STOCK MARKET WATCH, Monday March 2

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday March 2, 2009

Bush Administration Officials Under Indictment = 0
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 1

AT THE CLOSING BELL ON February 27, 2009

Dow... 7,062.93 -119.15 (-1.69%)
Nasdaq... 1,377.84 -13.63 (-0.98%)
S&P 500... 735.09 -17.74 (-2.36%)
Gold future... 942.50 -0.10 (-0.01%)
30-Year Bond 3.72% +0.08 (+2.08%)
10-Yr Bond... 3.04% +0.06 (+2.12%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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Read more: du

[ozymandius]

1. Market WrapUp

The Most Important Messages From the 4Q GDP Report
BY BRIAN PRETTI

Although quarterly GDP reports are usually not at the top of our list in terms of intensive review given the fact that by the time this news is actually reported it is stale at best, we believe there were some VERY important messages to be garnered from looking at the totality of 4Q 2008 GDP report, above and beyond the more than noticeable headline number decline. The character change witnessed when reviewing the components of the report is some of the most striking we have seen in a very good while. We believe realizing what is happening and “seeing” this character change will be very important to individual US equity sector outcomes ahead as well as macro investment decision making. Although we sure as heck hope not to bore you with economic stat details, which can easily happen in a heartbeat, we saw little to no coverage anywhere in the mainstream financial media of the issues we’re going to cover in this discussion.

We come away with what we believe are two very important bottom line takeaways from the report. First, behavioral change in the US consumer may be approaching the definition of secular if indeed current trends continue throughout 2009 and beyond. We know that sounds melodramatic, but keep an open mind while you look at the historical and current character relationships we’ll cover in this discussion. Secondly, the total character of the GDP report is suggesting to us that current stimulus plans being proffered by the incoming Administration will be inadequate at best if indeed consumer behavior is very importantly shifting, as the numbers in the GDP report show us is occurring. Add in meaningful tax increases and the storm clouds only darken. Let’s get to it.

....

The next MAJOR message from the GDP report, as we see it, concerns the US consumer. It’s probably no big surprise at all that consumption was weak. BUT, the big surprise to us was that consumption was as incredibly weak as witnessed within a period in which consumer prices were actually falling, energy prices being the keynote poster child example of this phenomenon. In many senses this is a very meaningful character change for US consumers relative to what we have experienced in the postwar period. This is what we referred to as possibly being secular in our comments above.

http://www.financialsense.com/Market/wrapup.htm

[ozymandius]

2. Today's Reports

08:30 Personal Income Jan
Briefing.com NA
Consensus -0.2%
Prior -0.2%

08:30 Personal Spending Jan
Briefing.com NA
Consensus 0.4%
Prior -1.0%

08:30 Core PCE Jan
Briefing.com NA
Consensus 0.1%
Prior 0.0%

10:00 Construction Spending Jan
Briefing.com NA
Consensus -1.5%
Prior -1.4%

10:00 ISM Index Feb
Briefing.com NA
Consensus 34.0
Prior 35.6

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

[UpInArms]

52. U.S. Jan. consumer spending rises 0.6% - real disposable incomes rise 1.5%

03. U.S. Jan. savings rate rises to 5.0%, 15-year high
8:30 AM ET, Mar 02, 2009

04. U.S. Jan. incomes rise 0.4%, vs -0.1% expected
8:30 AM ET, Mar 02, 2009

05. U.S. Jan. consumer spending rises 0.6% vs. 0.5% expected
8:30 AM ET, Mar 02, 2009

06. U.S. Jan. real disposable incomes rise 1.5%
8:30 AM ET, Mar 02, 2009

07. U.S. Jan. real consumer spending rises 0.4%
8:30 AM ET, Mar 02, 2009

****************************************

Someone's lying.

Retail sales reports are dismal - consumers are dead - now they say spending and incomes are up????

[Dr.Phool]

54. All those Wall Street bonuses.

[Demeter]

62. Social Security COLAs, More Likely

It was a substantial one this year.

[skoalyman]

64. just wait cnbc will be saying its the bottem

they've been wrong so many times its pitiful:+

[Dr.Phool]

72. They haven't yet?

[skoalyman]

101. they have once last year heck maybe even couple times

:bounce:

[Hugin]

93. Incomes being up is an aberration of averages... A whole hunk of the bottom/middle slice is gone to

unemployment... So, the average income is pulled up by those big bonuses at the top. (Who oddly enough are still employed)

Got to watch those averages... Don't be fooled by the statistics. ;)

[tclambert]

110. I heard that was how test scores went up in Texas when Bush was governor.

They quietly forced the lower performers to drop out. (Those kids weren't left behind, they were forcibly marooned.) The other theory is that Texas dumbed down their state test, since SAT and ACT scores did not rise. (But those tests are taken by the college bound students, a statistical population that would not be affected by low performers dropping out.)

There are many ways to torture statistics. I used to be in computers, and we knew how to make 'em scream!

To fix that average income number, wouldn't you have to add the unemployed back in at 0 income? That would lower the average quite a bit.

[ozymandius]

126. If you factor in the U6 unemployment stats then, yes, that would unskew the results quite nicely.

nt

[UpInArms]

56. Savings rate rises to 14-year high in January

http://www.marketwatch.com/news/story/CORRECT-Savings-rate-rises-14/story.aspx?guid=%7B315493FB%2D70E7%2D495E%2DB8B1%2D81ADAE646F64%7D

WASHINGTON (MarketWatch) - U.S. households socked away most of the extra income they got in January from annual cost-of-living raises, boosting the personal savings rate to a 14-year high, the Commerce Department said Monday.

Disposable real incomes rose in January at the fastest pace since May as annual pay raises and cost-of-living increases took effect, the Commerce Department said. Real disposable incomes (adjusted for inflation and after taxes) increased 1.5%, despite the third straight decline in income from wages and salaries.

Meanwhile, real (inflation-adjusted) consumer spending increased 0.4% in January, the largest increase since November 2007 and only the second increase in the past eight months.

Prices increased 0.2% in January, the first increase since September. Core consumer prices - which strip out food and energy prices to get a better view of underlying inflation - rose 0.1%. Consumer prices are up 0.7% in the past year, while core prices are up 1.6%.

With disposable incomes rising faster than spending, the personal savings rate rose to 5%, the highest since March 1995. At an annual rate, personal savings rose to a record $545.5 billion.

...more...

bullshit

[UpInArms]

85. U.S. Feb. ISM index 35.8%

01. U.S. Feb. ISM index better than 34.0% expected
10:01 AM ET, Mar 02, 2009

03. U.S. Feb. ISM new orders 33.1% vs. 33.2%
10:01 AM ET, Mar 02, 2009

06. U.S. Feb. ISM index 35.8% vs. 35.6% Jan.
10:00 AM ET, Mar 02, 2009

[UpInArms]

133. Jan Construction Spending @ -3.3%

Mar 2	10:00 AM	
Construction Spending	Jan
report		-3.3%
briefing.com	-1.6%
concensus	-1.5%
last		-2.4%
rev'd from	-1.4%

did they hid this report all day? I looked and looked

[ozymandius]

3. Oil falls below $44 on bleak US GDP, AIG news

SINGAPORE – Oil prices fell to below $44 a barrel Monday as hopes for a quick end to the global slump evaporated amid dismal U.S. economic news and the prospect of another massive bailout of ailing insurer American International Group Inc.

Benchmark crude for April delivery fell $1.08 to $43.68 a barrel by midday in Singapore on the New York Mercantile Exchange. The contract fell 46 cents on Friday to settle at $44.76.

In another sign that the U.S. financial crisis continues to sap the government's coffers, AIG will receive up to $30 billion in additional federal assistance, people familiar with the matter told The Associated Press on Sunday. The company previously received about $150 billion in loans from the government, which holds an 80 percent stake.

The Commerce Department said Friday that gross domestic product contracted 6.2 percent in the fourth quarter, the worst showing in a quarter-century.

....

In other Nymex trading, gasoline for April delivery fell 3.15 cents to $1.36 a gallon, while heating oil declined 1.90 cents to $1.25 a gallon. Natural gas for April delivery gained 18.4 cents to $4.26 per 1,000 cubic feet.

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

[FarCenter]

69. Current spot prices for crude oil

$43.67 Brent blend

$49.18 Tapis

$45.15 Alaska North Slope

$43.92 Dubai 1M

$46.35 Louisiana sweet

$41.82 West Texas Intermediate


WTI continues to be lower than the rest of the market due to inventory buildup at Cushing, OK.

[ozymandius]

4. AIG agrees new government bailout, trade suffers

NEW YORK/BEIJING (Reuters) – Insurer AIG is set to take a $30 billion lifeline from the U.S. government and HSBC plans to raise up to $18 billion to counter a crisis that is punishing companies and crippling international trade.

China's manufacturing sector declined further last month, while South Korean imports and exports also slumped as the global turmoil hit export-dependent countries in Asia particularly hard.

Policymakers from Southeast Asia to Europe said they would not allow protectionism to further restrict the global movement of goods, which has slowed to a trickle as banks restrict lending in a desperate effort to conserve cash.

Also desperate for cash, the board of AIG on Sunday approved a third rescue package from the U.S. government, two sources familiar with the matter said.

....

Problems were not limited to financial firms, with Spansion Inc, the world's third-largest maker of flash memory chips, succumbing to falling chip prices and seeking U.S. bankruptcy protection.

There was also more evidence of bleak conditions for many manufacturers in Asia.

http://news.yahoo.com/s/nm/20090302/bs_nm/us_financial

[ozymandius]

5. Sources: AIG to get up to $30B more in Fed aid

CHARLOTTE, N.C. – Struggling insurer American International Group Inc. will receive up to $30 billion in additional federal assistance in the fourth government rescue of the company, people familiar with the matter told The Associated Press on Sunday.

The new infusion is intended to prop up AIG — once the world's largest insurer — as it is expected to announce $60 billion in quarterly losses early Monday, a person said on the condition of anonymity because the discussions are still ongoing.

....

Under the new deal, the U.S. Treasury and the Federal Reserve would provide about $30 billion in fresh capital to AIG from the government's Troubled Assets Relief Program, or TARP. The money would be provided as a standby line of equity that AIG could tap as its losses mount, the person said.

http://news.yahoo.com/s/ap/20090302/ap_on_bi_ge/aig_rescue

[Demeter]

32. How I Wish Team Obama Would Put AIG Out of Our Misery!

The man is going to have to start cutting these Gordian knots if we are to see anything improve in this economy. These aren't political problems, and there aren't any political solutions. You can't "compromise" balance sheets. That's illegal, immoral, and bad business all in one.

[ozymandius]

37. Consider the Citi conundrum -

From Ritholtz

Citigroup: World’s Worst Investment to Get Even Worse

That’s the classic trading rule which the USA is about to violate in an enormous way. According to trading maven Dennis Gartman, one should “never, ever, ever, under any circumstance, add to a losing position.”

....

And yet that is what we are about to do.

To review: Former Treasury Secretary Hank Paulson made a terrible investment on behalf of the taxpayers by purchasing a 7.8% stake in Citigroup (C) for an initial $25 billion dollars. He further put the US on the hook by guaranteeing against 90% of future losses on $301 billion in assets. Subsequently, we (the taxpayers) injected another $20 billion dollars.

At the time, Citigroup had a market cap of about ~$50 billion dollars. Today, its worth ~$13 billion.

So for about 100% of the market value of Citi, plus insurance guarantees worth of as much as 500% of its value (~$275 billion), we got less than 1/10 of a company that in total was worth 1/5 of our investment.

Pretty good deal, eh?

That $45 billion dollar stake now has a market value of just over a billion.

And, its about to get even worse.

Bad business all around. It's time to call it a day on thee black holes.

[Demeter]

42. "This American Life" Claimed that 25% of America's money is deposited with Citi and BoA

and 70% is deposited with the Top Ten....

[DemReadingDU]

57. Downthread, I posted a link to the episode

Check post # 46.

[MilesColtrane]

94. I'd heard that Citi holds about 10% of total U.S. deposits.

If that's less than $45 billion, why haven't they just allowed it to tank and let that bailout cash be funneled back to depositors through the FDIC?

[truedelphi]

150. As long as Rubin is inside Obama's inner circle, Citi will get gravy

From another blog or poster

"Ever since his acclaimed service as Treasury secretary in the Clinton administration, Rubin has labored as a senior adviser and director at Citigroup, now being bailed out by taxpayers to the potential tune of some $300 billion. Somehow the all-seeing Rubin didn’t notice the toxic mortgage-derivatives on Citi’s books until it was too late. "

[truedelphi]

149. I hear you, and I agree.

[ozymandius]

6. Here is a good article detailing the scam AIG ran for many years.

Propping Up a House of Cards

....

Donn Vickrey, who runs the independent research firm Gradient Analytics, predicts that A.I.G. is going to cost taxpayers at least $100 billion more before it finally stabilizes, by which time the company will almost surely have been broken into pieces, with the government owning large chunks of it. A quarter of a trillion dollars, if it comes to that, is an astounding amount of money to hand over to one company to prevent it from going bust. Yet the government feels it has no choice: because of A.I.G.’s dubious business practices during the housing bubble it pretty much has the world’s financial system by the throat.

....

“They were the worst of them all,” said Frank Partnoy, a law professor at the University of San Diego and a derivatives expert. Mr. Vickrey of Gradient Analytics said, “It was extreme hubris, fueled by greed.” Other firms used many of the same shady techniques as A.I.G., but none did them on such a broad scale and with such utter recklessness. And yet — and this is the part that should make your blood boil — the company is being kept alive precisely because it behaved so badly.

•

When you start asking around about how A.I.G. made money during the housing bubble, you hear the same two phrases again and again: “regulatory arbitrage” and “ratings arbitrage.” The word “arbitrage” usually means taking advantage of a price differential between two securities — a bond and stock of the same company, for instance — that are related in some way. When the word is used to describe A.I.G.’s actions, however, it means something entirely different. It means taking advantage of a loophole in the rules. A less polite but perhaps more accurate term would be “scam.”

....

That foolhardy belief, in turn, led A.I.G. to commit several other stupid mistakes. When a company insures against, say, floods or earthquakes, it has to put money in reserve in case a flood happens. That’s why, as a rule, insurance companies are usually overcapitalized, with low debt ratios. But because credit-default swaps were not regulated, and were not even categorized as a traditional insurance product, A.I.G. didn’t have to put anything aside for losses. And it didn’t. Its leverage was more akin to an investment bank than an insurance company. So when housing prices started falling, and losses started piling up, it had no way to pay them off. Not understanding the real risk, the company grievously mispriced it.

---

This article clearly explains the intricacies of AIG's business model. Our first order of business should be preventing AIG from taking down the whole banking system. Then we need to carve up this behemoth so that failure of one single entity will not wreak havoc globally.

[tclambert]

38. Let's also break through the "corporate personhood" and name names of the people

who actually made the evil decisions. If crimes were committed, identify by name the persons who committed them. Everything attributed to the corporation were in reality actions of individuals. Martin Sullivan was CEO of AIG from 2005 to June, 2008. He took over from long-time (37 year) CEO Maurice "Hank" Greenberg. Greengerg had been "forced out amid accusations from then-New York State Attorney General Eliot Spitzer of fraudulent accounting." http://www.msnbc.msn.com/id/25177747/ Sullivan was fired due to AIG losing billions due to loses on its CDS portfolio. Sullivan made $13.9 million in that last year, in which AIG lost $9.1 billion in just the first quarter.

Robert Willumstad replaced Sullivan. He came over from Citigroup, where he was COO in 2005. He was only CEO until September, ousted apparently due to the bailout. Willumstad was eligible for a $22 million severance package, but declined to take it. "I prefer not to receive severance payments while shareholders and employees have lost considerable value in their AIG shares," he wrote in an e-mail http://abcnews.go.com/Business/MarketTalk/story?id=5861458&page=1 How about that? A CEO with a conscience? I thought they had to have those surgically removed.

[FarCenter]

71. The head of derivatives at AIG was Joseph Cassano

He headed up the AIG Financial Products unit in London. This was the rogue operation primarily responsible for killing AIG.

Just search on his name and AIG.

[tclambert]

113. Thank you. That's what I'm talkin' about. Name 'em to shame 'em.

'Cause it doesn't seem like anybody wants to prosecute 'em. (Well, I bet I can name a few screen names here who do.)

[loudsue]

98. That is the key to whether or not this country's citizens will continue to support capitalism or not

If corporations are allowed to continue to swallow the U.S. whole from behind closed doors, and nobody gets sent to jail, there are going to be some congresscritter's heads rolling in the town square....French revolution style.

[antigop]

77. The article also mentions AIG's SECURITIES LENDING practices

There’s more, believe it or not. A.I.G. sold something called 2a-7 puts, which allowed money market funds to invest in risky bonds even though they are supposed to be holding only the safest commercial paper. How could they do this? A.I.G. agreed to buy back the bonds if they went bad. (Incredibly, the Securities and Exchange Commission went along with this.) A.I.G. had a securities lending program, in which it would lend securities to investors, like short-sellers, in return for cash collateral. What did it do with the money it received? Incredibly, it bought mortgage-backed securities. When the firms wanted their collateral back, it had sunk in value, thanks to A.I.G.’s foolish investment strategy. The practice has cost A.I.G. — oops, I mean American taxpayers — billions.

I think this explains why the guarantees for money market funds were put in place. How much of this toxic crap is in MM funds? How much of this toxic crap is in 401(k) money market funds?

[ozymandius]

7. AIG failure would still be disastrous for global markets

NEW YORK (Reuters) - A revised bailout of American International Group may be just another "band-aid" solution, but more than five months after it was first rescued by the government the option of letting the insurer fail would still be considered too big a shock to already fragile global markets.

....

While putting more taxpayer money at risk is unlikely to be palatable in the current economic environment, analysts said the U.S. government had little choice. Without government intervention, AIG's expected losses would prompt credit ratings downgrades -- triggering even more debilitating losses for the insurer, and its trading partners.

....

AIG, through a financial products unit, sold more than $450 billion of protection on securities to U.S. and European banks. With government support, some of those derivatives have been unwound, but the company still has about $300 billion of this exposure, according to Credit Sights.

Haines said that European banks in particular, counterparties on many of AIG's outstanding derivative contracts, "would be hammered if the U.S. walked away."

http://uk.reuters.com/article/UKNews1/idUKTRE5211EW20090302

---

So why aren't European banks supporting AIG with cash infusions?

[radfringe]

13. Legacy Consolidated Plans, Inc. - MANILA, Philippines

We are not the only country with financial scandals... I've been following this story on the peripheral... seems to be heating up, more smoke and a wee bit of flame

Trying to track down company officers, board of directors etc to see if there's any connection to US companies/people (other than "innocent" investors/victims) - but haven't had much luck - however, my gut tells me there are more dots to connect.

Criminal raps filed vs officers of 2 Legacy affiliates
02/26/2009 | 07:14 PM
http://www.gmanews.tv/story/150553/Criminal-raps-filed-vs-officers-of-2-Legacy-affiliates

MANILA, Philippines - The Securities and Exchange Commission (SEC) has filed criminal complaints against officers of two companies affiliated with the collapsed Legacy Consolidated Plans, Inc.

In two separate complaints filed before the Justice Department, SEC accused Legacy of violating the provision of the Securities Regulation Code (SRC) that prohibits the sale of securities without prior approval of the Commission.

SEC-Compliance and Enforcement Department said officers of Legacy Card, Inc. (formerly known as Legacy Group, Inc.) and One Realty Corporation violated Sections 8 and 26 of the SRC as well as Section 45 of the Corporation Code.

Named respondents in the complaints were Celso Delos Angeles Jr., former chairman and chief executive officer and director of Legacy; Martin Nicolo Delos Angeles, Victorino Delos Angeles, Purita Delos Angeles, board of directors of Legacy Card; Norman Tiongson, corporate secretary; Corilina Hinola, Christine Antenor Cruz, SVP-finance officers; Rita Maniacup, AVP-finance officer; Basilio Ponciano Carpio, senior manager; Roy Hilario, director and authorized representative; and several John and Jane Does.

On the other hand, aside from Celso Delos Angeles, other officers of One Realty Corporation charged were Ma. Concepcion Delos Angeles, Purita Delos Angeles, Christine Limpin, Madeline Cobarrubias, all board of directors.


SEC sues another Legacy firm before DoJ
http://www.bworldonline.com/BW030209/content.php?id=044

more stories: http://news.google.com/news?pz=1&ned=us&hl=en&q=Legacy+Consolidated+Plans

legacy watch group -- http://alfredo.palconit.com/legacy-group

Republic of the Philippines SEC: http://www.sec.gov.ph/index.htm?pre-need04

[Demeter]

63. In the Words of Darth Cheney: So?

:nopity:

[ozymandius]

20. AIG Restructuring Plan

Here's a list compiled by Barry Ritholtz.

• Preferred Equity: Treasury exchanges its existing $40 billion cumulative perpetual preferred shares for new preferred shares with revised terms that more closely resemble common equity. The goal is to “improve the quality of AIG’s equity and its financial leverage.”

• Dividends are non-cumulative; AIG’s can redeem the preferred stock only with the “proceeds from the issuance of equity capital.”

• Equity Capital Commitment: Treasury is creating a new equity capital facility, allowing AIG to draw up to $30 billion as needed in exchange for non-cumulative preferred stock. The goal is strengthening AIG’s capital levels and improve its leverage.

• Federal Reserve Revolving Credit Facility: The Federal Reserve will take several (undefined) actions relating to the $60 billion AIG Revolving Credit Facility (established in September 2008);

• Repayment by Preferred Stock Interests: Two special purpose vehicles are created to hold all of the outstanding common stock of American Life Insurance Company (ALICO) and American International Assurance Company Ltd. (AIA). AIG retains control of ALICO and AIA.

• The New York Fed’s preferred stock valuation — up to approximately $26 billion — will be a percentage of the fair market value of ALICO and AIA based on valuations acceptable to the New York Fed. The Revolving Credit Facility will be reduced in exchange for preferred interests in two life insurance holding company subsidiaries of AIG.

• Securitization of Life Insurance Cash Flows: The New York Fed is authorized to make new loans under section 13(3) of the Federal Reserve Act of up to an aggregate amount of approximately $8.5 billion to special purpose vehicles (SPVs) established by domestic life insurance subsidiaries of AIG. The SPVs would repay the loans from the net cash flows they receive.

• Restructuring of Other Terms: The total amount available under the Facility will be reduced from $60 billion to no less than $25 billion. The interest rate currently three-month LIBOR plus 300 basis points, will be modified by removing the existing floor (3.5 percent) on the LIBOR rate.

• Issuance of Preferred Stock: AIG has agreed to issue on March 4, 2009, shares of convertible preferred stock representing an approximately 77.9% equity interest in AIG to an independent trust for the sole benefit of the United States Treasury.

[UpInArms]

40. AIG posts $61.7B 4Q loss, bailout is restructured

http://news.yahoo.com/s/ap/20090302/ap_on_bi_ge/earns_aig

CHARLOTTE, N.C. – American International Group Inc., once the world's largest insurer, said Monday it lost $61.7 billion in the fourth quarter, the biggest quarterly loss in U.S. corporate history, amid continued financial market turmoil.

The results come as the U.S. government also Monday announced a restructuring of a bailout plan for the troubled insurer, extending $30 billion in additional aid to the company.

New York-based AIG said it lost $22.95 per share in the last three months of 2008. It lost $5.3 billion, or $2.08 per share, in the quarter a year ago.

The latest results include $7.2 billion in unrealized losses and credit valuation adjustments at AIG Financial Products, the source of credit-default swaps, and pretax losses of $21.6 billion tied to the declining value of AIG's investment portfolio.

AIG's general insurance business swung to a loss on $2.8 billion in net realized capital losses. General insurance net premiums dropped 16.3 percent to $9.2 billion, and net premiums earned fell 5.9 percent to nearly $11 billion.

Adjusted to exclude certain items, operating losses totaled $37.9 billion, or $14.17 per share, versus a loss of $3.2 billion, or $1.25 per share, last year.

The results drastically fell short of estimates. Analysts surveyed by Thomson Reuters, on average, forecast a loss estimate of 37 cents per share on revenue of $24.82 billion. Analysts have been dropping coverage of AIG in recent weeks due to the uncertainty of AIG's future.

...more...

edited because the numbers was so stunning that I forgot to include the link

[Demeter]

111. Lost $23 a share, hm?

And how much is the golden parachute?

[Roland99]

8. Futures: DJIA down to near 6900

[ozymandius]

10. Soon we will retrace values as they stood before the Gramm, Leach, Bliley Act.

That was a piece-of-shit legislation that never should have been enacted in the first place. I will be curious to see what happens after values correct themselves after exploiting ten years of bad Republican legislation.

[ozymandius]

14. U.S. Stock-Index Futures Decline; Berkshire, Caterpillar Drop

March 2 (Bloomberg) -- U.S. stock futures fell, indicating the Standard & Poor’s 500 Index may extend a 12-year low, after Warren Buffett said the economy will be “in shambles” this year and his Berkshire Hathaway Inc. reported lower profit.

Berkshire Hathaway lost 4.6 percent in Germany as the company posted its fifth straight earnings decline. Caterpillar Inc., the world’s largest maker of construction equipment, and General Motors Corp. retreated more than 1 percent before a report that may show manufacturing contracted. American International Group Inc. gained 14 percent after the government agreed to provide as much as $30 billion in new capital in a revised bailout.

Futures on the S&P 500 expiring this month slipped 2.1 percent to 718.7 as of 11:05 a.m. in London. Dow Jones Industrial Average futures dropped 1.8 percent to 6,926 and Nasdaq 100 Index futures decreased 1.8 percent to 1,096.50.

....

Berkshire Hathaway Class B shares lost 4.6 percent to $2,445.50. Fourth-quarter net income fell 96 percent to $117 million, the firm said Feb. 28. Book value per share, a measure of assets minus liabilities, slipped 9.6 percent for all of 2008, the worst performance under Buffett’s watch, on the declining value of derivatives and the stock portfolio.

Buffett said the economy will be “in shambles” this year, and perhaps longer, before recovering from the reckless lending that caused the worst “freefall” he ever saw in the financial system. The investor also said he’ll spend the recession shopping for new investments for Omaha, Nebraska-based Berkshire.

http://www.bloomberg.com/apps/news?pid=20601103&sid=ahB29nwoMl7Y&refer=us

[Dr.Phool]

19. Dr Doom might just be an optimist.

Last year when everyone calling a bottom, Roubini was predicting a Dow of around 7k this year. Here we are, and I don't see the end in sight.

[ozymandius]

21. Reality meets Shock-n-Awe psychology

I agree with that assessment. Reality realized by overly optimistic P&E ratios combined with the psychological impact of years of illusory profits will trash values for the year. I remember reading a critique of Dr. Doom's forecast calling it the same: overly optimistic. I forget who write this (another gloomy economist anyway) and I'm too lazy to look it up right now.

The end result of the tumult, as forecast by the unnamed Dr. Gloom, will see the Dow in the 4000 to 5000 range. Of course, that forecast and $2 will buy you a cup of coffee at Starbucks - if your local shop is still in operation.

[ozymandius]

22. Here's a (wonkish) post outlining this idea.

How low can stock prices go, and how worried should you be?

Since 1946, in an average year the stocks in the S&P500 offered a 3.5% dividend and went up in price 2% faster than inflation, for a combined real yield of 5.5%. At that rate, if you reinvested your dividends, you might expect to double the real value of your portfolio in 13 years.

The recent volatility in stock prices has led me to think some more about an old paper by Robert Shiller titled Do stock prices move too much to be justified by subsequent changes in dividends? In that paper, Shiller introduced the concept of a "perfect foresight" stock price, denoted P*(t), which is defined as the present value of the actual subsequent dividends over future periods, D(t+j):

P*(t) = D(t) + (1+r)-1 D(t+1) + (1+r)-2 D(t+2) + (1+r)-3 D(t+3) + ...

Here r denotes the rate of return, which from the numbers above we might take to be r = 0.055 at an annual rate.

....

Now let's ask how much the stock price should change if we switch to an alternative, very different scenario for what's about to happen to dividends. As an example, I decided to ask what would be the consequences if we're just about to repeat what happened during the Great Depression. For this scenario, I simply took the historical trajectory of real dividends between 1931:M1 and 1936:M12 and pasted it onto the series beginning in 2009:M1, and supposed that afterward (from 2015 onward) real dividends go back to growing at 2% annually, with the Great Depression II keeping us stuck permanently with a level of dividends well below that implied by scenario 1. Thus scenario 2 looks like this.

-see chart-

The green line in Figure 4 below plots the behavior of P*(t) under this alternative scenario 2. If we're about the enter Great Depression II, stocks are still overvalued, and the S&P500 would have to fall another 19% to get down to 608, the value at which investors could again anticipate a 5.5% real rate of return given the horrible news ahead on dividends. This alternative path for P*(t) doesn't get back to the current value for the actual S&P (which closed at 735 on Friday) until 2016.

-chart-

But that doesn't mean that if you buy stocks today you'd have to wait 7 years before you're even, because in the mean time you'll still collect dividends from your stocks. The typical stock will pay a significantly lower dividend in 2009 and 2010 than it did in 2008, if we're about to repeat the depression, but you'll still get something, and under the depression scenario, you get more shares per dividend as you reinvest the dividends at cheaper stock prices....

Of course, under this scenario you would do better waiting for the market to recognize the depression and wait to buy at 608 rather than now at 735. Moreover, given the historical tendency for over exuberance in upswings and excessive pessimism in downturns, you might expect the actual price to fall well below 600 in another depression, at which point there will be returns to be had well in excess of 5.5% if you time your moves just so.

http://www.econbrowser.com/archives/2009/03/stock_prices_an.html

[Demeter]

24. Zero is the Bottom Number

Unless they develop the trick of PAYING you to take stock in a company.

[ozymandius]

28. Funny, isn't it?

One day prior to every bailout effort performed on AIG - the company was completely under water... worthless.

[Dr.Phool]

29. That's not really unheard of.

Some casino's give you "free" money to go gambling.

[tclambert]

41. The value of financial companies should all be expressed as a multiple of the squareroot of -1

Imaginary numbers. If you laughed at this joke, you just might be a math nerd.

[Demeter]

43. Guilty As Charged!

[Tansy_Gold]

58. I didn't laugh, but I nodded my head sagely.

Does that count?




Tansy Gold, very glad to be back in warm, sunny Arizona

[Demeter]

61. My, that was a short trip

Did you even get out of your car?

[Tansy_Gold]

67. Yes, occasionally, and when I did I froze.

I flew in Friday evening, flew home Sunday afternoon. I don't like cold at all, plus I have to get home to, uh, work, y'know?

[Tansy_Gold]

68. Dupe n/t

!

[AnneD]

78. Guilty.....

and I am this close to using it as a sig line:spray:
I like the Sparticus dig though.

[antigop]

80. Guilty. n/t

[Dr.Phool]

83. Head held low, in shame.

Guilty, yer honor.

[Demeter]

142. So, When Somebody Asks Me What I Did Today, I Can Say I Hung Out With My Imaginary Friends!

and that's the truth!

[natrat]

36. i was going to bet the farm at 650,maybe not ,,,doh

[ozymandius]

9. HSBC to shutter U.S. operations, raise $17.7 billion (6100 jobs gone)

LONDON (MarketWatch) -- Banking giant HSBC Holdings said Monday that it will shutter much of its U.S. consumer lending business and raise 12.5 billion pounds ($17.7 billion) from shareholders after reporting a 70% drop in profit for 2008.

The bank said it will shut down the branch network of its HSBC Finance arm in the U.S. leaving only the credit card business to continue operating. The closures will result in 6,100 job losses.

Net profit for 2008 dropped 70% to $5.73 billion from $19.13 billion.

http://www.marketwatch.com/news/story/hsbc-shutter-us-branches-raise/story.aspx?guid=EDB1D0FE-F412-41F7-B9C9-1D628DDBABD6&dist=SecMostMailed

---

HSBC was the largest corporate contributor to GWB's 2004 campaign.

[ozymandius]

12. Trading in HSBC shares suspended in Hong Kong

HONG KONG (MarketWatch) -- Trading in shares of HSBC Holdings was suspended for Monday's session in Hong Kong, pending what the bank called "the announcement of a corporate action," as the company was expected to reveal a pullback from its U.S. consumer lending business.

....

Shares of HSBC's Hong Kong-based subsidiary, Hang Seng Bank dropped 4% ahead of its own results for 2008. Daiwa Research expects Hang Seng's 2008 profit to drop to HK$14.06 billion from $18.24 billion in 2007.

http://www.marketwatch.com/news/story/trading-hsbc-shares-suspended-financial/story.aspx?guid={D04F335E-6AAE-4E1A-856B-82A9C7C7B6FB}&dist=TNMostRead

[Demeter]

25. Schadenfreude for Breakfast!

Mmm-mm!

[ozymandius]

11. Financials slammed in Asia; currencies slide

HONG KONG (MarketWatch) -- Asian shares tumbled Monday, with financial stocks slammed by worries about the health of the global financial sector and about banks' recapitalization plans.

The benchmark stock indexes in Japan, South Korea, Singapore, Hong Kong and Thailand each lost 3% or more during the session. Aversion to risk also shook up the currency market: Most Asian currencies tumbled as investors continued to seek a safe haven in the U.S. dollar as demand for regional exports has plunged.

....

Japan's Nikkei 225 Average ended down 3.8% at 7,280.15, with Kenichi Hiran, Tachibana Securities' operating officer, saying the Nikkei 225 could test last Tuesday's intraday low of 7155.16 in the near term.

....

Seoul's Kospi Index skidded 4.2%, Hong Kong's Hang Seng Index surrendered 3.9% and Australia's S&P/ASX fell 2.8%.

Singapore's Straits Times dropped 3.2% and India's Sensex gave up 2.5% in afternoon trading, while Thailand's SET was 3.4% lower.

http://www.marketwatch.com/news/story/financials-slammed-asia-currencies-slide/story.aspx?guid={252BC866-15C5-451C-830D-7BDF4634683C}&dist=msr_1

[ozymandius]

18. Asian Exports Tumble, Deepening Slowdown Amid Global Recession

March 2 (Bloomberg) -- India's overseas sales plunged the most in a decade in January and Indonesia's shipments suffered their biggest decline since 1986 as the global recession pummeled Asian exports.

Merchandise shipments from India dropped 16 percent in January from a year earlier, the fourth straight monthly fall, and Indonesia's exports tumbled 35.5 percent. South Korea's overseas sales declined 17.1 percent in February following January's record 33.8 percent slump.

....

Recessions in the U.S. and Europe, the region's biggest market, are crimping demand for made-in-Asia products. Last week, Japan reported exports plunged a record 45.7 percent in January and earlier China said its shipments tumbled 17.5 percent in the same month, the biggest decline in almost 13 years.

International trade will shrink in 2009 for the first time in more than 25 years as economic expansion slows and commodity prices slide, the World Bank said in December. World trade volumes will probably contract this year by 2.1 percent, hampered by exchange rate volatility and flagging import demand.

Asian governments have responded to the global slowdown by unveiling fiscal stimulus packages worth almost $700 billion to kick-start local consumer and business spending.

http://www.bloomberg.com/apps/news?pid=20601080&sid=auUcebiJTelA&refer=asia

[ozymandius]

15. Banks Underwriting Own Shares Accounted for 12 of Top 20 Sales

March 2 (Bloomberg) -- Bankers underwriting share sales in 2008 often found themselves touting a familiar stock -- their own. Look for a repeat in 2009.

Urgently needing to raise capital after taking more than $1 trillion in writedowns and provisions, financial firms dominated equity sales in a down year. Fees slumped 57 percent to $11 billion from $25.7 billion in 2007, according to data compiled by Bloomberg. Bankers expect this year to be little improved, even as financial companies continue to rebuild their balance sheets.

....

Financial firms made up 12 of the 20 biggest equity deals, with many serving as underwriters for their own offerings. Wells Fargo & Co., Bank of America and JPMorgan all waded into the secondary market last year, with Bank of America participating in its own deal and Wells Fargo’s Wachovia Corp. unit handling part of its offering.

http://www.bloomberg.com/apps/news?pid=20601109&sid=awJeX8Yo0NZU&refer=exclusive

[Festivito]

16. Debt: 02/26/2009 10,881,159,722,022.36 (UP 43,660,490,895.25) (Up 48.)

(Borrowing in spurts. SS/FICA amounts fluctuate normally.)

= Held by the Public + Intragovernmental(FICA)
= 6,578,855,990,306.71 + 4,302,303,731,715.65
UP 48,048,940,708.92 + DOWN 4,388,449,813.67

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 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.81, ABOUT TEN BUCKS for a 1B$ 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 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,875,286 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,573.84.
A family of three owes $106,721.53. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 11,317,478,750.43.
The average for the last 30 days would be 8,676,733,708.67.
The average for the last 31 days would be 8,396,839,072.90.
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$/day.
There were 26 reports in 37 days of Obama's part of FY2009 averaging 0.45B$ per report, 0.37B$/day so far.
There were 101 reports in 149 days of FY2009 averaging 8.48B$ per report, 5.75B$/day.

PROJECTION:
There are 1,424 days remaining in this Obama 1st term.
By that time the debt could be between 12.8 and 22.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/26/2009 10,881,159,722,022.36 BHO (UP 254,282,673,109.28 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 856,434,825,109.90 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/05/2009 +046,668,131,793.54 ------------**********
02/06/2009 +000,340,839,567.98 ------------********
02/09/2009 -000,572,980,736.98 --- Mon
02/10/2009 +000,388,825,726.33 ------------********
02/11/2009 -000,221,760,520.78 ---
02/12/2009 +043,810,585,841.25 ------------**********
02/13/2009 -000,268,428,512.00 ---
02/17/2009 +028,425,868,676.29 ------------********** Tue
02/18/2009 +000,178,127,394.43 ------------********
02/19/2009 +012,906,622,783.22 ------------**********
02/20/2009 +035,338,367,983.16 ------------**********
02/23/2009 -000,426,861,213.78 --- Mon
02/24/2009 +000,473,801,933.93 ------------********
02/25/2009 +000,413,635,509.27 ------------********
02/26/2009 +048,048,940,708.92 ------------**********

215,503,716,934.78 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,216,527,918,763.29 in last 161 days.
That's 1,217B$ in 161 days.
More than any year ever, including last year, and it's 120% of that highest year ever only in 161 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 161 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(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=3758907&mesg_id=3758927

[Festivito]

157. Debt: 02/27/2009 10,877,144,501,237.52 (DOWN 4,015,220,784.84) (Small.)

(Small change in public's debt. SS/FICA moves down, payday.)

= Held by the Public + Intragovernmental(FICA)
= 6,579,162,708,614.60 + 4,297,981,792,622.92
UP 306,718,307.89 + DOWN 4,321,939,092.73

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 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.81, ABOUT TEN BUCKS for a 1B$ 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 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,881,458 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,560..
A family of three owes $106,680.. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 10,915,907,255.09.
The average for the last 30 days would be 8,368,862,228.90.
The average for the last 31 days would be 8,098,898,931.19.
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$/day.
There were 27 reports in 38 days of Obama's part of FY2009 averaging 0.33B$ per report, 0.30B$/day so far.
There were 102 reports in 150 days of FY2009 averaging 8.36B$ per report, 5.68B$/day.

PROJECTION:
There are 1,423 days remaining in this Obama 1st term.
By that time the debt could be between 12.8 and 22.4T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
02/27/2009 10,877,144,501,237.52 BHO (UP 250,267,452,324.44 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 852,419,604,325.10 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/06/2009 +000,340,839,567.98 ------------********
02/09/2009 -000,572,980,736.98 --- Mon
02/10/2009 +000,388,825,726.33 ------------********
02/11/2009 -000,221,760,520.78 ---
02/12/2009 +043,810,585,841.25 ------------**********
02/13/2009 -000,268,428,512.00 ---
02/17/2009 +028,425,868,676.29 ------------********** Tue
02/18/2009 +000,178,127,394.43 ------------********
02/19/2009 +012,906,622,783.22 ------------**********
02/20/2009 +035,338,367,983.16 ------------**********
02/23/2009 -000,426,861,213.78 --- Mon
02/24/2009 +000,473,801,933.93 ------------********
02/25/2009 +000,413,635,509.27 ------------********
02/26/2009 +048,048,940,708.92 ------------**********
02/27/2009 +000,306,718,307.89 ------------********

169,142,303,449.13 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,212,512,697,978.45 in last 162 days.
That's 1,213B$ in 162 days.
More than any year ever, including last year, and it's 119% of that highest year ever only in 162 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 162 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(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=3763097&mesg_id=3763131

[ozymandius]

17. Profit fears hit UBS

ZURICH (Reuters) - Shares in Swiss bank UBS AG (UBSN.VX) (UBS.N) fell sharply on Monday after its new chief executive was quoted as saying it could take two to three years to bring it back to making a sustainable profit.

....

"Until now management had repeatedly assured that in 2009 the company should be back in black numbers," Wegelin analysts said in a note. "It seems Mr Gruebel is taking a somewhat more realistic position."

....

UBS is struggling to rebuild its once powerful brand after massive investments into risky U.S. assets forced it to make more writedowns than any other European bank and to accept government backing.

http://www.reuters.com/article/newsOne/idUSTRE51Q4H820090302

[ozymandius]

23. Cliff Diving in Futures

S&P 500 -18.90 715.30 3/2 6:57am

NASDAQ -32.25 1084.75 3/2 6:47am

Dow Jones -170.00 6882.00 3/2 6:51am

[Dr.Phool]

26. Are you getting a "snow day" today Oz?

When I got to the airport in Wilmington yesterday morning, I saw US Air and Delta were canceling everything into and out of Atlanta. By the time I left, at 11:00am, they were starting on Charlotte and points north.

[ozymandius]

30. I am.

There are almost 400 metro area closings (schools, day care and gooberment offices) due to icy conditions. The snow fell more heavily yesterday than I had seen since the 1993 blizzard. The temperature briefly rose into the upper 30's late yesterday afternoon but then took a nosedive around dusk.

I'll be around a bit more today than usual. Sorry about that. :evilgrin:

[Demeter]

27. Perfect Cartoon, Ozy!

It deserves a Pulitzer for its completeness, truthfulness, and real humor. It's not even black humor, which was all we had to go on for so long.

It's 5 miserable degrees out there. I should be grateful, since the forecast was for 0F, but I'm not.

Took a nice cruise this weekend, though. Saw lots of icebergs. Brought back some souvenirs, too!

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x428929

[ozymandius]

31. Thank you!

Tom Toles just wants us to be happy, unlike the Congressional Republican trolls.

The WE had more than just mere icebergs. It had exploding icebergs. I tend to go light on economic news over the weekend. However of late, I've been on the lookout for news about Citi and BoA nationalization. I read and read and read. The message that keeps coming in loud and clear is the Monty Python chorus, "Get on with it!"

[Demeter]

34. Exploding Icebergs?

Well maybe, but at a glacial pace.

[ozymandius]

47. I mixed metaphor. Sorry.

In one picture, there was the unsinkable Titanic. Like our once-unsinkable financial system, as The Messtro said year ago. However, it now appears that our financial ship has struck an iceberg made from C-4.

[Demeter]

48. I'm Just Unhappy With the Length of Time for Some Bankers to Face Reality

not to mention other financial "experts" and political operatives...

[ozymandius]

33. Cracks Open in Commercial Real Estate

from Mish:

Commercial Real Estate Mutiny In Downtown LA

Numerous merchants in LA's Grand Central Market did not pay their February rents for more than two weeks. The merchants were protesting high rents and advertising fees as described by Los Angeles DownTown in Mutiny at the Market.

A tenants' mutiny at Grand Central Market was resolved last week after a group of merchants who had withheld their February rents came to an agreement with the landlord and paid up.

...

The situation had been bubbling for months, and began to come to a head in late January. That is when Ralph Leech, an attorney representing some of the Grand Central Market tenants, sent a letter to the Yellin Company citing the deteriorating economy and asking for a 30% reduction in rents and a discontinuation of the monthly publicity charge that pays for advertising the market.

The crisis quickly escalated, as most of the tenants withheld the rents that were due Feb. 1. That led the Yellin Company to send notices to those who had not paid, threatening eviction.

...

"The businesses are very slow. People are using lines of credit to pay rent. It's a bad situation, but hopefully we'll survive. We just need help," said Robina Sookasya, owner of Kabab and More, a Mediterranean food vendor.

The mass mutiny at Grand Central Market provides a strong hint at what's coming.

With rising unemployment and falling discretionary spending, the economy is not coming back anytime soon. Thus, tapping credit lines to pay rent is a tactic guaranteed to fail. Yet, the economic situation is such that using lines to pay bills will continue until every cent of those credit lines are used up. After all, what vendor will voluntarily go out of business now?

more...

[Demeter]

35. I've Been Waiting for this for Years Now

Watching the malls' storefronts turn over every year or so, knowing it was the exorbitant rents forcing retailers out....

[UpInArms]

39. dollar watch

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

Last trade 88.800 Change +0.634 (+0.82%)

Why Is This Still Legal?

http://www.bktraderfx.com/site/fx-weekly-reports/fx-weekly-0228-0509-how-to-find-tradable-ideas-in-fx

Currency markets continue to churn with everyone clueless as to how our economic future will turn out. As unemployment lines grow ever longer and the sense of dread is spreading from Wall Street to Main Street I would like to ask just one question. Why are over the counter markets still legal?

Financial markets, like healthcare cannot exist without supervision. Finance like medicine is an inelastic good. We have no choice in the matter. Short of keeping our cash in a mattress, none of us can exist without financial services just as none of us can survive without medical care. In no advanced industrialized nation would we ever consider surrendering our body to the care and surgery of an unlicensed, unregulated quack, but we don’t even think twice about doing so with our investment capital.

Perhaps the fear of rigid, bureaucratic control keeps us from considering the regulatory option but financial markets do not have to devolve into a some nightmare version of the DMV or the Post Office in order to be safe yet flexible. They can still be highly competitive and productive as long as they are simply exchange based.

A centralized exchange eliminates a series of calamitous costs of over the counter markets –
secrecy, counter party risk and outright fraud. On a centralized exchange AIG, Lehman, Bear Sterns would have never been able to cheat they way they did, by putting on trades for which they lacked proper capital requirements.

In conducting the autopsy of those firms, an alphabet soup of derivative products from MBSs, to CDOs to CDSs were singled out as the culprits for the collapse. But those securities are actually useful gambling tools designed to trade and hedge risk. At their core they are no different than other speculative products such as options or futures contracts. The problem is that all of them were traded over the counter, away from the oversight of a centralized exchange which would have maintained strict margin enforcement and long ago would have forced AIG, Bear and Lehman to liquidate their positions saving the US taxpayers a trillion of dollars of unnecessary debt as we try to clean up the mess.

Everyone has a right to gamble, but with that freedom comes responsibility. In order for speculative markets to work effectively, all the other players must know that you are good for the money. A centralized exchange helps enforce that key function. An over the counter market does not, and the end result is a complete breakdown of trust and cessation of all economic activity such as we saw occur in October.

So why do these over the counter markets still exist? Why do all of the major banks still control this multi-trillion dollar game acting as primary dealers of these securities while continuing to put our whole civilization at risk? To paraphrase Rick Santelli – President Obama are you listening?

...more...

HSBC Troubles Open Fresh Round of Greenback Safety Buying

http://www.dailyfx.com/story/bio2/~HSBC_Troubles_Open_Fresh_Round_1235995030751.html

Familiar themes and correlations dominate into the early week and early month, with more problems arising out of the financial sector, this time at HSBC, after the bank reported pre-tax profit slumped by 18%. The bank will now need to shore up its balance sheet which has sent the markets back into a panic and opened the latest bout of carry liquidation, broad based USD buying and fall in global equity prices. News that the US Treasury has announced a new $30B equity capital facility for AIG has proved to have little positive impact on sentiment. On the commodity front, gold is seen higher by nearly 1%, while oil tracks lower with equities. Key data out from the Eurozone overnight saw a higher than expected flash CPI estimate and lower manufacturing PMI. The higher inflation indicator was however not as well received, after inflation readings out from Germany in the previous week had suggested that we would indeed see a higher print today. In the UK, mortgage approvals and manufacturing PMI were softer while Hometrack housing data was also weak. Perhaps weighing more significantly on Sterling was the news that the UK government “business lending guarantee scheme” was running behind schedule, to raise doubt over the government’s ability to effectively deal with the severe recession. In Switzerland, data continued to disappoint with PMI coming in weaker than expected and hitting an all-time low. Officials on the wires included EU Almunia who expressed concerns over the latest developments in the EMU, and stressed that protectionism must be fought, while EC President Barroso was out earlier saying that the crisis was “the biggest in living memory.” Looking ahead, the North American calendar is stacked, but key event risk comes in the form of Canada GDP (-3.5% expected) due at 13:30GMT followed by US ISM manufacturing data (33.9 expected) at 15:00GMT. The Loonie has come under pressure of late, following a slew of awful data including the first deficit since 1999. Dollar/Cad rallied sharply late Friday as rumors swirled of yet another terrible number today.

...more...

[Demeter]

44. Fully Support First Article's Proposal

Time to take the profiteers out of profits.

[ozymandius]

45. Thing is: we can point fingers at many people who "aided and abbetted".

The best part of pointing fingers - many of them are still alive. So they will live to see past glory evaporate. It's a Schadenfreude all-you-can-eat buffet.

Once the blame has been properly assigned to whom and for what, and their reputations are securely wedged into the toilet for the rest of their lives, we must go about either banning, outlawing, regulating or, in any other fashion, opening the derivatives trading process. Currency trading should be the first item addressed as it was the first opaque market to be established.

[tclambert]

53. With currency markets, I'm always afraid of government manipulation,

up to and including massive counterfeiting operations. I once heard a rumor that Saddam Hussein bought a number of the specialized printing presses we use for US currency. I think that was before the first war.

But c'mon, ya gotta have rules.

Butch Cassidy: No, no, not yet. Not until me and Harvey get the rules straightened out.
Harvey Logan: Rules? In a knife fight? No rules.
(Butch immediately kicks Harvey in the groin)
Butch Cassidy: Well, if there aint' going to be any rules, let's get the fight started. Someone count. 1,2,3 go.
Sundance Kid: 1,2,3, go.

Flat Nose Curry: I was rooting for you all along, Butch.
Butch Cassidy: Well, thank you, Flatnose. That's what sustained me in my time of trouble.

(Okay, just an excuse to quote the wisdom of Butch Cassidy.)

Actually, the whole financial bailout mess reminds me of another Sundance quote:

Sundance Kid: Think ya used enough dynamite there, Butch?

[DemReadingDU]

46. NPR: This American Life - Bad Bank

2/27/09 Alex Blumberg and NPR’s Adam Davidson team up once again to talk economy: specifically, why the working men and women of America have given hundreds of billions of taxpayer dollars to some of the largest and richest banks in the world. And why it's probably not enough. Plus, a man in Kansas city goes on a toxic asset road trip, and two guys from New Jersey with what just might be a solution to the whole problem.

You may also want to hear our first shows on the financial crisis, Giant Pool of Money and Another Frightening Show About the Economy—and you can get daily updates about the financial crisis on Alex and Adam's Planet Money podcast and blog.
http://www.thislife.org/Radio_Episode.aspx?sched=1285


5/9/08 Giant Pool of Money
http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1242

10/3/08 Another Frightening Show about the Economy
http://www.thisamericanlife.org/Radio_Episode.aspx?sched=1263

Planet Money podcast and blog
http://www.npr.org/blogs/money/

[Demeter]

49. Thanks!

I'm too lazy to do the google....

[Pale Blue Dot]

50. Those shows were very informative, and because of them I started listening to "Planet Money".

Unfortunately, I found that podcast to be just as full of status quo, pollyanna-ish thinking as anything else out there. Back in October, when I began listening, they would have a show in which they would confidently assert that one horrible thing or another was extremely unlikely to happen - and that very thing would happen later that week.

I'm anxious to hear the new This American Life episode, but I'm still not confident that these guys are completely facing reality yet.

[DemReadingDU]

55. This episode is good for those who need to know about the mortgage crisis

So this episode explains things in simple ways for anyone to grasp the mortgage crisis.

edit: 'This American Life' goes into more detail than the daily Planet Money podcasts.

[DemReadingDU]

51. NPR interviews Tim Geithner

Hear the interview, additional links for responses

2/25/09 Talking To Geithner
U.S. Treasury Secretary Tim Geithner's due on the line any minute now, for an interview with Adam Davidson (who'll be fueled by a last-minute dose of fruit salad). We'll break out a key part of it here, then post the full conversation for this afternoon's podcast. UPDATE: First thought: The secretary said nationalization of the banks would be the wrong approach, but he would not say the word "nationalization." Geithner talked about that "broad strategy" and what was and was not the "right strategy." But he never said "nationalization." Example: "Adam, that's not the right strategy for the country, for basic, practical reasons that our system will be stronger if it remains in private hands with support from the government to make sure those institutions can play their critical role."
http://www.npr.org/blogs/money/2009/02/talking_to_geithner.html

2/25/09 Hear: Geithner's Stress Test
If any single human being stands at the center of the global economic crisis, it's U.S. Treasury Secretary Tim Geithner. This afternoon, Geithner took his hands off the intricate machinery long enough for an interview with Adam Davidson.
As you'll hear in the podcast, the pairing of titan and reporter made for quite a dance.
Bonus: Producer Katia Dunn describes the scene in Geithner's office, where an aide helped to keep the Treasury secretary on message.
http://www.npr.org/blogs/money/2009/02/hear_geithners_stress_test.html

2/25/09 Listening To The Secretary by Simon Johnson
Secretary Geithner spoke with NPR’s Adam Davidson today and the result, on the Planet Money podcast, is a helpful guide to official thinking. The Secretary’s best line, at around the 18 minute mark is, ”If you underestimate the problem; if you do too little, too late; if you don’t move aggressively enough; if you are not open and honest in trying to assess the true cost of this; then you will face a deeper long (sic) lasting crisis.” The contrast he draws is with those who favor a more gradual approach to banking system problems that would “stretch it out.” After about 17 minutes (and again around 20 minutes), Secretary Geithner contrasts what he is doing with “letting the market sort it out by itself”. He does not even hint at the possbility that there is a government-led strategy that could faster than what he has in mind. So could it be that he really has in mind something that will actually be bold and move fast? I don’t think so. He says we will “make capital available where it is necessary”. But he also stresses, in response to Adam’s last question (after around 25 minutes), “ is not the right strategy for the country.” And Secretary Geithner says clearly “that broad strategy” would do more damage than his policies. The bottom line is that the government will support the credit system a great deal and in many innovative ways, but Treasury will try really hard to avoid FDIC-type takeovers/reprivatizations of large banks. This is quite striking, and presumably the hope is that a big “no nationalization” rally in the price of banks’ common equity will turn the tide more generally. But the government’s stress scenario is quite optimistic, the real economy continues to weaken, and global problems mount. How much government capital can you put into the banking system until the lack of taxpayer upside becomes quite awkward? And if that taxpayer upside takes the form of common stock, how do you prevent the state from effectively acquiring a controlling stake in large troubled banks? Numerous smart people are at work on this problem, but it is probably intractable. The underlying question is in any case much simpler. How long can you say, “we are being bold” when in fact you are not?
http://baselinescenario.com/2009/02/25/listening-to-the-secretary/

2/26/09 What An Economist Hears
People are debating whether Treasury Secretary Tim Geithner delivered fluff or substance in yesterday's interview with Adam Davidson. Simon Johnson, former chief economist of the IMF and a Planet Money regular, heard this: The bottom line is that the government will support the credit system a great deal and in many innovative ways, but Treasury will try really hard to avoid FDIC-type takeovers/reprivatizations of large banks. This is quite striking, and presumably the hope is that a big "no nationalization" rally in the price of banks' common equity will turn the tide more generally.
http://www.npr.org/blogs/money/2009/02/what_an_economist_hears.html

2/26/09 Feelings of despair by Paul Krugman
There’s so much to like about where Obama is going — health care, transparency in government, ending the war in Iraq. And the stimulus bill is OK, though not big enough. But on the question of fixing the banks, many of us are feeling a growing sense of despair. Obama and Geithner say the right things. But Simon Johnson nails it: How long can you say, “we are being bold” when in fact you are not? Obama and Geithner say things like, If you underestimate the problem; if you do too little, too late; if you don’t move aggressively enough; if you are not open and honest in trying to assess the true cost of this; then you will face a deeper, long lasting crisis. But what they’re actually doing is underestimating the problem, doing too little too late, and not being open and honest in trying to assess the true cost. The actual plan seems to be to keep the banks semi-alive by implicitly guaranteeing their liabilities and dribbling in money as necessary, all the while proclaiming that they’re adequately capitalized — and hope that things turn up. It’s Japan all over again. And the result will probably be a deeper, long-lasting crisis.
http://krugman.blogs.nytimes.com/2009/02/26/feelings-of-despair/

3/2/09 Geithner Analysis
http://www.npr.org/blogs/money/2009/03/geithner_analysis.html

3/1/09 The Geithner Interview by James Kwak
I finally got around to listening to Tim Geithner’s interview with Adam Davidson for Planet Money. (Simon already commented on it.) I had two main reactions.
http://baselinescenario.com/2009/03/01/tim-geithner-planet-money-interview/

3/2/09 What's Good for Citi - And What's Good for America by Steve Waldman
I've just listened to NPR's recent interview of Timothy Geithner. Adam Davidson did a great job of trying to get answers from Mr. Geithner. I felt sorry, at a personal level, for our Treasury Secretary, a very smart man imprisoned in a series of talking points, desperately afraid of the consequences of holding an honest conversation.
http://seekingalpha.com/article/123503-what-s-good-for-citi-and-what-s-good-for-america

edit to add missing text

[goforit]

87. Hey Tim??? How much did the Rothchilds pay you off???

[Ghost Dog]

59. Redefining the sacred in the banking rescue

Redefining the sacred in the banking rescue: James Saft
Fri Feb 27, 2009 8:25am EST

-- James Saft is a Reuters columnist. The opinions expressed are his own --

SINGAPORE (Reuters) - Another week, another set of protestations that U.S. banks will remain in private hands, apparently almost regardless of the consequences.

It is clear that nationalization violates a sacred value for U.S. policymakers, or perhaps they believe it to be a sacred value held by voters. As we know from behavioral economics, when people are confronted by a conflict between material advantage and their ideas of the sacred, they tend to opt surprisingly often for the sacred.

Sometimes that is utterly right, but in this case it is really a false opposition. The Federal Deposit Insurance Corporation takes control of failed U.S. banks almost every Friday, and while taking some of the biggest over would pose huge problems, it should be possible to do it, to speed recovery and to hang on to what is essential: a market-driven system of capital allocation and a credible 3- or 4-year glide path to privatization for those assets and institutions that end up in taxpayers' hands.

Fed Chairman Ben Bernanke added his voice to those maintaining that the crisis would be contained -- no, wait, that was 2007's line -- that the banks wouldn't be nationalized.

"I don't see any reason to destroy the franchise value or to create the huge legal uncertainties of trying to formally nationalize a bank when it just isn't necessary," Bernanke told the Senate Banking Committee on Tuesday.

...

"Franchise value" is a risible concept for many of the banks in question. Who will choose to do business with a bank whose shares are trading at penny levels, even if their deposits and funding are essentially backstopped by the United States? My guess is that it really only happens where that institution offers better than market terms to its clients, which in essence is a subsidy via the government and exactly the kind of market distortion those who oppose nationalization say they wish to avoid.

And while "legal uncertainties" are regrettable, let's get real; we are operating in a time of huge and immediately unresolvable uncertainties, legal and otherwise, not least how contracts underlying mortgage backed securities will be handled as part of the effort to stave off foreclosure.

...

I see this as part of the process of the U.S. renegotiating what is and isn't sacred. The problem with the old preference for preferred shares was that, while it checked the box of providing regulatory capital to banks, it did nothing to entice equity investors into holding their shares or committing new capital. Anyone could see that when the freight train of losses struck the bank's balance sheet, ordinary shareholders would take the first hit.

Sadly, in their acrobatics to avoid putting banks into government control, the U.S. authorities risk becoming like a hospital that finally decides to use the wonder drug of common equity on patients who have already died.

What the government needs to do is real triage, leaving some to fend for themselves, giving those with genuine hope support -- and common equity is the way to do that -- and euthanizing the zombie banks. Some of those in the middle might just end up with the government as majority shareholder.

/... http://www.reuters.com/article/reutersComService4/idUSTRE51Q2ME20090227?sp=true

[DemReadingDU]

60. Pension bombs going off

3/2/09 Pension bombs going off by Paul Merrion

Exploding pension fund shortfalls are blowing billion-dollar holes in the balance sheets of some of the Chicago area's biggest companies, forcing them to make huge contributions to retirement plans at a time when cash flow and credit are already under stress.

Boeing Co.'s shareholder equity is now $1.2 billion in the hole thanks to an $8.4-billion gap between its pension assets and the projected cost of its obligations for 2008. At the end of 2007, Boeing had a $4.7-billion pension surplus. If its investments don't turn around, the Chicago-based aerospace giant will have to quadruple annual contributions to its plan to about $2 billion by 2011.

Stock market losses also pounded pension funds at Abbott Laboratories Inc., Caterpillar Inc. and Exelon Corp., with others sure to emerge as companies file their annual financial reports with the Securities and Exchange Commission in coming weeks.

The pension gaps underscore a growing conundrum. Unfunded pension liabilities have to be subtracted from shareholder equity, weakening balance sheets at a time when it's already tough to borrow money. Barring a reprieve from Congress, companies may be forced to make more layoffs or curb capital investments to divert cash to shore up pensions.

"There are companies out there faced with paying their pension plan or staying in business," says Mark Ugoretz, president and CEO of the ERISA Industry Committee, a Washington, D.C., lobbying group. ERISA refers to the Employee Retirement Income Security Act of 1974, which sets standards to ensure pension plans are sufficiently funded.

more...
http://www.chicagobusiness.com/cgi-bin/article.pl?articleId=31402

[antigop]

82. RE: pension plans -- there's more to the story

How many of these companies have used the pension funds to pay for retiree health expenses and buyouts?

http://www.freep.com/article/20090301/BUSINESS01/903010405/Questions+arise+from+GM+s+use+of+pension

Details are emerging about how General Motors Corp.'s U.S. pension funds went from a $20-billion surplus at the end of 2007 to a $12.4-billion deficit 12 months later.

Newly released numbers show that the funds, which help support more than 650,000 Americans, were tapped for billions of dollars over the past year for employee buyout programs, benefit increases and as part of the UAW's retiree health care trust deal.

Yes, the securities in the funds have tanked. But how many companies have exacerbated the funding problem by taking money out for other purposes?

So the companies went to Congress, asking for funding relief. They got some at the end of last year. Now they want more. And they go to Congress saying, "See...we need this or else we'll just have to lay off more employees."

Pension funds should be used for PENSION PAYMENTS--PERIOD. No payments for anything else. Yep, that Pension "Protection" Act of 2006 sure protected pensions, didn't it? Thanks, Ted and Max. You could have tried to stop this nonsense back then.

<edit to add> And the ERISA Industry Committee mentioned in the article -- it's an EMPLOYER group.

[DemReadingDU]

84. Uh oh

It's all collapsing - Portfolios, Pensions, HealthCare

All for the greed of a few wealthy banksters and CEOs

May they all rot in hell

[ozymandius]

65. a scabby opening half hour

9:54
Dow 6,967.51 Down 95.42 (1.35%)
Nasdaq 1,370.31 Down 7.53 (0.55%)
S&P 500 724.88 Down 10.21 (1.39%)
10-Yr Bond 2.969% Down 0.072
NYSE Volume 809,213,125
Nasdaq Volume 209,495,781.25

9:45 am : The major indices are trading with sizable losses in the first few minutes of trading. Both the Dow and S&P 500 have fallen to their worst intraday levels since 1997, breaking the levels set last Friday.

Only 3% of the companies listed in the S&P 500 are trading with a gain. Citigroup (C 1.55, +0.05) is the only Dow component trading higher. According to reports, Abu Dhabi Investment Authority is reviewing its investment in Citi. The Authority invested $7.5 billion into Citi last year.

Separate reports indicate Citi may be delisted from the Dow Jones Industrial Index. DJ30 -107.24 NASDAQ -17.32 SP500 -12.41 NASDAQ Dec/Adv/Vol 1622/493/138 mln NYSE Dec/Adv/Vol 2414/364/147 mln

[RUMMYisFROSTED]

66. Citi up 3.3%!

:woohoo:

[skoalyman]

73. aig's up

American International Group Inc. (AIG)
NYSE
Real-Time Snapshot:
03/02/2009 10:13 AM EST
0.48
Change
0.06
% Change
14.29% :puffpiece:

[ozymandius]

75. such wishful thinking

or stupidly programmed auto-buy algorithms

Wait! Are those goobermental funds?

[JNelson6563]

70. hey marketeers!

am on a plane en route to NYC but keep checking this thread. terrifying day ahead, thanks for making it possible for me to keep up at a glance.

Julie

[ozymandius]

74. Hey Julie!

Thanks for checking in from your high perch. How's the landscape look?

[RUMMYisFROSTED]

76. NYC?

[Renew Deal]

79. It's snowing pretty hard here.

Hopefully you'll get here without too many delays.

[ozymandius]

81. 11am: Dow 6,894.71; Nasdaq 1,350.07; S&P 500 715.58

Dow 6,894.71 Down 168.22 (2.38%)
Nasdaq 1,350.07 Down 27.77 (2.02%)
S&P 500 715.58 Down 19.51 (2.65%)
10-Yr Bond 2.949% Down 0.092
NYSE Volume 2,283,280,750
Nasdaq Volume 604,601,062.5

[CatholicEdHead]

103. As of 1:55pm ET down -232.01, Dow 6830.92

S&P 706.75 down 28.34
NASDAQ 1333.04 down 44.80

[goforit]

86. OBAMA is going to have his ASS handed to him!!! Popularity like GW Bush!!!

[ozymandius]

88. Context? Maybe the sarcasm icon?

[CatholicEdHead]

92. I disagree, most intelligent people know this decline started with W

in his term. He set up much of the recent bubble.

[goforit]

97. Agreed, it is Ws demise. Obama surrounding him with conservative people

In Health, CIA, Foriegn Policy (Hillary), and economically.
Only strong liberal actions can fix this economy
I don't think Guenther is strong.
Their estimates are not accurate, and it is much worse than expected.
People will be upset when unemployment hits 20%.

Anyone that is President in this scenerio will have falling poll #s.

[CatholicEdHead]

102. True, Obama's numbers will decline but probably not hit W's at the end of his term

Because he always speaks frankly to them and most people know he is trying his best. Given the deflation of both the Real Estate bubble and the Tech Bubble which never deflated mostly because of post-9/11 economic policies.

It is very hard to get estimates on things nowadays, if you follow SMW enough you know long held principles have not been followed and traditional economics makes the current new situation very difficult to quantify at times.

In trying to fix a problem, the Obama Administration is changing tactics gradually, by going with a more traditional approach to start with before trying anything more radical as the economic downturn effects everyone, not just liberals.

[antigop]

89. Good paydays make a good economy

What many on DU have said for some time...

http://www.postwritersgroup.com/archives/cocc090217.htm

The rock-bottom line of the economic crisis isn't that people took out mortgages they couldn't pay while shady brokers and rapacious financiers were all too happy to give them out, then buy them up and resell them to some unwitting investor. These are all symptoms of a disease that took hold deeper in the economy.

For too many years, too many people -- the majority of Americans, in fact -- just didn't make enough money to maintain a middle-class living. Though some liberal economists complained about this, few listened. Conservatives, meanwhile, promoted an alternate focus on the big homes, big cars, big TVs and other accoutrements of ''living large" that were supposed to demonstrate an ever-rising standard of living. All this bigness was bought with big credit card balances and even bigger scams involving mortgages that were so appallingly flimsy in their requirements that Bernie Madoff could have dreamed them up.

Who to believe? How about the Federal Reserve.

Its latest survey of family finances was released last week. It covers the period between 2004 and 2007 -- before the cascade of economic misfortune rained down hard in 2008. The Fed lays it all out: "Median incomes declined over the 2004-07 period for all groups except childless, single families. ... The largest decline (4.5 percent) was for couples ... with children."

Yup, those very hard-working American families so venerated in political speeches and campaign commercials. The same politicians who use these families as props were willfully blind to the downward trajectory of their lives. Many of them promoted policies that sped this spiral down while they lifted up the fortunes of their most fortunate political backers.

Three years does not make an economic lifetime. So what was going on before that? "Median income measured in the survey had been relatively flat for all income groups since 2001 after an earlier period of growth before 1998," the Fed says.

[Demeter]

112. The Very Ones that Voted for Bush

watch my crocodile tears. Pah!

[Tansy_Gold]

115. Yeah. My heart pumps

purple panther piss for 'em.


wankers




Tansy Gold

[AnneD]

90. When and how to take action over investing losses

When and how to take action over investing losses

<skip>

Other reasons for claims:

• Misrepresentation: If a broker gives false or incomplete facts about an investment. This typically occurs with riskier securities.

• Churning: When brokers generate commissions through excessive trading.

• Unauthorized trading: Buying or selling securities without investors’ knowledge.

• Cold-calling: Unsolicited phone calls using high-pressure, persistent tactics.
If your losses were the result of the broader market plunge however, that alone won’t sustain a case.

No matter how angry you are, you have to be able to show that your losses were the result of misconduct.

more.....

http://www.chron.com/disp/story.mpl/business/6285657.html

this might come in handy. I prefer short rope, tall tree.

[antigop]

91. Buffett defends Berkshire's derivatives bets

http://www.financialweek.com/apps/pbcs.dll/article?AID=/20090302/REUTERS/903029989/1036

Saying “derivatives are dangerous,” Warren Buffett defended his use of them after they played the main role in driving Berkshire Hathaway annual profit to a six-year low.

Buffett devoted one-fifth of his 21-page annual letter to Berkshire shareholders to explaining how he uses derivatives to make long-term bets on stock markets, corporate credit and other factors.

“It’s part of a portfolio of risk assumption that people appreciate in capital markets, and helps cement relationships that lead to more business for Berkshire down the road,” said Bill Bergman, senior equity analyst for Morningstar Inc in Chicago and a former Federal Reserve economist.

As regulators had requested, Buffett provided far more detail on the 251 derivatives contracts that Berkshire has, which the company said in theory could require $67.29 billion of payouts in the event every bet went 100% wrong.

He also said investors should distinguish Berkshire’s derivatives from others that dramatically increased financial leverage, made banks “almost impossible for investors to understand,” and threatened the collapse of financial services companies such as investment bank Bear Stearns and mortgage financiers Fannie Mae and Freddie Mac.

[Dr.Phool]

95. Key European stock index edges close to life low

LONDON, March 2 (Reuters) - European equities ended sharply lower on Monday as banking stocks tumbled after American International Group (AIG.N) posted record losses and HSBC (HSBA.L) announced Britain's largest ever rights issue.

The FTSEurofirst 300 .FTEU3 index of top shares provisionally closed 4.9 percent lower at 683.84 points -- the lowest close in six years and within 3 points of a lifetime low of 681.17 points hit in March 2003.

The index has fallen 14 percent so far this year after plunging 45 percent in 2008 on the back of a financial crisis that began with U.S. mortgage defaults in 2007 and has cast much of the world into a deep and vicious recession.

Energy stocks also came under severe pressure after crude prices CLc1 tumbled more than 9 percent as a deteriorating world economy threatened to cut further into fuel consumption.

Standard Chartered Bank (STAN.L) fell 11.6 percent, Lloyds (LLOY.L) was down 15.3 percent and (BNPP.PA) slipped 9.3 percent. HSBC (HSBA.L) plunged 18.8 percent after it launched a 12.5 billion pound rights issue as annual profits more than halved.

http://www.reuters.com/article/marketsNews/idCAL260173120090302?rpc=44

[DemReadingDU]

96. Martin Weiss: Beginning Now: The Panic Phase of the Collapse

3/2/09 Beginning Now: The Panic Phase of the Collapse by Martin Weiss

Just as the Obama Administration launches a triple tirade of new initiatives — a record stimulus package, a bigger round of rescues, and the largest deficit financing of all time …

Just as the Treasury Department doubles down on its bailouts for sinking giants — Fannie Mae, Freddie Mac, AIG, General Motors, Chrysler, and Citigroup …

And precisely when the government has raised hopes for a recovery in 2010 …

The panic phase of this collapse is about to begin.

The panic phase is an acceleration in the economic decline … a chain reaction of debt explosions … a free-fall in the financial markets … and a series of rude awakenings that will accelerate the decline even further:

Rude Awakening #1
In a Collapse, Washington’s Economic
Forecasting Models Are Worthless.
more...

Rude Awakening #2
The Economy Is Sinking Three to
Five Times Faster Than Expected.
more...

Rude Awakening #3
The Dangerous, Unintended Consequences of the
Government’s Rescue Efforts Can Only Deepen,
Broaden and Prolong the Economic Decline.
more...

Rude Awakening #4
Investors Who Fail to Take Protective
Action Could Lose as Much as 90 Percent
In Virtually Every Asset Imaginable.
more...


more...
http://www.moneyandmarkets.com/beginning-now-the-panic-phase-of-the-collapse-29932

[Pale Blue Dot]

99. I stole this and posted it in GD.

I'm a glutton for punishment.

[Dr.Phool]

100. You'll get spanked for that out there.

[Tansy_Gold]

109. Without yet reading the entire article, I would take issue with #4

I don't think there is any protective action that can be taken. None at all. Except get out while the gettin's good, if you haven't already.


Tansy Gold, who is as out as she can be

[ozymandius]

123. I think that by being "out" you have taken that circumscibed protective action.

I believe that Mr. Weiss is also considering the ever-safe Money Market IRAs. Those too are tied to the rot infecting the system. Then there's Treasury notes. Safe? With these deficits...? I dunno.

[Pale Blue Dot]

129. I agree with you on that point.

I don't particularly like the source because he too seems to think that there is a way out of this. Of course, many in GD noted this problem without ever discussing why the rest of the article was false.
Plus, only freepers want smaller deficits. :grr:

[Demeter]

143. There Are Always Alternatives

---Spock, Galileo 7

[specimenfred1984]

104. I was wondering, should I get out of stocks now? LOL

Nah, why not wait until you've lost everything instead of of just 80% of everything? Besides, people like specimenfred1984 are just conspiracy theorist kooks and traitors, naysayers and loons, worrywarts and anti-Americans. It's only a paper loss until you cash out. I only wish I had more money to buy more stocks now because I've been loading up!

Sincerely,

Philistine Amurikan Get Ahead Sociopath Investor

[skoalyman]

106. you might could get a bail out

:shrug: :rofl:

[specimenfred1984]

108. I could git 30 billion for fake insurance

AIG done it!

[ozymandius]

125. I thought about underwriting myself. But since I am a sorry campaign contributor

I would not get a bailout. Heck - I might even go to jail for defrauding myself.

[AnneD]

132. Specimenfred.....

you won't get a bailout-you aren't big enough!

[specimenfred1984]

105. Crash n'burn baby, but let's not hold anyone accountable for crimes

Let the entire market of America go to hell but god forbid we actually hold someone accountable for something! Torture camps, who cares! Market manipulation, who cares! Rigged elections and intelligence, who cares! Corrupt banks, who cares!

Seriously, we live in one fucked up country.

[closeupready]

107. Oh, I know. Making a lot of sense, huh? "who could have predicted?"

"No one could have foreseen!" :eyes:

[specimenfred1984]

137. lol, a guy on MSNBC said exactly that, "no one could have predicted"

"the outcome of the policies of the 90s and this decade that no one could have predicted". I watch a little of the business asshats to see what the propaganda is.

[Demeter]

114. God Fobid We Draw a Line in the Sand and Say "This Stops Here"

to Citi, AIG, B of A, and their ilk. If people are going to panic anyway, give them a good reason and an end to it all. A short, sharp shock (10 points to he or she who identifies the source of this alliterative phrase).

[tclambert]

117. Can't do it. The same people who voted for the other bailouts can't politically afford it.

Politicians would have to admit they were wrong. You could power a Ann Arbor for a week on the energy they would expend to avoid admitting any wrongdoing.


Oh, and "short, sharp shock?" Could it be from:

To sit in solemn silence in a dull, dark dock,
In a pestilential prison with a life-long lock
Awaiting the sensation of a short, sharp shock
From a cheap and chippy chopper on a big, black block.

a song about beheading from Gilbert and Sullivan's The Mikado? (I'm on the internet and Wikipedia is right over there. (It did make me smile to learn there's a song about beheading.)

[Demeter]

118. You Googled! Not Fair!

[tclambert]

122. Why remember anything when the knowlege of the Universe is right here?

The internet, and especially Wikipedia, has become my secondary memory. Very useful, now that age has begun to weaken my meat-based memory. I used to have a very sharp memory. At least I think I did. What were we talking about?

[Demeter]

141. Damned if I Know

[Wednesdays]

131. Even if they only succeeded in cutting it half off

...that would be something. :evilgrin:

[Demeter]

144. Now, That's What I Call a Fan!

You get double the points!

[Wednesdays]

154. Heh, I played Pish-Tush in a community theater production

So I am right, and you are right, and all is right, as right can be! :7

[Lasher]

116. Dow industrials fall below 7,000; lowest since '97

NEW YORK – Investors' despair about financial companies and the recession have brought the Dow Jones industrial average to another unwanted milestone: its first drop below 7,000 in more than 11 years.

The market's slide Monday wasn't nowhere near the largest is has seen since last fall, but the tumble below 7,000 was nonetheless painful. The credit crisis and recession have slashed more than half of the average's value since it hit a record high over 14,000 in October 2007. And now many investors fear the market could take a long time to regain the lost 7,000.

http://news.yahoo.com/s/ap/20090302/ap_on_bi_st_ma_re/wall_street_36

The S&P 500 is at 705 right now. The last time it finished lower than that was on November 1, 1996 when it closed at 703.77.

Edit: Looks like the S&P closed at 700.82. DOW = 6,763.29

[ozymandius]

119. THANK GAWD IT PASSED! Wanna see a snapshot at the close?

Absolutely thunderous volume too.

Dow 6,763.06 Down 299.87 (4.25%)
Nasdaq 1,322.85 Down 54.99 (3.99%)
S&P 500 700.85 Down 34.24 (4.66%)
10-Yr Bond 2.919% Down 0.122
NYSE Volume 8,809,122,000
Nasdaq Volume 2,256,796,000

3:30 pm : Market participants seem to be selling indiscriminately this session. Stocks are trading at session lows and several key commodities just closed pit trading with sizable losses.

Crude oil contracts closed pit trading at $40.15 per barrel, down 11.6% from Friday's close. Crude prices spent the majority of the session trading near their session lows. Demand concerns, stemming from ongoing financial and economic distress, continue to pressure crude oil prices.

Contracts for natural gas delivery closed the trading at $4.15 per contract, which is almost 1.5% lower than where the contracts closed Friday.

Precious metals were unable to gain amid broad-based weakness in stocks. Gold prices fell 0.3% from the prior session's closing price, finishing at $940.00 per ounce. Silver finished just 0.2% lower at $13.07 per ounce, according to delivery contracts. The metals were actually higher in overnight trading. DJ30 -257.90 NASDAQ -47.89 SP500 -30.35 NASDAQ Dec/Adv/Vol 2367/354/1.85 bln NYSE Dec/Adv/Vol 2920/198/1.43 bln

3:00 pm : Stocks are slipping back to earlier session lows after pulling up a bit. Approximately 94% of the companies listed in the S&P 500 are trading with losses.

Meanwhile, the Volatility Index, or VIX, is back above 50 (currently at 51). A higher VIX reading indicates rising estimates for future volatility.

The 50-day moving average for the VIX stands at 45, while its 200-day moving average stands at 39.DJ30 -259.65 NASDAQ -48.01 SP500 -29.99 NASDAQ Dec/Adv/Vol 2325/383/1.66 bln NYSE Dec/Adv/Vol 2885/227/1.29 bln

[ozymandius]

120. Is "selling indiscriminately" a metaphor for panic? nt

[AnneD]

134. We need to start a new economist vocabulary lists....

irrational exuberance the opposite of selling indiscriminately.
frothy market opposite of market correction.
the list can go on.:eyes:

[Demeter]

145. But That's Just Describing Both Ends of the Same Pencil

One end adds, the other erases....

[AnneD]

160. I did opposites as a way to describe.....

but we could do a whole urban dictionary thing.

[CatholicEdHead]

124. Ouch

The lowest point at the end of the day? Is the bottom anywhere in sight yet? It sure does not feel like it yet.

[tclambert]

121. Ding, ding, ding. Dow surges in last minute! Closes way up for the day!

Huh, apparently writing something on the internet isn't enough to make it true.

DJIA down 4.25%, S&P 500 down4.66%. Nasdaq down 4%.

Magic stock market fairies failed to appear, flew into a bug zapper by accident.

[ozymandius]

128. Heh - indeedy. I read your subject line and wondered

where the hell did that come from? Bug zapper - I like that! :)

[ozymandius]

127. Closing numbers and blather. Looks like we regressed to 1996.

Dow 6,763.29 Down 299.64 (4.24%)
Nasdaq 1,322.85 Down 54.99 (3.99%)
S&P 500 700.82 Down 34.27 (4.66%)
10-Yr Bond 2.919% Down 0.122
NYSE Volume 8,901,875,000
Nasdaq Volume 2,356,204,000

4:30 pm : Stocks fell for the fourth straight session as a sweeping selling effort took the S&P 500 down to levels not seen since October 1996.

The downward move slowed late in the session as the S&P 500 approached the 700 level. Though unable to forcefully break below that key level, the stock market still finished just above 700, which will likely represent a closely watched level again tomorrow.

AIG (AIG 0.42, +0.00) fed fears about the health of the financial system by posting a fourth quarter loss exceeding $60 billion, which is being reported as the largest quarterly loss in U.S. corporate history. To help prop up AIG, the government will give the insurance giant an additional $30 billion.

European financial giant HSBC (HBC 28.25, -6.55) will issue a discounted rights offering to existing shareholders, pare its U.S. consumer operation, cut jobs, and reduce its dividend. HSBC also reported lower lower profits.

The announcements came after Citigroup (C 1.20, -0.30) announced late last week that it has reached a deal in which the government will end up with a 36% stake in the company.

Financial stocks finished the session with a 6.8% loss, which was in-line with declines seen in the materials (-6.9%), industrials (-6.7%), and energy (-6.4%) sectors.

With 98% of the companies in the S&P 500 posting a loss, investors pursued the relative safety of Treasuries. The benchmark 10-year Note climbed roughly 38 ticks this session. That lowered its yield to roughly 2.89%.

Though also considered a safe-haven, gold prices fell 0.3% from the prior session's closing price, finishing at $940.00 per ounce.

In other commodities trading, crude oil contracts closed pit trading at $40.15 per barrel, down 11.6% from Friday's close.

Economic data continues to do little to lift investor sentiment, though January personal income and spending were better than expected. Personal income for January was up 0.4% after declining 0.2% the prior month. Economists were calling for a 0.2% decline in January. Core personal consumption expenditures (PCE) for January increased 0.1% month-over-month, in-line with expectations. The prior reading was flat.

The February ISM Manufacturing Index inched up to 35.8 from 35.6 in January. Economists expected a reading of 33.8 for February. Since the reading remains below 50, the slight month-to-month improvement merely indicates the rate of contraction has slowed.

The reports were also largely relegated as famed value investor Warren Buffett stated he believes the economy is in shambles, and that it will likely remain that way beyond 2009.

January pending home sales are due tomorrow morning (10:00 AM ET). Meanwhile, Fed Chairman Bernanke testifies on the U.S. economy and budget before the Senate Budget Committee tomorrow (10:00 AM ET). Treasury Secretary Geithner will testify to the House Ways and Means Committee on the federal budget later in the day (12:30 PM ET).DJ30 -299.64 NASDAQ -54.99 SP500 -34.27 NASDAQ Dec/Adv/Vol 2435/304/2.15 bln NYSE Dec/Adv/Vol 2934/185/1.98 bln

[Tansy_Gold]

130. Here's what I'd like to know

What was AIG's net worth as of, say, 01/01/01. And I'm just picking that as an arbitrary point of reference.

Then, what was it as of, say, 12/31/07. Or even 12/31/06. Combined balance statement, no funny numbers, no off-balance-sheet partnerships, etc. What was their claimed valuation with all the good insurance business and all the phoney baloney derivatives and CDSes and other shit.

IFI -- ***IF*** -- the net worth rose by billions and billions and billions as a result of all the derivatives and CDSes and so on, then it's all paper money. There's no there there. The losses are just a realization and acknowledgement of that fact. And if so, then all the bailing out with REAL money is unjustified. Claw back the dividends paid on the phoney earnings and stick it out or crumble under the weight of the real debt.

Nobody's asking these questions.


Except


Tansy Gold

[ozymandius]

135. Look at this.

http://www.secinfo.com/dsvr4.42S7.htm#1stPage

This data is from 12/30/2000. I am still scrolling through this. However, I offer this for your perusal since you have honed knowledge of the intricacies of these statements.

It should not be so difficult to find the current valuation of AIG. Yahoo! has a database with searchable historical data with today's closing valuation at the top of the the list.

[ozymandius]

136. I think I found it. Look at these pages in the 10K SEC filing for 2000.

Asset summary from 12/2000 are as follows (pp.81-84):
Financial Services = $81,016,000,000
Life Insurance = $142,045,000,000
General Insurance = $85,270,000,000

Total = $308,331,000,000

Does this sound right?

[Tansy_Gold]

140. Well, not exactly

I haven't had a chance to look it over closely and I am no more qualified as a corporate auditor than I am as a lawyer. Oh, wait, I am a teensy weensy bit more qualified, but not much.

However, these are asset totals but that's not the same as net worth.

If I buy a house for $400,000, I have a $400,000 asset. But if I have a $395,000 mortgage on it, I only have $5,000 of net worth. If the real estate market goes up and similar houses to mine are now selling for $450,000, I can claim to have $55,000 of net worth, even though no money has changed hands, no money has come into my possession. If the market takes a downturn and comparables are selling for $350,000, I now have a net worth of negative $45,000.

What I'm curious about is whether AIG and all/any of the other recipients of bailout money are claiming that hypothetical $45,000 as a LOSS that's keeping them from operating and therefore they need this infusion of billions of tax dollars. Did they ever claim the gain in valuation as income and pay taxes on it? Probably not; they'd have claimed it's just a paper valuation and not really cash. But if they are now claiming their loss entitles them to bailout funds. . . . . . .isn't that just a paper loss?

Here's another way to look at it:

I buy a house for $350,000 cash. I now have an asset worth $350,000 and because I have no corresponding debt, my net worth is also $350,000. If the real estate market goes up, I now have increased net worth, even though no cash money is involved. If the market goes down, my net worth drops, even though I haven't lost a penny.

But what happens if I pay cash for the house at $350,000 but when it goes up in value to $400,000, I take out a home equity loan of $50,000. I have an asset worth $400,000 but there's now a $50,000 mortgage, so my net worth is the same as before. (Some might counter with listing the house as a $400,000 asset PLUS the $50,000 in cash, to give a net worth of $400,000 but I'm not sure that's quite kosher. However, I suspect it's been done more often than not to inflate net worth. Again, I'm just not enough of an expert to know.)

It's rather like all the discussions about whether there will be 50,000 combat troops in Iraq after 2011 or 20,000. No one ever discusses how many civilian contractors there will be. . . . . . . .



However, there will be



Tansy Gold

[ozymandius]

148. That sounds like a question for the foresic accountants.

I noticed the financial disclosure reports were revised in 2005. So if capital assets were revised then net worth was too. This piques my interest. I'd like to pursue this a bit more - see what floats to the top.

[Karenina]

138. What eludes me (not really) is...

WHY, once the feces hit the rotation device back in '07, were the firms in question not immediately swarmed by auditors, opening the books and reporting on their findings? :SIGH: It reminds me of my FIRST question on NINE-ELEVEN. "Where were the fucking f-16s?"

[truedelphi]

152. Or how is it that by labeling insurance policies

A long clever name, "Credit Default Swaps," then the the insurance regulator's fell in line and all looked the other way. Does that even make sense?

Another factor to consider - the drug cartels use the banks to launder their money. 90% of Mexico's economy is from drugs, and monies sent by Mexicans living in the USA back to their homes. The cartels even clean up one of their family members and have that individual BUY the figging' banks they need for the laundering purposes. And smaller banks have been acquired left and right by Citi - all through the late 1990's and early 00's. So could it be that the banks don't want much exposure on this matter. Even as I was musing over this the other night, the Money Channel had a long broadcast - a one hour special - on about how awful marijuana is and how profitable a crop and how we need laws with more teeth, so these awful small time operators don't continue to get away with it.

There was gold to be had by laundering that drug money. We better not interrupt the flow, by legalizing that stuff.

[Demeter]

146. I've Got Another Question to Ponder

What are we supposed to be saving these "too big to fail" firms for?

There will be nothing for them to do. They destroyed their very reason to exist.

There won't be the kind of business that used to keep them in high rents and bonuses for a long time, if ever. The contraction is world-wide, and Canada is not going to be able to pick up the slack, or even avoid it, and Canada hasn't got banking problems.

So, what are we wasting all that time, effort and money on these extinct, dead-man-walking dinosaurs for?

Makes one stop and think, I hope.

[Tansy_Gold]

151. Excellent question. Seriously.

One that ought to be forwarded to our few media -- Olbermann, Maddow, Moyers, etc.


:yourock:


Tansy Gold

[Demeter]

153. Why Thank You!

I'm tingling with your praise!

[Tansy_Gold]

156. It is meant with the utmost sincerity

Y'know, there are certain questions that just never seem to get asked, sometimes because the right people aren't in the right place to ask them and sometimes because no one thinks of them. And when someone does, it's like geezo shit, why didn't *I* think of that.

I'm in the middle of one of my big paying projects, so I don't have a lot of time to spend on this, but it's important enough to me to wrench some moments away from the $$$ machine :rofl:.

At the beginning of Maddow's show tonight, she started with something about the money being thrown at AIG, basically to pay off their gambling debts. Remember, they're the ones everyone else hedged their bets with, leaving AIG to cover everyone else. And when the bets started going against everybody. . . .

But I don't think she ever really had any concept of well, what do we do with them after we bail them out with $150 billions????

Maybe Enron should be the poster child, 'cause when they collapsed. . . . . the world went right on spinning. The booooshies stayed in office, California didn't go into perpetual black-out (though it's now getting closer). the stock market kept bubbling, and the world didn't come to an end. Jeff Skilling went to jail and Andy Fastow went to jail and how many of us even remember the name of the celebrated whistleblower who was one of the three women who shared Time Magazine's designation as person of the year? (Sherron Watkins; I'll save you the googling.)

In essence, AIG agreed to pay off on everybody's bets. They took the losing side on every issue. That's just plain stupid. And in doing so, they rewarded themselves so lavishly the word doesn't do it justice.

And now they want "us" to cover their bets? For what reason?

Nobody ever covered my bets, and I made some pretty stupid ones in my time. BF made a lot more than I, and for all his faults, I'll give him this: he's not lookin' for anyone else to cover his bets either. But both of us have real lives to live after the bets are paid or canceled or whatever.

It's kinda like playing Monopoly: the game ends when one person owns everything and the others have nothing left to play with. Well, the big boys have all the Monopoly money so the game's over. It's time for us to take our shoes and irons and Scotty dogs home to the real world.



The real


Tansy Gold

[skoalyman]

139. can we regress to 1986

better music in the 80's :headbang: next stop all aboard

[Demeter]

147. Go All the Way to 1976. Then I Won't Marry The Wrong Man

[Dr.Phool]

155. Asian markets just opened. Deep in the red already.

[truthisfreedom]

158. Can you explain something to me? The chart at bloomberg.com looks up... but the nubmers are down?

I don't get it! At the moment, if you look on the right at http://bloomberg.com you'll see the Nikkei chart and it's up from around 7170 at the open to about 7250 now. Instead of showing "+80" it says "-20.97". What's up with that?

[TheWatcher]

159. Rallied Hard Off The Lows, and Briefly went Green

But Nikkei is back down again.

Hang Seng has Rallied about 800 Points off the lows but is still down by 164.

Our Overnight Futures are at +78 and were as high as +82 and they have been jamming it hard since it initially sank after they opened after the close of the regular session.

SOMETHING is going on, because that is serious coordinated support for no news, especially after the Bomb Toyota laid.

I've looked all over the net for supporting Propaganda for the AM, but there is none yet.

The pattern for the past three weeks has seemed to be down hard on Monday, Prop and Artificial Support on (But not necessarily pulling the Market into the Green) Tuesday-Thursday, and then things fall apart at the end of the day on Friday.

We'll see if that pattern continues this week.

My next target was 6400 and we are only 363 points away from that.

After that it's 4500, but I'll be honest, after 6400 is broken, I don't see much support until we get back to 1987 levels.

This is very historical, and very frightening.

They need another Bubble, and FAST.

We should see a sharp reversal in the morning, news or not, at least at the beginning. But i don't know if it will hold for the rest of the day.

They have to get this thing back above 7000, so that the sheep do not stir further.

There was an almost abusive parade of Shilling BS on CNBC tonight, so I suspect the Official Sector will Bull it's way back in tomorrow.

It seems Da Boyz may be FINALLY running out of gas.

But you never know. Stay Safe Marketeers.

[saigon68]

161. It's heading South

Dow 6,736.14 -27.15 -0.40%

Nasdaq 1,321.07 -1.78 -0.13%

S&P 500 696.68 -4.14 -0.59%