy stance is appropriate.

For his part, St. Louis Fed President James Bullard told reporters that with recent economic data looking better, "monetary policy is appropriately calibrated for this situation." Cleveland Fed President Sandra Pianalto also said Fed policy actions were "appropriate." The remarks suggest a growing debate among Fed officials about how aggressively to support an economy that is not growing quickly enough to make a significant dent in an unemployment rate hovering around 9 percent. Pianalto described the economic recovery as "painfully" slow and unlikely to gather pace soon, while Tarullo likened it to a "slogging through the mud and occasionally hitting stretches of dry pavement...There is need, and ample room, for additional measures to increase aggregate demand in the near to medium term, particularly in light of the limited upside risks to inflation over the medium term," said Tarullo, who as a Fed Governor has a permanent vote on monetary policy.

ONGOING HOUSING PROBLEMS

Because the ongoing housing problems are so central to the recession and the anemic nature of the subsequent expansion, the Fed should refocus its efforts on housing, Tarullo said. "I believe we should move back up toward the top of the list of options the large-scale purchase of additional mortgage-backed securities," he added. The Fed bought $1.25 trillion worth of mortgage-related debt, starting in 2009. Given the controversial nature of mortgage bond purchases -- some Fed officials criticize them as propping up a specific sector of the economy. JPMorgan economist Michael Feroli said he did not expect the Fed's policy-setting Federal Open Market Committee to adopt this option anytime soon. "Nonetheless, Tarullo's speech does show that there is a relatively-silent faction on the FOMC that favors continued action to get the economy to grow faster," he wrote in a note to clients. "A faltering in growth or a decline in inflation could further embolden this faction."

Tarullo said the effectiveness of an MBS purchase program could be improved by further action to help borrowers whose mortgages are worth more than their homes. He suggested a government program that helps borrowers whose loans are backed by Fannie Mae and Freddie Mac which could be adjusted, but also said steps could be taken to help underwater borrowers whose loans are not guaranteed by the two government-controlled firms. "Policy changes directed at this last, larger group of homeowners would have to be carefully designed so as not to transfer credit risk from private investors to the government, and could well require legislation," he said.

The Obama administration and the regulator for Fannie Mae and Freddie Mac are expected to unveil new steps to help distressed homeowners in the next week or two, a senior congressional aide said on Thursday.

FERMENT AT THE FED--THINGS MUST BE WORSE THAN WE KNOW

[Demeter]

15. SEC's Examinations Chief Plays the Ethics Card

http://www.securitiestechnologymonitor.com/news/sec-exams-ethics-29423-1.html

The Securities and Exchange Commission is warning financial firms that following the spirit of the law is just as important as the letter of the law.

:rofl: AS IF!

In a speech to the National Society of Compliance Professionals, Carlo di Florio, director of the SEC's Compliance Inspections and Examinations, says that a firm's "ethical culture" will go a long way into deciding just how rigorously the SEC will investigate the firm.

That ethical culture involves whether or not a firm takes a "nonchalant attitude toward compliance and risk management."

Ethics is not just about following federal securities laws but also about good business, said di Floria in his speech. And good business is tied to effectively managing risk on an enterprise-wide basis.

"In the wake of the financial crisis, enterprise risk management is a rapidly evolving discipline that places ethical values at the heart of good governance, enterprise risk management and compliance," said Di Florio.

He defined the roles and responsibilities of different business units as follows:

• The Business: First line of defense for taking, managing and supervising risk effectively.
  
  
• Compliance and ethics or risk management: Second line of defense which need adequate resources, independence and authority to implement effective programs and escalate risk issues.
  
  
• Internal Audit: Third line of defense responsible for providing independent verification and assurance that controls are in palce and operating effectively.
  
  
• Senior Management: The unit responsible for reinforcing the tone at the top to drive a culture of compliance and ethics which will ensure effective enterprise-risk management.
  
  
• The Board of Directors: The unit responsible for overseeing management and ensuring that risk management, regulatory, compliance and ethics obligations are met.
  
  

[xchrom]

17. europe: Novartis plans 2,000 jobs cuts despite profit rise

http://hosted.ap.org/dynamic/stories/E/EU_SWITZERLAND_EARNS_NOVARTIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-10-25-06-54-04

GENEVA (AP) -- Swiss pharmaceutical giant Novartis AG said Tuesday it will cut 2,000 jobs as drug prices come under pressure from governments seeking to reduce health care budgets.

Novartis, which posted a 7 percent increased third-quarter net profit of $2.49 billion Tuesday, said 1,100 jobs will disappear in Switzerland, with a further 900 to be cut in the United States. Some 700 new positions will be created in low-cost countries such as India and China, resulting in a net loss of 1,300 jobs.

"The health care industry is facing a difficult external environment," Chief Executive Joseph Jimenez told reporters in a conference call. "The financial crisis has become a debt crisis and you've got governments around the world that are pushing down prices of pharmaceuticals and other health care products."

Novartis shares fell 2 percent to 50.75 Swiss francs ($57.71) by late morning on the Zurich exchange.

[xchrom]

59. Crisis pushes Spanish bond yields up to 2008 levels

http://www.elpais.com/articulo/english/Crisis/pushes/Spanish/bond/yields/up/to/2008/levels/elpepueng/20111025elpeng_4/Ten

At Tuesday's bill auction, the Spanish Treasury paid the price for the uncertainty surrounding the European Union summit meeting on Wednesday to address the euro-zone sovereign debt crisis.

The Economy Ministry's debt-management government arm was required to push up the yields it offered on three- and six -month bills to levels last seen in 2008.

The government of Italian Prime Minister Silvio Berlusconi was under pressure to turn up at Wednesday's summit with concrete progress on the reform front, while doubts remain over whether an agreement to beef up the European Financial Stability Facility (EFSF) bailout fund will be reached at the meeting.

[xchrom]

19. Caterpillar Profit Signals Exports to Boost U.S. Expansion

http://www.bloomberg.com/news/2011-10-25/caterpillar-s-earnings-signal-exports-to-boost-u-s-expansion.html

Caterpillar Inc. (CAT)’s better-than- estimated profit and sales reinforce forecasts that exports and capital spending will help the U.S. maintain its economic expansion.

The third-quarter earnings announcement by the world’s largest construction and mining-equipment maker pushed U.S. shares higher yesterday as the Standard & Poor’s 500 Index came within 0.3 percent of erasing its 2011 loss. Peoria, Illinois- based Caterpillar said 2012 revenue will gain as the U.S. and world economies improve.

“The global economy is growing, and the American companies that can tap into that broader economy can still post satisfactory results,” said Adolfo Laurenti, deputy chief economist at Mesirow Financial Inc. in Chicago.

Corporate investment in new equipment may have contributed to an acceleration in growth last quarter, along with a pickup in consumer spending. The world’s largest economy probably expanded at a 2.5 percent annual pace in the three months ended in September, according to median estimate of 82 economists in a Bloomberg survey ahead of an Oct. 27 Commerce Department report. That would be the fastest pace in a year.

[xchrom]

21. Gold May Extend Rally to Record $2,200 Per Ounce, AngloGold Ashanti Says

http://www.bloomberg.com/news/2011-10-25/gold-may-extend-rally-to-record-2-200-per-ounce-anglogold-ashanti-says.html

Gold could “easily” rise to $2,200 an ounce in the next two years as costs increase and global financial concerns persist, said the chief executive officer of AngloGold Ashanti Ltd. (AU), the third-largest producer of the metal.

“It costs almost $1,200 to produce an ounce of gold,” Mark Cutifani said at a conference in Perth today. “The gold price probably reflects the fundamentals of the industry.”

AngloGold is boosting capacity to benefit from record prices for the precious metal, which has risen for 10 straight years. Gold has climbed about 16 percent in a year amid concern economic growth in the U.S. and Europe will slow. Futures in New York reached a record $1,923.70 an ounce on Sept. 6.

The gold producer will invest between $1.6 billion and $2.2 billion a year in its projects worldwide in 2012 and 2013, Cutifani said last month. The company expects to produce 4.45 million ounces this year, it said on Aug. 4.

[Demeter]

22. Mainstream Economist: Marx Was Right. Capitalism May Be Destroying Itself

YA THINK?

http://www.alternet.org/newsandviews/article/649635/mainstream_economist%3A_marx_was_right._capitalism_may_be_destroying_itself

Nouriel Roubini is a mainstream economist who teaches at New York University and may be best known as one of the early predictors of the '08 crash.

He is no Marxist.

But today, in an interview with the Wall Street Journal, Roubini admitted that Marx was right about Capitalism and raised the possibility that Capitalism is destroying itself in the way Marx outlined more than a century and a half ago.

I've produced a rough transcript (Roubini's accent gives me some trouble) of the critical portion of this very interesting interview. I urge you to read each word carefully at least once, if not twice.

WSJ: So you painted a bleak picture of sub-par economic growth going forward, with an increased risk of another recession in the near future. That sounds awful. What can government and what can businesses do to get the economy going again or is it just sit and wait and gut it out?

Roubini: Businesses are not doing anything. They're not actually helping. All this risk made them more nervous. There's a value in waiting. They claim they're doing cutbacks because there's excess capacity and not adding workers because there's not enough final demand, but there's a paradox, a Catch-22. If you're not hiring workers, there's not enough labor income, enough consumer confidence, enough consumption, not enough final demand. In the last two or three years, we've actually had a worsening because we've had a massive redistribution of income from labor to capital, from wages to profits, and the inequality of income has increased and the marginal propensity to spend of a household is greater than the marginal propensity of a firm because they have a greater propensity to save, that is firms compared to households. So the redistribution of income and wealth makes the problem of inadequate aggregate demand even worse.

Karl Marx had it right. At some point, Capitalism can destroy itself. You cannot keep on shifting income from labor to Capital without having an excess capacity and a lack of aggregate demand. That's what has happened. We thought that markets worked. They're not working. The individual can be rational. The firm, to survive and thrive, can push labor costs more and more down, but labor costs are someone else's income and consumption. That's why it's a self-destructive process.

The full interview is here. VIDEO http://online.wsj.com/video/roubini-warns-of-global-recession-risk/C036B113-6D5F-4524-A5AF-DF2F3E2F8735.html

[Po_d Mainiac]

36. It's not so much capitalism as

crony-capitalism. There was a time the regulating/watchdog agencys prosecuted fraud and abuse. Today those same agencys insure the fraud will continue.

YMMV

[bread_and_roses]

70. It's capitalism

Capitalism is built on inequality, the premise that it's OK to surrender your labor for less than it's worth, surrender control of your own production, and endless consumption.

The seeds of its own destruction are built into its OS. It only thrives when there is cheap excess labor and endless natural resources. Well, even if we have plenty of the one, we don't have the other.

and trying to pretend we do is killing us and everything else on the planet.

edit to correct type - it is INEQUALITY

[Tansy_Gold]

71. Absolutely. n/t

[Demeter]

23. Tax can never be theft (AND THIS FROM THE LAND OF ROBIN HOOD!)

NOT TRUE--WHEN TAX TAKES THE FOOD FROM YOUR CHILDREN'S MOUTHS AND THE ROOF OVER THEIR HEADS, IT'S THEFT.

http://www.taxresearch.org.uk/Blog/2010/07/05/tax-can-never-be-theft/

The libertarians are back on the blog – but at least the current wave are trying to be polite. With them, however, has returned the claim that “all tax is institutional theft”. So let’s deal with this, simply, straightforwardly, and I suggest in such way that is beyond dispute.

First let’s be clear: no modern society has survived without a government. We have seen states without an effective government, such as Somalia. But that society is failing, and at the end of the barrel of a gun. Assuming that this is not the libertarians wish then government is a fact of life that they must accept – as do all mainstream thinkers. Second, no modern society can survive without property rights that can be protected without resorting to physical violence. Failed states are characterised by property rights enforced by violence. Successful states are associated by property rights enforced by laws passed by governments which can be upheld in courts, set up and maintained by those governments. So, unless libertarians are suggesting that property rights should be enforced through physical violence they must support the right of government to establish, maintain and defend those property rights.

If they do that, though, they concede to government the right to establish just what the right to property is: no one else has that right. All anyone else can do is establish that they have a right that can be evidenced to exist within the structure of laws that a government has established. But that in turn means libertarians must concede the right of the state to make law. Once that right has been conceded, the state also has the right to make other law: including the right to levy tax to ensure that the system of property rights it has established is maintained by law. But this means that tax laws are created by the same process that creates a right to property: the two are indistinguishable. The right to property is the same as the right to tax: both are simple applications of law.

Of course the legitimacy of both laws is dependent upon the legitimacy of the government: as a democrat I assume a government elected on a universal mandate without interference in the electoral process is legitimate. I assume libertarians do so too: if they do not they have to say so. In that case then property rights and taxes are equally legitimate. But they are more than that. They are fundamentally related. For example, the right to enjoy residential property in the UK is protected by law. But attached to it is an obligation to pay property tax. The right to be paid under a contract of or for services is also protected in UK law. It does however have attached the obligation to pay the tax arising on that income. In other words, property is not just a collection of rights. It is a collection of rights and obligations. It is not possible to chose the rights and deny the obligations: if you do you lose the rights. Tax evasion is an attempt to exploit the rights to property without accepting the resulting obligations of ownership. It is rightly illegal. The argument that tax is theft is related to tax evasion: it is denial of the obligations attached to property. In offering that denial those who promote the idea effectively also deny the right to property without resort to illegality – whether that illegality be the use of force to protect the claim to ownership or the use of deception to maintain it. In that case the argument that all tax is theft is not just meaningless; it is either plan wrong or it must be seen as an incitement to illegality. And it is undoubtedly an incitement to infringe the property right of another person – for government is in this sense a legal person acting as proxy for us all in community. In that context the statement is something more still, for it is also vey obviously indicative of corruption, whether of ethics or conduct.

All of which makes the claim that tax is institutional theft a profoundly unattractive sentiment worthy of resounding condemnation by all who believe in democracy, the rule of law and society itself.

[Demeter]

24. The Class War Has Begun By Frank Rich (WHERE HAS HE BEEN?)

http://nymag.com/news/frank-rich/class-war-2011-10/

During the death throes of Herbert Hoover’s presidency in June 1932, desperate bands of men traveled to Washington and set up camp within view of the Capitol. The first contingent journeyed all the way from Portland, Oregon, but others soon converged from all over—alone, in groups, with families—until their main Hooverville on the Anacostia River’s fetid mudflats swelled to a population as high as 20,000. The men, World War I veterans who could not find jobs, became known as the Bonus Army—for the modest government bonus they were owed for their service. Under a law passed in 1924, they had been awarded roughly $1,000 each, to be collected in 1945 or at death, whichever came first. But they didn’t want to wait any longer for their pre–New Deal entitlement—especially given that Congress had bailed out big business with the creation of a Reconstruction Finance Corporation earlier in its session. Father Charles Coughlin, the populist “Radio Priest” who became a phenomenon for railing against “greedy bankers and financiers,” framed Washington’s double standard this way: “If the government can pay $2 billion to the bankers and the railroads, why cannot it pay the $2 billion to the soldiers?”

SOUNDS FAMILIAR

The echoes of our own Great Recession do not end there. Both parties were alarmed by this motley assemblage and its political rallies; the Secret Service infiltrated its ranks to root out radicals. But a good Communist was hard to find. The men were mostly middle-class, patriotic Americans. They kept their improvised hovels clean and maintained small gardens. Even so, good behavior by the Bonus Army did not prevent the U.S. Army’s hotheaded chief of staff, General Douglas MacArthur, from summoning an overwhelming force to evict it from Pennsylvania Avenue late that July. After assaulting the veterans and thousands of onlookers with tear gas, ­MacArthur’s troops crossed the bridge and burned down the encampment. The general had acted against Hoover’s wishes, but the president expressed satisfaction afterward that the government had dispatched “a mob”—albeit at the cost of killing two of the demonstrators. The public had another take. When graphic newsreels of the riotous mêlée fanned out to the nation’s movie theaters, audiences booed MacArthur and his troops, not the men down on their luck. Even the mining heiress Evalyn Walsh McLean, the owner of the Hope diamond and wife of the proprietor of the Washington Post, professed solidarity with the “mob” that had occupied the nation’s capital.

The Great Depression was then nearly three years old, with FDR still in the wings and some of the worst deprivation and unrest yet to come. Three years after our own crash, we do not have the benefit of historical omniscience to know where 2011 is on the time line of America’s deepest bout of economic distress since that era. (The White House, you may recall, rolled out “recovery summer” sixteen months ago.) We don’t know if our current president will end up being viewed more like Hoover or FDR. We don’t know whether Occupy Wall Street and its proliferating satellites will spiral into larger and more violent confrontations, disperse in cold weather, prove a footnote to our narrative, or be the seeds of something big.

What’s as intriguing as Occupy Wall Street itself is that once again our Establishment, left, right, and center, did not see the wave coming or understand what it meant as it broke. Maybe it’s just human nature and the power of denial, or maybe it’s a stubborn strain of all-­American optimism, but at each aftershock since the fall of Lehman Brothers, those at the top have preferred not to see what they didn’t want to see. And so for the first three weeks, the protests were alternately ignored, patronized, dismissed, and insulted by politicians and the mainstream news media as a neo-Woodstock for wannabe collegiate rebels without a cause—and not just in Fox-land. CNN’s new prime-time hopeful, Erin Burnett, ridiculed the protesters as bongo-playing know-nothings; a dispatch in The New Republic called them “an unfocused rabble of ragtag discontents.” Those who did express sympathy for Occupy Wall Street tended to pat it on the head before going on to fault it for being leaderless, disorganized, and inchoate in its agenda...

[xchrom]

25. asia: Asian Stocks Swing Between Gains, Losses Ahead of European Crisis Summit

http://www.bloomberg.com/news/2011-10-25/asia-stocks-rise-on-caterpillar-earnings-optimism-on-european-debt-crisis.html

Asian stocks swung between gains and losses as investors await the results of a European summit tomorrow where leaders are expected to hammer out details on enhancing the region’s bailout fund.

Esprit Holdings Ltd. (330), a clothier that gets 79 percent of its revenue in Europe, lost 2.8 percent in Hong Kong. NGK Insulators Ltd. plunged 17 percent after a report the maker of industrial ceramics asked customers not to use some of its batteries following a fire. Komatsu Ltd. (6301), the world’s second- biggest construction machinery maker, rose 3.1 percent as rival Caterpillar Inc. (CAT)’s posted earnings that beat estimates. Cnooc Ltd. (883), China’s largest offshore energy explorer, rose 5.4 percent in Hong Kong after crude prices gained.

The MSCI Asia Pacific Index was little changed at 119.23 at 8:48 p.m. in Tokyo after rising and falling as much as 0.3 percent. About five stocks fell for every four that rose on the index, with six of the gauge’s 10 industry groups retreating. German Chancellor Angela Merkel and fellow European leaders will meet in Brussels tomorrow for a second summit in four days to find ways to enhance the firepower of a regional rescue fund.

[xchrom]

27. BlackRock Sees Slowdown of China GDP Growth

http://www.bloomberg.com/news/2011-10-24/china-s-gdp-engine-gets-less-mileage-as-blackrock-sees-slowdown-to-7-pace.html


A near doubling in the Chinese economy’s reliance on credit over the past decade will prompt slower growth in coming years, risking diminished returns for investors, according to research by BlackRock Inc.

China’s gross domestic product will rise at a 7 percent to 8 percent pace in the next few years, said analysts at the BlackRock Investment Institute, a London-based unit of the world’s biggest money manager, down from 10.5 percent in the past decade. One yuan of GDP now needs about 0.30 yuan of credit, compared with 0.17 yuan in 2002, a shift BlackRock describes as like a car getting less mileage per gallon of gas.

Premier Wen Jiabao’s decision to loosen some lending curbs this month amid weakening prospects for U.S. and European demand for exports underscores the reliance of the world’s second- largest economy on credit. The country’s banking regulator said yesterday it will allow a higher bad-loan ratio for small companies that have been hardest hit by a slowdown in borrowing engineered to rein in inflation.

“China is becoming a less profitable place to invest,” Neeraj Seth, Singapore-based head of Asian credit for BlackRock, which manages $1.1 trillion of fixed-income assets globally, said in a telephone interview. “Growth requires an ever- increasing quantity of inputs.”

[xchrom]

26. south asia: Reserve Bank of India Raises Rates, Signals End to Cycle on Growth Concern

http://www.bloomberg.com/news/2011-10-25/india-increases-key-rate-signals-end-of-tightening-cycle-as-growth-slows.html

India raised interest rates for a 13th time since the start of 2010 and signaled it’s nearing the end of its record cycle of increases as the economy cools. Bonds and stocks rose.

“The likelihood of a rate action in the December mid- quarter review is relatively low,” the Reserve Bank of India said in a statement in Mumbai today after it boosted the repurchase rate to 8.5 percent from 8.25 percent. Eighteen of 28 economists in a Bloomberg News survey predicted the decision and the rest forecast no change.

Governor Duvvuri Subbarao is under pressure to shield India’s economy from Europe’s debt crisis and a faltering U.S. recovery, after counterparts in Brazil and Russia lowered borrowing costs in recent weeks. The Reserve Bank today cut India’s growth estimate, predicting the second-slowest expansion in nine years, and blamed the government’s “expansionary” budget for stoking inflation.

“The damage that rate increases are starting to inflict on the economy is getting larger,” said Sanjay Mathur, Singapore- based head of research and strategy for non-Japan Asia at Royal Bank of Scotland Group Plc. “It’s now time to assess the impact of the previous rate hikes on the economy and that’s a very appropriate stance.”

[Demeter]

28. HOW TO HUMBLE A BOSS

[Tansy_Gold]

31. "A Bag of Moss" -- a.k.a.

a 5-gallon bucket of pig shit.

[Demeter]

30. India raises rates amid growth warnings

India has raised benchmark lending rates for the 13th time since March 2010 in a dogged effort to combat near double-digit inflation at the cost of higher economic growth.

The Reserve Bank of India on Tuesday raised the repo rate – the rate at which the central bank lends to commercial banks – 25 basis points to 8.50 per cent after its quarterly policy review meeting.

The rate increase comes despite other emerging economies including Brazil, Turkey and Indonesia cutting rates in recent weeks in anticipation of a global slowdown.

Read more >>
http://link.ft.com/r/A1TNOO/YBVY1L/VTVRG/KQQYY9/R3H4OE/82/t?a1=2011&a2=10&a3=25

[Demeter]

34. Seven-point plan to save the eurozone

George Soros outlines ways to forge a united front and resolve the sovereign debt crisis

Read more >>
http://link.ft.com/r/5F39HH/GDJHTX/EKRAI/2OOGBR/8ZXNC2/D5/t?a1=2011&a2=10&a3=24

WHAT'S IN IT FOR HIM?


1) Member states of the eurozone agree on the need for a new treaty creating a common treasury in due course. They appeal to European Central Bank to co-operate with the European financial stability facility in dealing with the financial crisis in the interim – the ECB to provide liquidity; the EFSF to accept the solvency risks.

2) Accordingly, the EFSF takes over the Greek bonds held by the ECB and the International Monetary Fund. This will re-establish co-operation between the ECB and eurozone governments and allow a meaningful voluntary reduction in the Greek debt with EFSF participation.

3) The EFSF is then used to guarantee the banking system, not government bonds. Recapitalisation is postponed but it will still be on a national basis when it occurs. This is in accordance with the German position and more helpful to France than immediate recapitalisation.

4) In return for the guarantee big banks agree to take instructions from the ECB acting on behalf of governments. Those who refuse are denied access to the discount window of the ECB.

5) The ECB instructs banks to maintain credit lines and loan portfolios while installing inspectors to control risks banks take for their own account. This removes one of the main sources of the current credit crunch and reassures financial markets.

6) To deal with the other major problem – the inability of some governments to borrow at reasonable interest rates – the ECB lowers the discount rate, encourages these governments to issue treasury bills and encourages the banks to keep their liquidity in the form of these bills instead of deposits at the ECB. Any ECB purchases are sterilised by the ECB issuing its own bills. The solvency risk is guaranteed by the EFSF. The ECB stops open market purchases. All this enables countries such as Italy to borrow short-term at very low cost while the ECB is not lending to the governments and not printing money. The creditor countries can indirectly impose discipline on Italy by controlling how much Rome can borrow in this way.

7) Markets will be impressed by the fact that the authorities are united and have sufficient funds at their disposal. Soon Italy will be able to borrow in the market at reasonable rates. Banks can be recapitalised and the eurozone member states can agree on a common fiscal policy in a calmer atmosphere.


SOUNDS LIKE BS TO ME...

[Po_d Mainiac]

42. Another plan

to map out a coarse for a plan which may lead to a plan to save the ECB, which didn't plan on ever having to admit it's TBTF stress test plan was poorly planned.

All this as the Eurozone puplic is getting tired of trying to plan for survival.

Once the CDS's start getting triggered, the plan to keep the 'shadow banking' outa sight becomes just fresh load of brown stuff hurling towards moving blades.

[xchrom]

43. +1

[tama]

77. Plan Z

Socialize banks, ban usury.

[Demeter]

35. Millionaires Control 39% of Global Wealth

http://blogs.wsj.com/wealth/2011/10/19/millionaires-control-39-of-global-wealth/?mod=WSJBlog

The world’s millionaires and billionaires now control 38.5% of the world’s wealth.

According to the latest Global Wealth Report from Credit Suisse, the 29.7 million people in the world with household net worths of $1 million (representing less than 1% of the world’s population) control about $89 trillion of the world’s wealth. That’s up from a share of 35.6% in 2010, and their wealth increased by about $20 trillion, according Credit Suisse.

The wealth of the millionaires grew 29% — about twice as fast as the wealth in the world as a whole, which now has $231 trillion in wealth.

The U.S. has been the largest wealth generator over the past 18 months, according to the report, adding $4.6 trillion to global wealth. China ranked second with $4 trillion, followed by Japan ($3.8 trillion), Brazil ($1.87 trillion) and Australia ($1.85 trillion).

There are now 84,700 people in the world worth $50 million or more — with 35,400 of them living in the U.S.. There are 29,000 people world-wide worth $100 million or more and 2,700 worth $500 million or more.

The fastest growth in the coming years will be in China, India and Brazil. China now has a million millionaires. Wealth in China and Africa is expected to grow 90%, to $39 trillion and $5.8 trillion respectively, by 2016. Wealth in India and Brazil is expected to more than double to $8.9 trillion and $9.2 trillion respectively.

[Demeter]

37. THE GADDAFFI FALLOUT (VIDEO)

What happens when you fail to allow your people and national resources to be plundered by international corporations and the IMF?

An animated interview of John Perkins, author of 'HoodWinked' and 'Confessions Of An Economic Hitman' http://www.youtube.com/watch?v=n7Fzm1hEiDQ&feature=player_embedded

Gaddafi's Murder and International Law
http://www.youtube.com/watch?v=v5u4GmPbM3o&feature=player_embedded#!

[Demeter]

38. MORE VIDEOS

Prosecute The Banks In 2012
Greater Employment - Less Fraud
Dylan Ratigan MSNBC

http://www.informationclearinghouse.info/article29460.htm

[kickysnana]

39. Re: New underwater loan re-fi scheme...

I have two relatives that are in this situation but I fail to see how refinancing an underwater loan with all the fees and points is anything but busywork. I do not see the loans going through any better than the mortgage bail out scheme and isn't there a hide the derivatives clause in this?

I spent 1999-2000 trying to get a $10k rehab loan on our paid off home from Countrywide through Acorn but Countrywide just kept kicking it back wanting us to refinance 60% of the value of the home. We resubmitted 3 times entirely and sent papers weekly for 24 months. The guy at Acorn finally had enough and quit Acorn (I am sure our case was just one of many) and we just let it go.

In a WTFATT moment it is reported that our Administration is going to approve lying about availability of FOI requests. How can anyone vote for someone who does that?

My wake-up thought today: Life's a beach and then you die.

Hope you are all in better places.

[Po_d Mainiac]

49. Correct

It totally fails to address loans in the aquaculture realm. Not until the banksters are forced to mark to market will there be any incentive to place realistic values on RRE and CRE. Nor will it do anything to clear the system of the massive backlog of inventory clogging the market

[Demeter]

40. "This One Could Take Them All Down." By Chris Hedges VIDEO

Chris Hedges: "What happens is in all of these movements ... the foot soldiers of the elite -- the blue uniformed police, the mechanisms of control -- finally don't want to impede the movement and at that point the power elite is left defenseless ... the only thing I can say having been in the middle of similar movements is that this one is real, and this one could take them all down ... I can guarantee you that huge segments of those blue uniformed police sympathize with everything that you're doing." -- Pulitzer Prize winner Chris Hedges brings his 20 years of experience as a war correspondent, having covered movements and revolutions throughout the the world, to the discussion.

http://www.youtube.com/watch?v=Tj8UlxhfJLw&feature=player_embedded

[tclambert]

41. What happened to silver and gold? I haven't paid attention for awhile,

but now I see silver is down almost to its price at the beginning of the year. It was $30.67. Now it's $31.70. On April 28th, it hit $48.70. And it was in the 40's in mid-September. Then came a sharp plunge. Anybody know what happened?

Gold I remember being over $1800 an ounce. Now it's around $1650. Again a big plunge took place in mid-September. Was it the political games with the debt ceiling? I thought in times of economic peril, precious metals were supposed to go up.

[AnneD]

64. IMHO...

Serious manipulation going on. They are saying when the dollar goes up gold goes down. They have said the Euro won't collapse and they will back Greece the dollar goes up, etc etc etc.

This is what I know 1) they have sold more gold certificates than what is available. 2)the US economy is not all that good and the dollar not all that strong. 3)gold is not being made (unlike fiat currency)

TBTB have extracted investors wealth out of gold, they are extracting money from stocks and the pensions that own stocks. One of the few places to hold your money safely is in gold. Inflation, deflation, it doesn't matter, your wealth or the spending power is preserved.

I hear buzz that China may one day have a gold backed yuan. When that happens, the bottom will drop out here. And one thing I firmly believe....our leaders would sell us out in a heartbeat.

The current downturn is a bump in the road. Over the long term, I and still bullish on gold for the foreseeable future and for some of the reasons I mentioned.

[Demeter]

44. The End Of Free Trade Is The Only Way Out Of This Depression By Scott Cruickshank

http://www.informationclearinghouse.info/article29455.htm

...For the first 75 years of the 20th century, "family farm America" had great years. It produced a surplus of everything year after year after year. Then came the pivotal year of 1975. That was the last year the American economy produced a surplus of goods to trade overseas. It has not done so since. What is remarkable is how fast the bank account emptied and the debt piled up. There is a chart you can download at the link at the bottom of the page that illustrates the rocket sled ride to ruin. The chart covers the period from WWII, when good economic figures began to be compiled, to the present day. The chart traces the US trade surplus/deficit, US household debt, US corporate debt, and the US Federal Debt. For the period from WWII to 1975, during the surplus years, the debt charts were essentially at a flat line. After 1975, the debt in all categories took off like a rocket ship. What that chart is showing is that the moment national production falls beyond subsistence levels, the borrowing to make up the difference begins, and only accelerates from there.

What I hope you’ll come to understand, what the charts show, is that there is no way out of this depression we’re in right now unless America and the rest of the West starts producing again. That is a demand you must add to your #Occupy America wish list. TARPs will do nothing. Temporary job programs will do nothing. Raising or lowering taxes on who and for how much will not matter. Minting more money will do nothing. Economic protectionism at the border and economic production within is America’s only salvation...

SEE CHARTS AT LINK

[Hotler]

52. Any more I do not know whether to laugh or cry. eom.

[Demeter]

54. I have no hope; I see no way out of the catastrophe that is coming

Living with no expectations and hoarding is the only solution I can see for the coming year. If you have something you don't need, sell it to any fool that wants it and either pay off debt or buy something of value. Like photovoltaics or medicine or other necessities. Even cloth and sewing supplies would be a better store of value (if bought cheaply), or raising rabbits with the nice furry pelts and meat, provided you know how to feed them without Purina Big Ag products and the zoning laws don't scotch your plans.

How long will this continue? What could stop it?

1. One of the pirates pulls the rug out from under the rest, like Joseph Kennedy was said to have done. Have to be one of the real Biggies, though.

2. One government throws the pirates in jail and starts a sovereign bank. Andrew Jackson did this way back.

3. War. A BIG war. Probably the end of everything if that happens.

4. A rebellion with a little more smarts than Egypt's, and it would probably have to be here in the US for it to have any permanent effect. I doubt that England or France or Russia could pull it off, and the Germans never would even dream of it.

5. An invasion by China. Not gonna happen--they aren't ready.

What a grim bunch of options. And the best are the least likely.

[Demeter]

45. Looks Like Somebody Shot the Confidence Fairy

"clap your hands if you believe in fairies!"

It looks like the game plan was to go for 12,500 again by Xmas, if not the election.

Why? It's only a number.

[DemReadingDU]

46. Karl Denninger: Netflix (NFLX) Detonates; 3M Follows Suit

also writes about Ponzi schemes

10/25/11 Neflix (NFLX) Detonates; 3M Follows Suit

There are three lessons embedded in this chart. (see chart at link)
The first is that exponential (compound) growth does not last forever.
The second is that when (not if) the party ends, the usual path is straight down, while the climb up was (by comparison) rather sedate.
And the third is that you can make it much worse by doing stupid things.

Netflix was a prime example of all three in action . The firm sold the market on the premise of "everlasting growth." That premise forgot the fact that they had created the "brand" on the back of a skeptical industry that underpriced their services - and that these "teaser rates" for content access would end. There was no way for Netflix to win on this, as they'd either fail outright or the content cost ramp would nail them if they were "successful." These risks were disclosed and nobody paid attention to them.
.
.
The next two are Apple and Amazon. Amazon will undoubtedly get a lift from its Kindle Fire (which I like at the pricepoint) but the big story that is not being reported upon widely is Apple and the damage being done to the iPad marketplace. Android is going to eat their lunch just as Android is eating into the iPhone.

Finally, 3M (MMM) blew up this morning as well with a nasty miss; the story there is Europe. So many people are ignoring the rumblings from the equivalent of Mt. Vesuvius and it's beyond dumb into the realm of complete idiocy. Europe is another group of relatively high-income, high-consumption people that was also funded on the back of exponential growth in leverage. In case you've had your head buried in the sand for the last year and change that story is coming apart at warp speed.

This is the story folks, and just as with Netflix it is not being paid attention to by the fanboys. Apple's miss .vs. "expectations" is likely the first of many. The fact of the matter is that the global economy ponzi is about out of gas and the ability to refill the tank has expired. Europe is a big market and is in big trouble and it's going to come here. Asia is slowing irrespective of what people would like to believe and China has a monstrous lending bubble that has a pin poised right on its edge; when (not if) their "compound growth" engine detonates the civil unrest will tear the nation apart. The various arb games are very long in the tooth, whether it's Amazon's exploitation of sales tax arb over state lines or Apple's fanboy customer base. The entire technology "we'll build it all using slave labor in China" meme is basically over; Foxconn is replacing people with robots and the "cheap labor" will be forced out one way or another. Those who believe that the "consumer will rise" in the east are deluding themselves; the people in that part of the world have neither the ability to earn at the level required to consume on a parity basis nor can that come "online" in a reasonable amount of time. Oh sure, on the margin their consumer power will increase over time, but that's not an instant process and the resource issues that must be resolved are real. The premise that 3 billion people will turn into nations full of "iwantandwillhaveallthecheapcrapAmericanshave", buying it all with credit, is idiotic and yet it is the premise on which the "global expansionist" claims are founded. Remember that the entire business model of these firms with tablets and smartphones is predicated on a $10/unit or less assembly cost from component to final which implies effective slave labor conditions. This is a ponzi scheme and as with all ponzi schemes when the last sucker is "in" everyone who didn't quietly take their chips off the table and cash them loses their entire stack, as the banker has no money to pay you.

The play on the long side here in the market with respect to Internet Bubble Part Deux is over. It was never real; the entire thing was just another ponzi in the long line of them in this country and elsewhere. If you made money on the way up that's great, but remember one thing: The "profit" you claim to have made is not real until it is reduced to cash.

a bit more...
http://market-ticker.org/akcs-www?post=196515

[Demeter]

48. NO NEED TO POST ANYTHING AFTER THAT

He said it all. The only remaining question is when and in what order.

And the only remaining problem is how to stand down the military while this all gets sorted out.

[tama]

78. How?

Ask them to join we the 99,999...% of the OccupyOurLives movement. That is what is being done and many vets are joining and getting organized, also some police forces are already refusing to follow orders to disrupt occupy movement.

Policemen and soldiers are people. This movement is about we the people - our last chance to rEvolution to adapt and keep evolving without too much unnecessary suffering. Banks, corporations, military-industrial complex etc. are not people, they are parasite structures, super-egos.

[Hotler]

53. That was painful. Now I am crying. n/t

[bread_and_roses]

67. Well, then. seconding Demter and Hotler (n/t)

[Demeter]

47. Don’t Be Suckered Into Buying a House Now By Mike Whitney

AT LEAST, NOT WITH A MORTGAGE

http://www.informationclearinghouse.info/article29444.htm

Don’t even think about buying a house for the next year or so. Not unless you can afford to flush tens of thousands of dollars down the toilet, because that’s what you’ll be doing...Here’s what’s happening. As everyone knows, housing is driven by the same supply-demand dynamics as every other market. The problem is, the banksters have gamed the system so it looks like there’s less inventory then there really is, so prices are higher than they should be. By keeping millions of homes off the market the banks are protecting themselves from bigger losses. Unfortunately, it’s the buyer who ends up being the victim in this market-rigging scam.

Now take a look at this goofy article in Monday’s Wall Street Journal and I’ll try to explain what’s really going on:

“The housing market, which has struggled with an oversupply of homes for years, is facing a new problem: a lack of attractive inventory.

There were more than 2.19 million homes listed for sale at the end of September, down 20% from a year earlier, according to a new report from the real-estate website Realtor.com. That is the lowest level since the company began its count in 2007.

The report is the latest sign of how the U.S. housing market can’t seem to catch a break. While falling inventories are typically a sign of health, because reduced competition can boost prices, that isn’t the case right now.

Instead, real-estate agents say, people are pulling their homes off the market rather than try to sell them at today’s discounted prices. At the same time, banks have been more slowly moving to take back properties through foreclosure ever since processing irregularities surfaced last fall, temporarily reducing the supply of foreclosed properties. The shrinking supply isn’t driving up prices because demand is soft.

Yet there is still a substantial “shadow” supply of foreclosures and other distressed homes, estimated to be more than one million, that is likely to stream onto the market in the coming years. The pent-up supply is another constraint on any of the price gains that might normally occur when supply falls.” (“Slim Pickings Are Latest Headache for Home Sales”, Wall Street Journal)

Excuse me? Shadow inventory is around “one million” homes? You’ve got to be kidding?

There’s so much wrong with this article, it’s hard to know where to begin. First of all, the reason why people aren’t scarfing up homes at current prices has nothing to do with the “lack of attractive inventory”. That’s a load of malarkey. It’s because they no longer have confidence in the system. And why would they? After all, they’ve just seen their family and friends just get reamed in the biggest mortgage fraud scam in history. Are they supposed to go rushing back in to the market with money-in-hand so they can get fleeced too? Not likely. Besides, owning a house isn’t what it used to be. Not by a long shot. It used to be the cornerstone of the American dream and entre’ into the middle class. No more. Owning a house today means that one is shackled to a sinking asset that limits one’s options and mobility. Let’s face it, that 5-bedroom McMansion with the marble countertops is the albatross that keeps people toiling-away in the cube-farms until the day they get carted off to Potter’s Field. A 30-year mortgage is a 30-year prison sentence.

Also, the whole “falling inventories” story is pure bunkum. The housing backlog has mushroomed in recent years eclipsing anything in the history of the industry. The banks are just keeping homes off-market to save their own bacon. The whole thing is a joke. The only reason the charade goes on is because the government is in bed with the banks–concealing the details–so the rip off can continue without pause. It’s just more industrial-scale collusion.

Now check out this clip from an excellent report by McClatchy News:

“The housing market’s ballooning shadow inventory — buoyed by a yearlong foreclosure slowdown — stands as the most menacing obstacle to the recovery of the residential real estate market….

A McClatchy analysis of four years of foreclosure data and thousands of property records found record-high levels of shadow inventory in several housing markets across the nation.

In the supply-and-demand-reliant real estate market, the national supply of homes is officially listed at about 3.5 million, or about nine months’ worth; sales are on track to reach about 5 million this year. But once shadow inventory is added, that supply more than doubles, to at least 7.5 million…..(“Millions of homes lurk on bank inventories, casting doubts of rebound”, McClatchy News)

Got that? The real supply of homes is actually “double” the amount that’s being reported. So that means that the $400,000 rambler Mr Jones is planning to buy with his hard-earned money is probably worth about, uhm, $200,000. So, Mr.Jones is basically getting bent-over by the bankers while Uncle Sam sits in the bleachers applauding. Isn’t that what’s going on? And everyone wonders why public confidence is so low?

More from McClatchy:

“In the aftermath of the largest home-repossession campaign in history, mortgage lenders are holding properties off the market as a matter of strategy. …. a growing number of vacant homes have sat idle on banks’ balance sheets for several years.

According to the data firm CoreLogic, which has one of the more conservative estimates of shadow inventory, mortgage debt outstanding in the shadow inventory is about $336 billion. Liquidating REO homes through the sales process usually leads to significant write-downs on bank balance sheets.

Wary of seeing such large losses appear in earnest on their books, lenders have been reluctant to deal with bad loans head-on, said Ira Rheingold, the executive director of the National Association of Consumer Advocates.

“They’re afraid,” he said. “They don’t want to take those paper losses. Their books show that they have these assets that are worth ‘X’ amount of money. But those values are not real.”…”

“Afraid?” The banks are afraid? The banks may be broke, busted, underwater, insolvent, and kaput, but “afraid”?...No, they’re not afraid. Why would they be? They have powerful friends in Washington who will bail them out whenever they get into a jam. Just look at the Fed’s balance sheet; $2 trillion and rising. And every dollar spent was gifted to some shifty Wall Street bankster who got caught up in his own crooked Ponzi-swindle.

McClatchy again:

“The outlook for shadow inventory has worsened considerably over the last year because of lender paperwork problems that have gummed up the foreclosure system….

More than a million foreclosures that were supposed to be completed this year have been pushed into the future, prolonging the housing crisis, RealtyTrac found….

Nationwide, there are 2.2 million homes stuck somewhere in the foreclosure process, and many of those cases have completely stalled…

Additionally, banks aren’t selling homes fast enough to justify more aggressive foreclosure filings. Even at the currently slowed pace, foreclosure starts are three times higher than foreclosure sales are, meaning that properties are being loaded onto the conveyor belt much faster than they’re being taken off.

“It’s kind of like a pig in a python,” Blomquist said. “As you start to see more of foreclosure sales and that inventory is cleared out, then you’ll begin to see more new filings.” (“Millions of homes lurk on bank inventories, casting doubts of rebound”, McClatchy News)

Okay. So, housing sales have stalled, foreclosures are stacked up from here to kingdom-come, and Obama and his GOP cohorts are determined to cut public spending and shave entitlements. Doesn’t that sound a bit like a deflationary spiral to you?

Bottom line: Prices have only one way to go; down, down, DOWN.

Still thinking about buying a house?

[xchrom]

51. Dark inventory and the death of markets

http://www.atimes.com/atimes/Global_Economy/MJ26Dj02.html

The collapse of Lehman Brothers in October 2008 is already recognized as a crucial point of peak credit. But the intervening three years now appear to show that it may have been the point at which the current generation of markets died.

The response of the US government to the credit crash was firstly to reduce interest rates to zero and secondly to create trillions of


new dollars and inject them into the financial economy by buying government and other debt - so-called Quantitative Easing (QE).

The reaction of investors, who rightly feared inflation, was a rush to buy anything but dollars. A huge wave of investment poured into a new generation of funds such as exchange traded funds (ETFs) and Index Funds which invest directly in equity and commodity markets.

These "inflation hedger" investors are not greedy speculators aiming for a quick transaction profit but the complete opposite: they are risk averse investors who simply wish to preserve the value of their assets over the medium and long term.

[DemReadingDU]

55. Gordon Long: "Fiat" Currency Structure Failure

I found the above graphic within this 2010 series by Gordon Long

3/12/10 SULTANS OF SWAP: ACT I - Smoking Guns!
http://www.gordontlong.com/2010/Article-Sultans_of_Swap-Smoking_Guns.htm

3/19/10 Sultans of Swap: ACT II - The Sting!
http://www.gordontlong.com/2010/Article-Sultans_of_Swap-The_Sting.htm

3/25/10 SULTANS OF SWAP: ACT III - The Get Away!
http://www.gordontlong.com/2010/Article-Sultans_of_Swap-The_Getaway.htm

[Demeter]

60. You Can Fight The Federal Reserve Right Now By Scott Cruickshank

http://www.informationclearinghouse.info/article29369.htm

There exists today , right now, a little bronze bullet that strikes fear into the black heart of Ben Bernake like nothing else. It is the $1 US coin that everybody has seen but few like. This lowly little coin that most Americans consider a nuisance, is actually the best friend any American ever had. Those little gems are minted by the U.S. Treasury, and that’s what makes them so dangerous to FED bankers like Bernake and so dearly beloved to you. They are free money, just like Lincoln’s greenbacks and Kennedy’s silver certificates that you may have heard of. Unlike $1 Federal Reserve Notes; you don’t pay one red cent in interest to anyone when a dollar coin is minted and issued by the US Treasury Department. The treasury just mints them and spends them into circulation. If you’ve ever listened to Bill Still, the money guy, this is exactly the kind of free money he's talking about. It already exists. There is no need to create it. You the American people just need to start using it.

Ben Bernake and his Federal Reserve co-conspirators fear the dollar coin so much, that they have collected and are currently hoarding more than a billion of them in Federal Reserve Bank vaults. That’s roughly half the US supply. Why? Because every dollar coin the FED pulls out of circulation can be replaced with a Federal Reserve Note lent at interest to the American people. If you don’t want to use free and clear US money, the FED will gladly lend you theirs. The FED doesn’t want you to use the coins. They don’t want you to get used to using them. And for a certainty, they don’t want you demanding more, a $2 coin, a $5 coin a $10 coin.

Sure you hate change in your pocket and you don‘t like the thought of having to carry around even more. It sucks, I agree. But look at it this way. For a the price of a minor inconvenience you get to steal your country back from Ben Bernake. He’ll die and wither on the vine if you stop using his Federal Reserve Notes, and you can start doing it tomorrow. That deal is so cheap you’d be a fool to pass it up. Your country that you love, for a few more coins you have to carry around. Convinced? Ok. There are three things you can do tomorrow to start taking your country back.

1. When you go into the drugstore and the girl opens the till to give you your three dollars change, look in the till. If she has any dollar coins ask for them. Tell her you want them more than you want bills. Thank her when she gives them to you. Ask for them at the bank too when you make a withdrawal and spend them all over town.

2. Then go and tell all your friends about the magic bullet that’s going to blow Bernake’s head off and encourage them to use the $1 coins as much as possible.

3. Call your congressman and make the following demands: You want him/her to force the FED to release all $1 US coins they have stolen from you back into immediate circulation. You want a law forbidding the FED from hoarding US coins in the future. You want more US coins in even larger denominations, 2,5,10,20,50,100, across the board. You want a whole complete set.

If you can get that done, you won’t have to do anything to “end the FED.” The FED will shrivel up and die all by itself.

[Demeter]

61. The Seven Biggest Economic Lies By Robert Reich

OLDIE BUT GOODIE VIDEO-- PASS IT ON!

http://www.youtube.com/watch?v=mM5Ep9fS7Z0&feature=player_embedded

[Fuddnik]

63. &%$#@*!%^& Hurricanes.

And I ain't talking about losing a bet on the Miami Hurricanes.

We're supposed to leave Sunday for a week of sanity recuperation on the Good Ship Lollipop, aka a Carnival Cruise, and there's a Cat2 (Rina), soon to be Cat 3 sitting between us and all of our destinations. It may or may not have gotten out of the way before we pull up anchor Sunday evening.

I'm about ready to start Dr. Kalashnikov and Molotov's Patented Home Vodka Therapy and Attitude Adjustment. Right now.

[xchrom]

66. Dude - really? & you need a little fun.

Hope rina gets out of your way.

[Hotler]

73. +1........ some fun

http://www.youtube.com/watch?v=BPCjC543llU
Hope you get to have a fun trip. Don't forget the booze

[Demeter]

76. Well, there's auroras to be seen in the north

unless this is a way to flee the country...

I'd still rather go to Iceland. I think a woman stands a much better chance of living a full and natural and free life there.

[RUMMYisFROSTED]

68. Meaningless Jibberish.

:think:

[RUMMYisFROSTED]

69. Go Stockholders!

:woohoo:

[Fuddnik]

72. Wow! Amazon just dropped $42 per share in after hours trading!

Still fluctuating in the -$35 to $40 range.

Guess their earnings disappointed.

[rdking647]

74. huge earnings miss

.14c vs .24 c estimate.
also forecasting a possible loss for next quarter. guidance of -200m to +250m
I just shorted it after hours at 196.60

i figure fair value is in th 100-125 range.