STOCK MARKET WATCH, Friday March 27

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday March 27, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 2

AT THE CLOSING BELL ON March 26, 2009

Dow... 7,924.56 +174.75 (+2.21%)
Nasdaq... 1,587.00 +58.05 (+3.80%)
S&P 500... 832.86 +18.98 (+2.33%)
Gold future... 942.20 +4.20 (+0.45%)
30-Year Bond 3.65% -0.07 (-1.78%)
10-Yr Bond... 2.73% -0.04 (-1.41%)

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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

Hopeful Signs -- NOT!
BY MICHAEL PANZNER

Although long-time Financial Sense visitors are likely familiar with the GAMCO Mathers and Ned Davis Research versions of the graph, Morgan Stanley has put together a more comprehensive and colorfully up-to-date rendition of the now (in)famous chart of total U.S. debt as a percentage of gross domestic product. As you can see, not much has changed over the past two years as far as our precarious financial condition is concerned.

-chart-

This week brought forth a slew of economic statistics, with many reported data points beating Wall Street’s consensus estimates. That was enough to trigger calls from a number of mainstream economists that the economy had found a “bottom.” I don’t know what these so-called experts were looking at, but based on the following charts -- of durable goods orders, new single family home sales, Richmond Fed district manufacturing activity, and home prices -- their optimism seems somewhat unfounded.

.....

Over the past several weeks, three central banks -- the Swiss National Bank, the Bank of England, and the Federal Reserve -- decided that they were not having much luck with traditional policy measures and initiated what some have called the “nuclear option”: quantitative easing (otherwise known as cranking up the printing presses). The hope was that by buying mainly longer-dated bonds with money created out of thin air, authorities could unlock frozen credit markets and drive down the cost of borrowing. Unfortunately, while the initial reaction to the announcement from each central bank was not unexpected, longer-term interest rates have since crept higher in all three cases, suggesting that investors are worried about the inflationary consequences of “policymakers gone wild.”

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

[ozymandius]

2. Today's Reports

08:30 Personal Income Feb
Briefing.com -0.1%
Consensus -0.1%
Prior 0.4%

08:30 Personal Spending Feb
Briefing.com 0.3%
Consensus 0.2%
Prior 0.6%

09:55 Mich Sentiment-Rev Mar
Briefing.com 57.0
Consensus 56.8
Prior NA

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

[UpInArms]

38. U.S. Feb. real consumer spending down 0.2% - Feb. wage income falls 0.4%

01. U.S. Feb. real consumer spending down 0.2%
8:30 AM ET, Mar 27, 2009

02. U.S. Feb. real disposable incomes down 0.4%
8:30 AM ET, Mar 27, 2009

03. U.S. Feb. core PCE price index up 0.2%
8:30 AM ET, Mar 27, 2009

04. U.S. Feb. personal savings rate falls to 4.2%
8:30 AM ET, Mar 27, 2009

05. U.S. Feb. wage income falls 0.4%
8:30 AM ET, Mar 27, 2009

[DemReadingDU]

52. Wage Deflation Sets In

3/27/09 Wage deflation is setting in. Let's look at some anecdotal evidence. by Mish Shedlock

Wage Deflation Tally

* 9 Publishers
* IBM
* Hewlett-Packard
* Microsoft
* Con-way Freight
* Shinchang Electrics


Wage deflation is setting in like wildfire in the publishing industry. Technology and trucking are affected as well. Budget cuts in California and other states are affecting teachers. Rest assured this is not inflationary news.


click to read the articles associated with the above companies...
http://globaleconomicanalysis.blogspot.com/2009/03/wage-deflation-sets-in.html

[DemReadingDU]

62. CNN: Personal spending rises

3/27/09 Americans spending more
Government report shows spending by individuals rose for the second month in a row.

Consumer spending rose in February, rebounding for the second month in row after falling for 6 straight months, according to government figures released Friday.

The Commerce Department report showed spending by individuals rose 0.2% last month, after increasing a revised 1.0% in January. Economists surveyed by Briefing.com had forecast an increase of 0.2%.

Personal income fell 0.2% in February, following an increase of 0.4% in the previous month. Economists had forecast a decline of 0.1%.

The report also showed that personal savings declined $27.4 billion in February to $450.7 billion. The personal savings rate, expressed as a percentage of disposable personal income, fell to 4.2% from 4.4% in January.

http://money.cnn.com/2009/03/27/news/economy/personal_spending_income/index.htm

[ozymandius]

3. Oil falls in Asia amid concern over price outlook

SEOUL, South Korea – Oil prices fell below $54 a barrel in Asia Friday, retreating from a new high for the year, on concerns about the sustainability of recent gains.

Benchmark crude for May delivery fell 55 cents to $53.78 a barrel by midday in Asian electronic trading on the New York Mercantile Exchange.

.....

But those recent gains have left room for declines amid a volatile outlook, said Victor Shum, an energy analyst at consultancy Purvin & Gertz in Singapore.
...
He attributed crude's recent gains to "spillover from the equities market with no change in fundamentals."

.....

In other Nymex trading, gasoline for April delivery fell 1.44 cents to $1.5167 a gallon, while heating oil dipped to $1.4743 a gallon. Natural gas for April delivery fell 0.7 cent to $3.940 per 1,000 cubic feet.

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

[ozymandius]

4. Inquiry Asks Why A.I.G. Paid Banks

Members of Congress and the New York State attorney general demanded detailed information Thursday on how tens of billions of taxpayer dollars flowed through the American International Group during its crisis last fall and ended up in the coffers of several dozen big banks, shielding them from losses.

The new inquiries shine a spotlight on a question that is exponentially bigger, in dollars, than the $165 million in bonuses that A.I.G. paid out this month, but which has been overshadowed until now by the uproar over the bonuses.

....

The banks and investment firms that ended up with A.I.G.’s bailout money last fall were, in many cases, counterparties to derivatives contracts it had sold, known as credit-default swaps, which guaranteed the value of assets in their investment portfolios. Had A.I.G. not been bailed out, and simply allowed to go bankrupt, they would have suffered investment losses running into the billions of dollars.

A.I.G. released the names of its major counterparties this month, at the urging of the Federal Reserve Board of Governors. They included Wall Street firms, like Goldman Sachs, JPMorgan Chase and Merrill Lynch, that have successfully resisted efforts to regulate credit derivatives in the past, on the argument that such contracts were valuable risk management tools, safe in the hands of the experts.

http://www.nytimes.com/2009/03/27/business/27cuomo.html

[ozymandius]

9. Cuomo Subpoenas AIG Data

New York Attorney General Andrew Cuomo, below right, subpoenaed American International Group's credit-default swap data to see whether its customers including Goldman Sachs Group, Societe Generale and Deutsche Bank were improperly compensated with taxpayer dollars.

.....

AIG sold swaps to more than 20 U.S. and foreign banks. After the company was rescued from collapse last year, banks that bought credit-default swaps got $22.4 billion in collateral and $27.1 billion in payments to retire the contracts, the insurer said this month. Goldman Sachs, Deutsche Bank and Societe Generale were among the largest recipients.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/26/AR2009032603867.html

[radfringe]

5. NOT A JOKE... wish it was

if you are interested in reading the document: --> GOP Road to Recovery (pdf) (won't take long, just about every other page is mostly blank) http://www.gop.gov/solutions/budget/road-to-recovery-final

last night - my partner quipped "their (NOPers) road is in dire need of repair - good thing there's infrastructure money in Obama's plan"

I liken it more to the NOPers throwing nails in the road

[ozymandius]

7. Why would they introduce this now?

They had twelve years to come up with a "plan". It is a sign of desperate times when the GOP sends out one of its Spokesidiots to sell their new catchphrases and all he has to say is, "We would give people a longer time and a chance to put more money over the next three years into their IRAs or 401(k)s to give them a better chance to average cost the investments that they’ve been making.” - So says Rep. “Buck” McKeon (R-CA).

[Pale Blue Dot]

19. Here's why (and this scares the hell out of me):

This Republican plan has no chance of passing. It's a stupid plan that is just more of the same from the GOP. BUT, it shows that they understand the real problem - debt.

I think that the Republicans are actually doing what they do the best: playing the political game. They're making a bet - a good one, I think - that the economy is going to collapse within the next 2 years. When it does, they will be able to point to this document and say, "See! We told you the problem was debt! We told you Obama's plan cost too much! We fought against the stimulus plan that didn't work; we fought against Obama's huge budget that added billions to the national debt; we fought against the Geithner Plan. Isn't it time for a change?"

This is one of my biggest fears. Americans have short memories and vote based on their wallets. By refusing to recognize the real problems in our economy, we are inviting the Republicans back into the political process. And if THEY are in charge during or after the collapse this country will never be the same.

By refusing to recognize the real problem we risk the ability to control how we shape the aftermath of the inevitable collapse.

[DemReadingDU]

21. Heard on the radio this morning

The Republicans are wanting the conservative Blue Dog Democrats to work with the Republicans to come up with a plan.

Wait! Aren't the Democrats in control! Who's in charge here? Democrats or Republicans?

[tclambert]

25. So you're saying the Republicans want America to fail.

More than that, they are betting on it. Their simple math: America's failure = success for Republicans. Okay, so their greatest fear is that Obama will succeed in bringing about a recovery. Well, I suppose even if the economy recovers in spite of Obama's efforts, if it happens on his watch, he will take credit for it and condemn the Republicans for their obstruction. The Republicans openly betting on failure means this math applies, too: America's success = collapse of the Republican party.

It's clear, then that good Republicans must do whatever they can to bring about the failure of America. But if they get caught, it also leads to dreadful results for their party.

That is a bad strategy with which to play the political game.

On Obama's side, he's actually trying to succeed. His advisers and his party are trying to succeed. Wall Street executives want America to succeed, too, since their firms' survival depends on it. The American people want success.

Not all of Obama's efforts are optimal. Some individual efforts may fail. But there are elements in his mortgage program and in the stimulus package that look promising. The bank bailouts have been horribly wasteful, horribly inefficient, but they have prevented a worse collapse. If you tilt your head and squint real hard you can see some sign of success in these bailouts.

All these efforts, all this desire for success should help achieve success. But beyond that, every recession and depression eventually comes to an end. Historically, this is already a long recession, something like 15 months. The recession that began the Great Depression technically lasted 43 months. I hope we don't go that long. That would be July of 2013. In 1929 - 1933, the government essentially refused to try to fight the economic problems of the day. We're way better off than that.

I don't regard the recent stock market rise as a genuine positive sign. But I am hopeful we will soon see genuine improvements in foreclosure rate, employment, and retail sales. Those are the indicators I'm watching. And I don't expect Obama's efforts to show results for a few months.

I have to give Obama pretty good odds of defeating the Republican game plan. He has the much stronger position. If he plays it moderately well, he should win big.

[Demeter]

28. Then Timmy Geithner Is the GOP Ace in the Hole

Timmy will guarantee failure.

[Tansy_Gold]

36. Ding! Ding! Ding! Golden Glob winner of the day!

And it's only quarter past five in the morning.





Tansy Gold, who really needs to find some time to shrink that rubber stamp photo. . . .

[Demeter]

40. Oh! I Have Been Dinged! My Week Is Now Complete!

See you all at the Weekend Economist Thread, opening tonight in the Editorial forum....

[Tansy_Gold]

73. A suggestion for WEE

Lead off with Matt Taibbi's latest, his pity party (NOT) for Jake DiSantis, late of AIGFP. It's a corker.



TG

[DemReadingDU]

45. Depends on the meaning of 'failure'

Possibly, Geithner is delaying the inevitable crash failure, until the transfer is completed of our money to the elites. Not sure how long that is going to take. In the end the system has failed us, but by then, the elites will have won (stolen) our money.

[DemReadingDU]

29. Maybe Obama is hoping to stretch out the economy for 4 years

then not run for re-election in 2012. Let the Republicans win in 2012 and the crash will occur under the Republicans.

[Demeter]

32. Giving Me a Headache There

That's too jujitsu.

[Pale Blue Dot]

34. I think Obama, like the past 4 presidents,

is trying to put off the problems until he's out of office. Everything he's done so far seems designed to put off the inevitable collapse as long as possible. The problem is that is cannot go on forever (that this common sense fact is beyond most people drives me crazy). Can he stretch this out another 4 years? 8 years? I doubt it - but then again, I'm surprised it's lasted this long.

[DemReadingDU]

39. I'm surprised it's lasted this long

Me too.

That's why I think Obama has his economic team to think of ways to delay the inevitable. Delay, delay, delay, until out of office. And possibly if the financial mess was just in the U.S., things could be delayed until 2013. But it's a global financial mess and we can't control what goes on in other countries. Something, somewhere in a major foreign country will eventually crash, taking down other countries around the world with it.
Just my opinion.

[tama]

98. Britain

that couldn't auction its bonds is very much starting to look like a crashed country.

Even though OECD, perhaps Iceland, Hungary, Ukraine, Romania and Baltic states allready falling in debt to IMF (hey, that was supposed to happen only to brown people! :D) count also as crashed countries. Ireland, Greece etc. having problems funding their debt and Greece also experiencing popular revolt.

Why was Mexican PM so fervently denying that Mexico is a failed state, if it isn't?

But maybe the definition of a "crash" is something much worse, as in supermarkets having nothing to sell (supply system broken and/or looting)? Not quite there yet, but give it a few years...

[DemReadingDU]

104. When credit is stopped, all systems will stop

That will be the epic crash.

The big banks are already unwilling to lend to other banks because of all the gazillion toxic assets. Some credit card companies have recently lowered the limits or canceled credit cards. Trade is slowing down because some companies can't get credit to ship. I think there will come a day when stores will not be able to accept deliveries because credit will not be extended. Cash only, for everything. Or barter. Like you say, it could happen in a few years, maybe sooner, depending on the banking turmoil around the world.


:scared:

[tama]

105. Farms

are also very dependent from debt and credit extended - to buy Monsanto seeds, fuel for tractors, fertilizers, etc. etc. Without credit and then hitting the PO ceiling, the problem goes deeper.

To the very soil, literally mined and depleted and natural fertility destroyed. To the roots.

Good time to invest in gardening tools and seeds... the demand is going through the roof.

And the land... there is going to be a big fight over land... the age old fight.

[DemReadingDU]

106. It's going to get ugly

Much worse than 1930's because this country doesn't have the base of manufacturing like it used to. And many farms are gone, developed into McMansions.

:(

[Demeter]

41. You Have a Point There

I would hope he was stalling for time to get up to speed--but his selection of aides makes me suspect that he is either off track or off message.

[BelgianMadCow]

46. well, maybe the can can be kicked down the road from a US perspective

(and I doubt that as well), but surely from a global perspective it's not gonna work. I would say there is a consensus the debt-based growth doctrine is untenable. Should the US try and continue, I think indeed the dollar (debt) will be regarded as untenable itself.

See also: the failed debt auctions in the US and the UK yesterday.

[Hugin]

54. I agree we want success, but, President Obama needs to widen his pool of advisers to include...

more voices(Particularly Progressive voices) and listen to them earnestly.

I'm worried that somehow they've gotten it into their minds that this 'Carbon Credit Swapping' is going to be the bubble that floats us out of this recession. But, this whole concept is more of the same, even if it does work. (There are those who think implementing it now will damage the economy more.)

[Ghost Dog]

48. AND (yet) they will say: WE NEED (MORE) WAR:

It must all at bottom be some (non-Jewish unless 'communist') furriners' fault.

[Zenlitened]

75. Excellent post. - n/t

[54anickel]

37. While people are begging for a waiver on the IRA , 401(k) withdrawal penalty just to put food on the

table.

WTF is wrong with these people?!?!?!?

edit to add: In reply to Ozy's quote way up there in post #7:

"We would give people a longer time and a chance to put more money over the next three years into their IRAs or 401(k)s to give them a better chance to average cost the investments that they’ve been making.” - So says Rep. “Buck” McKeon (R-CA).

[Demeter]

42. Well, THEY aren't Hungry

Their kid isn't in the ER dying. Their jobs are secure unless the dollar becomes completely worthless and the government falls. No worries!

[54anickel]

47. Phfft! Like I said, WTF is wrong with these people? How much longer before we rise up with

torches and pitchforks in hand at the gates? This "I got mine go get your own, you're worthless and deserve to be poor if you don't" blame the victim mentality will continue to play on as long as we let it. Most of the Murikan public has bought into that whole notion that everyone gets exactly what they deserve, regardless of what "bracket" they fall into.

[Ghost Dog]

53. The capitalist crisis and the return of history

By David North
26 March 2009
http://wsws.org/articles/2009/mar2009/dnor-m26.shtml

David North, the national chairman of the Socialist Equality Party (US), spoke last week at San Diego State University (March 19) and University of California, Berkeley (March 22) on “The Capitalist Crisis and the Return of History.” We publish here the notes upon which his lectures were based.

1. It is acknowledged by serious bourgeois economists that the global economic crisis—the worst since the 1930s—has dealt a devastating blow to the international legitimacy of the capitalist system. The free-market nostrums that have been exalted as unchallengeable truths by politicians, media talking heads and many academic economists for nearly three decades have been discredited, intellectually and morally. There is growing apprehension about the future that awaits the capitalist system. Martin Wolf of the Financial Times wrote on March 8:

It is impossible at such a turning point to know where we are going... Yet the combination of financial collapse with a huge recession, if not something worse, will surely change the world. The legitimacy of the market will weaken. The credibility of the US will be damaged. The authority of China will rise. Globalization itself may founder. This is a time of upheaval.

... big snip ...

41. The repeated occurrence of economic disasters cannot be explained as unfortunate accidents, which might have been avoided had investors been less greedy, executives more responsible, administrators more watchful, etc. Every five years or so, since the 1980s, there has been a major disaster. In the 1980s, the so-called "Decade of Greed," there was the Savings and Loans scandal, the junk bond mania (Ivan Boesky and Michael Milken), and the 1987 Wall Street crash. In the 1990s, there was the Mexican peso crisis, the dot.com bubble, the Asian crisis, the ruble crisis, and the collapse of Long Term Capital Management. In 2001 Enron collapsed almost overnight, when its fraudulent bookkeeping, in which prestigious accounting firms acted as accomplices, was exposed. Then, abetted by the decision of the Federal Reserve to cut interest rates to their lowest levels in decades, the housing boom developed. Underlying all these speculative operations is the decay of the real productive foundations of American capitalism, the separation of the process of the ruling class's self-enrichment from the processes of production and the creation of real value.
The end of dollar dominance

42. This crisis cannot be reversed by reviving a mythical "Golden Age" of American capitalism. First, the objective position of American capitalism in the world economy has deteriorated dramatically over the past 40 years. As I explained earlier in this report, the weakening of the dollar as far back as the late 1950s was among the earliest signs of the deterioration of the global position of the United States. In 1971 the US ended dollar-gold convertibility. Still, the dollar has remained the world reserve currency even as the United States became the largest debtor nation and accumulated a massive current accounts deficit. But, in yet another sign that this crisis marks a historic turning point, Chinese Prime Minister Wen Jiabao has publicly expressed concern about the future viability of the American dollar and the safety of Chinese dollar holding. "We have lent a huge amount of money to the US. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried," he said recently.

43. The financial viability of the United States has been called into question by a major economic power—one that happens to be the largest foreign holder of US dollars. While American commentators have, for the most part, brushed off Wen's statement—on the grounds that China would not, for its own sake, risk the global financial consequences of lowering its dollar holdings and igniting a run on the American currency—it is difficult to exaggerate its significance. Up until now, the global role of the dollar provided the United States with a unique financial advantage. The United States controlled the printing of a currency that functioned as the world reserve currency.

44. Were the dollar to lose its unique global status, this would have immediate consequences not only for the global position of American capitalism, but also for the conduct of its domestic economic policies. It needs only to be pointed out that the entire stimulus package of the Obama administration, which entails running multi-trillion-dollar deficits, depends upon the willingness of foreign creditors to hold US dollars.
A systemic crisis

45. The analysis presented in this lecture has stressed that the present crisis is of a systemic, rather than conjunctural character; and that its development is the outcome of the protracted decline in the global position of American capitalism. The rampant financial speculation, fueled by debt, is not the cause of the crisis, but, rather, a manifestation of deep-rooted contradictions in the American and global economy. As we have sought to explain, the very measures undertaken by American capitalism to respond to economic pressures that it confronted more than four decades ago prepared the foundations for the crisis that it confronts today.

46. Precisely because of the historic and global character of the contradictions that underlie the present crisis, the claims of the Obama administration that the present downturn will give way, within some sort of reasonable timeframe, to renewed and sustained economic growth, accompanied by a recovery and improvement in the living standards of the broad mass of the population, will be discredited by events. Regardless of fluctuations in the economic conjuncture from month to month and quarter to quarter, the enduring impact of this crisis will be a long-lasting and deeply painful deterioration in the living standards of the working class in the United States.

47. Moreover, if history teaches us anything, it is that an international systemic breakdown of capitalism leads inexorably to violent political convulsions. Capitalism in crisis becomes the breeding ground of political dictatorships and rampant militarism. Out of the economic breakdown of the early 1930s emerged first fascism and, later, world war. The restabilization of capitalism in the aftermath of World War II was purchased with the blood of tens of millions.
The social physiognomy of the American ruling class

48. To recognize the dangerous implications of the unfolding crisis is not alarmism, but political realism. There is no reason to believe that the ruling elites will respond in the first and second decades of the 21st century to the breakdown of capitalism with any less brutality than they did in the 1930s and 1940s. Nothing in contemporary culture suggests that the super-rich of the corporate and financial elite has grown more civilized and less prone to violence in defense of its interests than the magnates of the last century. The operation of the capitalist economy cannot be abstracted in some sort of metaphysical way from the class relations and interests to which it gives rise and in which it is embedded. During the past quarter century, the decay of American capitalism has created a powerful social constituency, commanding vast wealth, whose social and political arrogance has been magnified by its economic parasitism. If any conclusion can be drawn from its initial response to the bankruptcies and collapses produced by its own policies, it is that the ruling class is determined to make the mass of the population pay for the cost of the crisis.

49. Observing the response of the ruling elite in the United States to the economic crisis, one cannot help but note the parallel to the French aristocracy on the eve of the revolution that erupted in 1789. Every effort to find a rational solution to the financial crisis that confronted France was blocked by the aristocracy, which was determined to exploit the crisis in its own interests. The nobility would not tolerate any measures that threatened to undermine its wealth, status and prerogatives. In the end, their intransigence drove the mass of society, the "Third Estate," to ever-more radical measures.

50. The brazen contempt for public opinion displayed by the executives of failed banks and corporations as they reward themselves with multi-million-dollar bonuses, looted from funds provided by taxpayers, exposes the unalterably reactionary and socially destructive character of the American ruling class. It will do anything to protect its wealth and privileges. The AIG affair is typical of a society in which the rich, intoxicated by privilege, believe that they can do what they wish, unencumbered by legal, let alone moral restraints. President Obama's Treasury Secretary Tim Geithner, a multimillionaire (like many other members of the administration), cheated on his taxes—with no legal or professional consequences. Paying taxes, as we were once told by a real estate mogul, "is for little people."

51. One is struck by the degree to which the American ruling class has acquired the characteristics of a decadent aristocracy. Self-obsessed and narcissistic, it seems utterly impervious to the feelings and sentiments of that portion of society that is compelled to work for a living. In the midst of the AIG scandal, one of the leading business columnists for the New York Times, Andrew Ross Sorkin, argued that the $160 million bonuses must be paid to AIG, in the interest of preserving the sanctity of contracts! And yet, the same columnist has called for the ripping up of the contracts of autoworkers and the elimination of benefits and the lowering of wages. Legal standards, as we see, are determined by class interests.
The policies of the Obama administration

52. This basic social fact must be kept in mind as one considers the course that events are likely to take in the months ahead. The policies of the Obama administration are determined entirely by the interests of the corporate and financial aristocracy. In this sense, those who compare Obama to Roosevelt are engaged in either public deception or self-delusion. Despite the gravity of the economic crisis, the immense economic resources of the United States in the 1930s still allowed Roosevelt to experiment with social reforms. That option no longer exists today. Contemporary American capitalism lacks such resources.

53. However, there is certainly one significant aspect of developments in the 1930s that is highly relevant as one considers the probable course of events in the months to come. There is no doubt that the first "100 days" of the Roosevelt administration, with its barrage of policy initiatives, indicated a significant change in government policy. But the real impulse for a radical change in American society came not from above, not from Roosevelt, but from below—from the great mass of working people who, with increasing militancy and daring, took matters into their own hands. The really significant changes in social conditions in the United States were the product of the great mass strikes of 1934 in Toledo, San Francisco, and Minneapolis; of the founding of the Congress of Industrial Organizations (CIO) in 1935; and of the great sit-down strikes of 1936-37.
Crisis and class forces

54. The most essential feature of a historically significant crisis is that it leads to a situation where the major class forces within the affected country (and countries) are compelled to formulate and adopt an independent position in relationship to the crisis. That is, they are driven to advance a solution to the crisis in which their own social needs and interests are expressed. For the ruling classes, this process takes place rather naturally. They assume that their interests, political and economic, are the only ones of any importance. Thus, in the present situation, the Obama administration—having completed a "seamless transition" from its predecessor—has no doubt that its main priority must be the propping up of the banks, while avoiding any measures that impinge on the wealth and prerogatives of the corporate and financial aristocracy.

55. For the working class, the formulation of an independent attitude toward the crisis, with the necessary program and policies, is a more protracted social and political process. The masses must work through their experiences and draw their conclusions. But this process is already under way. The chasm between the promises of the election year and the reality of government policy is becoming more evident each day. As the need for action becomes ever more urgent, the working class will lose its patience with purely rhetorical and empty invocations of "change."

56. "The history of all hitherto existing society," wrote Marx and Engels in 1847, "is the history of class struggle." Underlying all the claims that Marxism had been refuted and that the egalitarian aspirations of socialism were irrelevant to the modern world, was the complacent belief that the "class struggle" belonged to the past. Ironically, the official dismissal of class struggle occurred under conditions in which the ruling class pursued (and continues to pursue) its own interests relentlessly.

57. The one undoubtedly positive feature of the economic crisis is that it is laying bare the real social relations of modern capitalist society, exposing the irreconcilable conflict between the interests of the working class and the capitalist aristocracy, and, therefore, preparing the ground for the resurgence of the working class and the resumption of open class struggle on a scale that will eclipse by far the battles of the 1930s. The American working class is being drawn into an international maelstrom of revolutionary class struggle. It is in this sense that the world crisis has set the stage for the "return of history."

[54anickel]

74. Didn't Obama state early on that we'd have to force his hand for what we wanted? It will be the

only way to see "change" implemented. Was he daring or recommending #53?

53. However, there is certainly one significant aspect of developments in the 1930s that is highly relevant as one considers the probable course of events in the months to come. There is no doubt that the first "100 days" of the Roosevelt administration, with its barrage of policy initiatives, indicated a significant change in government policy. But the real impulse for a radical change in American society came not from above, not from Roosevelt, but from below—from the great mass of working people who, with increasing militancy and daring, took matters into their own hands. The really significant changes in social conditions in the United States were the product of the great mass strikes of 1934 in Toledo, San Francisco, and Minneapolis; of the founding of the Congress of Industrial Organizations (CIO) in 1935; and of the great sit-down strikes of 1936-37.

[Ghost Dog]

84. I would take it that way, if I were you folks.

T'would be quite normal behavior, in the circumstances, in Europe. That's why European governments (& 'corporate aristocracies') have to be a bit more careful, though it's still not enough.

It's remarkable how fresh and relevant classical Marxist Economics sounds these days, imho, at least up to a point (diagnosis & early prescriptions).

[Demeter]

86. Yes, Obama Said That--But He Isn't Listening to Us

As Proof Number One: Howard Dean

Proof number 2: The sinking of the SS "Bipartisanship", which wasted a lot of time and good will.

Proof #3: Single Payer Universal Health Care

#4: AIG in all its manifestations

#5: GM and Chrysler

need I continue?

[54anickel]

93. My guess is we aren't loud enough or pushing hard enough. He'll only be

ALLOWED to toss us a bone when we become a threat to the elite's "status quo". Until then, crumbs.

Only way he'll be "allowed" to hear us is:

[Karenina]

102. EXACTAMUNDO!!!!

[Tansy_Gold]

94. Ditto, Ditto, Ditto, Ditto, and Ditto . . . . . . and

#6: No relief for mortgage foreclosures


ALL the help has gone to those who need it least, pretty much none to those who need it most. And it's all being done with the taxes paid by the latter.

How do we yell louder? Where do we find spokespersons?

[Demeter]

99. And Don't Forget Afghanistan

which defeated every invader since Alexander the Great, but we're so arrogant, we have nukes, we aren't going to let people who live on practically nothing to defeat us!

The generals must be either out of their mind, or snatching themselves bald. Or both.

[Karenina]

103. Torches, pitchforks, tar and feathers.

Actions speak louder u.s.w.

[DemReadingDU]

108. Where are the protests in the U.S.?

The French are always protesting something, shutting down the country. I guess Americans will protest when most are jobless, homeless, penniless, and hungry...when they have nothing.

[Karenina]

110. They'll shoot each other first.

[DemReadingDU]

111. I think so too

Desperate people do desperate things

[54anickel]

127. Yep, it's part of that "rugged individualism" they like to brag about. Nothing "united" going on

these states.

[AnneD]

132. We elected Obama to be our spokesman......

amd he seems to have crapped out on us. The only reason FDR did as much as he did was that people were starting to riot.

[Tansy_Gold]

49. A terminal case of greed-engendered blindness

BF and I had this discussion again the other day regarding the alleged AIGFP resignation letter in the NYT.

We have a carefully nurtured culture here in the U.S. -- and sometimes exported -- of admiring and encouraging the accumulation of wealth. While we sometimes think (or at least like to think) that "western civilization" is a homogenous whole, there are in fact enormous differences in the way we, as compared to say the French or the Dutch or the Norwegians or even the Romanians look at wealth and the wealthy.

For one thing, in our culture the possession of great wealth does not carry a social obligation to "do good." That oil baron John D. Rockefeller endowed a university or Andrew Carnegie funded public libraries or that Bill Gates donates millions/billions to his charitable foundation is considered kind and generous, but if they were mere greedy bastards who kept everything to themselves, no one here would really fault them for it. The DiSantis resignation letter includes the claim that he will donate all remaining bonus money to charity, under the assumption that he is not required to do so or obligated to do so, and therefore charitable giving is seen as the aberration, not the norm.

As these 1%ers congregate and isolate themselves further and further from the general population, they do not hear the voices of complaint. Communication comes from them to us, but rarely the other way around. The tv screen/computer monitor brings them to us, but keeps us securely away from them.

That's why I knew the appointments of Geithner and Summers, et al, were going to be a catastrophe in terms of any meaningful economic reform under the Obama administration. They've all been cocooned in that Wall Street world, where wealth, the acquisition of wealth, the consolidation of wealth, the protection of wealth are prime motivators. Common good is not part of the picture.

There are voices of sanity, of community, in the government and in the media. They are neither strident enough nor numerous enough to be heard beyond the choir they preach to. Until oposition voices reach the mainstream - not just 60 minutes and th NYT editorial page, but the local tv news stations -- nothing will change. Those in power will continue to be in power, continue to be blind and deaf, until they are forced to open their eyes and ears. And I don't see that happening any time soon.


Tansy Gold

[dixiegrrrrl]

83. GOP = Guess Our Plan

[ozymandius]

6. Jobless rolls swell again as recession persists

WASHINGTON – Hopes that the economy may be poised for a recovery got a splash of reality Thursday: The unemployment rolls are still getting bigger as the recession maintains its grip.

For the 10th week in a row, the number of people receiving jobless benefits grew. It now stands at nearly 5.6 million, the government said — an indication that the labor market is still grim.

New claims for unemployment benefits rose again as well, to a seasonally adjusted 652,000, up from 644,000 the week before. The government also said the economy shrank at a 6.3 percent annual clip in the fourth quarter, slightly faster than its previous estimate.

"There is no sign of recovery here, and claims are usually one of the very first numbers to turn," Ian Shepherdson, chief U.S. economist at High Frequency Economics, wrote in a client note.

http://news.yahoo.com/s/ap/20090326/ap_on_bi_ge/economy

[fasttense]

43. Maybe they should call it a "jobless recovery" and get back to giving our tax dollars away

to monopolies and corporations.

:sarcasm:

[ozymandius]

8. Battles Over Reform Plan Lie Ahead

WASHINGTON — Outlining a far-reaching proposal on Thursday to rebuild the nation’s broken system of financial regulation, the Treasury secretary, Timothy F. Geithner, fired the opening salvo in what is likely to be a marathon battle.

....

But in fact industry groups are already mobilizing to block restrictions they oppose and win new protections they have wanted for years. Even though Mr. Geithner carefully avoided specific details, laying out mostly broad principles for overhauling the system, financial industry groups are identifying issues they plan to pursue and lining up well-connected lobbyists and publicists to help make their cases.

....

By contrast, Mr. Geithner’s plan marks the first attempt in decades to drastically tighten the restrictions on industry. It would create a new still-unidentified “systemic risk regulator” that would have the authority to scrutinize and second-guess the operations of bank holding companies like Citigroup or JPMorgan Chase, insurance conglomerates like the American International Group and other financial institutions that are deemed too big to fail.

Hedge funds and private equity funds, which have been almost entirely unregulated, would have to register with the S.E.C. and tell it about their risk-management practices. Many financial derivative instruments, like credit-default swaps, would come under supervision for the first time.

http://www.nytimes.com/2009/03/27/business/economy/27regulate.html?bl&ex=1238299200&en=40ab6d677c5bac74&ei=5087%0A

[ozymandius]

10. Japanese Stocks Fall, Paring Weekly Gain, Led by Shipping Lines

March 27 (Bloomberg) -- Japanese stocks fell, snapping the Topix’s longest winning streak in four years, led by shipping lines after Nippon Yusen K.K. reported a plunge in profit.

Nippon Yusen, Japan’s biggest shipping line by sales, tumbled 3.9 percent as a slump in cargo demand caused earnings to tumble 88 percent. Machinery maker Komatsu Ltd. sank 6.4 percent on a media report profit will drop by more than half. Nippon Building Fund Inc., the nation’s No. 1 real estate investment trust by value, jumped 6.8 percent after the Nikkei newspaper said the government may buy assets of property trusts.

The Nikkei 225 Stock Average slipped 9.36, or 0.1 percent, to close at 8,626.97 in Tokyo, erasing a 2.4 percent jump. The Topix index, broke a nine-day gain, losing 2.28, or 0.3 percent, to 824.53. For the week, the Nikkei climbed 8.6 percent, while the Topix added 7.8 percent, the most since November 1997.

http://www.bloomberg.com/apps/news?pid=20601101&sid=aR2I912z_f8Q&refer=japan

[ozymandius]

11. Japan Heads for Deflation as Retail Sales Tumble 5.8%

March 27 (Bloomberg) -- Japan’s consumer prices stalled in February and retail sales tumbled the most in seven years, signaling a return to deflation is likely to deepen the recession.

....

An unprecedented drop in exports is forcing companies to fire workers and cut wages, weakening household spending and pushing the economy closer to its worst slump in the postwar era. With the benchmark interest rate already at 0.1 percent, the Bank of Japan has little scope to stop prices from falling.

....

Central bank Governor Masaaki Shirakawa said this week that core prices are on the verge of falling and policy makers are committed to preventing the economy from sliding into a deflationary spiral.

http://www.bloomberg.com/apps/news?pid=20601080&sid=aCbQtl00eEIQ&refer=asia

[Demeter]

14. How Many Times Can Japan Deflate? Isn't There a Natural Stopping Point?

An economy can't deflate to zero, can it?

[ozymandius]

20. Deflate to zero? I don't think so.

I am looking this up right now and quickly running out of time. I'll get back to you after I find the notes about deflation that addressed this issue.

[Demeter]

59. Thanks for Looking--I Await Your Conclusion

rumble mumble--something rotten in the state of Denmark--rumble, mumble

[ozymandius]

113. Minus the notes - here's a couple of things to think about.

I assume we are talking about a market economy with competitive markets. Can the economy bottom at zero? I think not. Even when you are talking about wage deflation the situation is not practical because of attitudes regarding the value of work. In a wage deflationary period, there is one simple thing that governments can do about it: print more money.

This is an unpalatable tactic given the recent announcement from the Fed concerning Quantitative Easing which, as we have learned by now, is legal counterfeiting. But this (and any) government's willingness to do so implies that there are both the willingness and the mechanism in place to establish a floor under wages. And when that happens, prices will rise as well.

That is a great question you've asked, Demeter. I'll bet this subject is something real scholarly types could sink their teeth into.

[Demeter]

121. Only Some of Our Markets Are Competitive (Labor, specifically)

and if the Fed were printing money to support wages, we'd all be a lot less worried. But that counterfeiting is purely to support the fraud of the past 30 years.

Not a pretty picture.

[ozymandius]

128. You're right. They're not concerned with propping up wages.

The Fed is only concerned with wage inflation in that wages are kept low. Price inflation will eventually tug wages along. The overarching concern, as you say being part of the past thirty years' philosophy, resides solely (in my opinion) with the idea that free markets will decide which way wages will move as an aftereffect of all else.

My point in the former post is that if both wages and prices begin to deflate - there is an absolutely certain way to prop them up. I shudder to think what would happen if, suddenly, wages deflated either to those earned by slaves or that buying power declined to the point at which income is irrelevant. There would be a revolt.

[ozymandius]

12. Europe Stocks Fluctuate as Air France Drops; U.S. Futures Fall

March 27 (Bloomberg) -- European stocks fluctuated between gains and losses as the Dow Jones Stoxx 600 Index headed for its third straight weekly advance. U.S. index futures slipped.

....

Europe’s Stoxx 600 added 0.1 percent at 9 a.m. in London after earlier falling 0.3 percent, leaving it with a weekly advance of 4 percent. The MSCI Asia Pacific Index rose 0.1 percent, extending its climb since March 20 to 7.6 percent.

The MSCI World Index of 23 developed countries has gained 12 percent in March, the biggest surge since 1975, as banks from Citigroup Inc. to Bank of America Corp. and JPMorgan Chase & Co. said they made money in the first two months of 2009 and U.S. Treasury Secretary Timothy Geithner unveiled plans to rid financial firms of toxic assets.

http://www.bloomberg.com/apps/news?pid=20601085&sid=aMYjqfjrOPMc&refer=europe

[Ghost Dog]

85. Europe stocks close lower, snap 6-day winning run

LONDON, March 27 (Reuters) - European shares closed lower on Friday, with nearly all sectors declining as investors on both sides of the Atlantic took profits after a six-day rally. The pan-European FTSEurofirst 300 index of top shares fell 1.1 percent to close at 737.46 points. The index rose 2.7 percent over the week, and is up 14.2 percent from the lifetime low to which it sank on March 9. The DJ Stoxx Banking index is up more than 47 percent from its March 9 low.

...

Shares in Switzerland's UBS, the world's largest wealth manager in terms of assets, fell 7.3 percent as rumours swirled of a profit warning and writedowns in the first quarter.

Banco Santander, Credit Suisse and Societe Generale fell between 3.3 percent and 7 percent. However, Barclays soared 24.1 percent after saying it does not need to raise any fresh capital after Britain's financial regulator subjected it to "a detailed stress test" and was satisfied the bank's balance sheet can withstand more pain.

Shares in British rival Lloyds Banking Group were aided by the news, and added 10.3 percent.

Insurers were mostly lower. Allianz, Aviva, Prudential, Swiss Re and Zurich Financial fell between 2.2 percent and 5.8 percent.

...

Autos were among the few gainers, boosted by optimism from Asia after South Korea announced tax incentives and easier consumer financing to support its car industry. Daimler, BMW, Peugeot and Fiat rose 2.3 percent to 3.6 percent.

Societe Generale raised its recommendation on the European auto sector to "overweight" from "neutral".

"After significant underperformance, the auto sector is ready to rebound and now is the right time to buy the auto sector," SocGen analysts said in a note.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC 40 fell between 0.7 percent and 1.8 percent.

/... http://www.reuters.com/article/marketsNews/idAFLR93704120090327?rpc=44&sp=true

[ozymandius]

13. Asian stocks mostly higher after US extends rally

HONG KONG – Asian stock markets were mostly higher Friday, following gains on Wall Street as stronger-than-expected earnings reports from leading U.S. companies added to newfound optimism about the world economy. European markets opened mixed.

....

Hong's Kong Hang Seng index edged up 10.52 points, or 0.1 percent, to 14,119.50 after a choppy session, while Australia's S&P/ASX index added 0.7 percent to 3,672.3.

Japanese stocks reversed early gains, ending an otherwise stellar week on a slightly lower note. The benchmark Nikkei 225 average dipped 9.36 points, or 0.1 percent, to 8,626.97. But the index gained 8.6 percent over the past five sessions — its biggest one-week gain since October.

....

In mainland China, the Shanghai Composite Index rose for a second day, climbing 0.5 percent to 2,374.44, bringing its weekly gain to 4.1 percent. The advance was led by steel and silicon chip makers.

http://news.yahoo.com/s/ap/20090327/ap_on_bi_ge/world_markets

[ozymandius]

15. Stock Buybacks vs Performance (-or- Who's Been Buying)

From Ritholtz

Marketbeat:

Share repurchases by components of the Standard & Poor’s 500-stock index fell to lowest level in the fourth quarter of 2008 since the third quarter of 2004, according to S&P, as companies retreated into a hole, preserving cash as the market tanked.

According to the Federal Reserve’s flow of funds data, released quarterly, the biggest buyers of shares in the 2005-2007 period were U.S. corporations, coming at a time when households and mutual funds were net sellers of U.S. equities. The frenzy hit a peak in the third quarter of 2007, according to Standard & Poor’s, when $171.95 billion in repurchases took place – dovetailing neatly with the market’s peak.

Source: If Corporations Don’t Buy Stocks, Who Will?

[Zenlitened]

76. Hmmm.... share buybacks as a bubble indicator.

Who'da thunk it??!! :tinfoilhat:

[Demeter]

16. Fed officials hint recession in final stages

http://news.yahoo.com/s/nm/20090326/bs_nm/us_usa_fed_7


MINNEAPOLIS (Reuters) – Top Federal Reserve officials hinted on Thursday that the long U.S. economic downturn could be in its final stages, although the early stages of recovery will likely be far from stellar.

Meanwhile, policy-makers showed a split on whether the Fed's current stance of aggressively pumping money into credit markets poses a major risk of stoking high inflation.

Dallas Fed President Richard Fisher, who terms himself the most pessimistic member of the Federal Open Market Committee at present, said the Fed's aggressive rescue efforts should soon stem the decline in growth.

Weakness could be tempered after the current quarter, which is likely to match the annualized contraction of 6.3 percent in gross domestic product seen for the dismal final quarter of 2008, Fisher said at a conference in Dayton, Ohio.

Gary Stern, Minneapolis Fed President, said that at least a mild recovery could take hold by mid-year before healthier growth kicks in during 2010.

"Many pieces are now in place to contribute to improvement in financial market conditions and in business activity," Stern told the Economic Club of Minnesota. "There is reason to think that improvement is not too far off."

Jeffrey Lacker, Richmond Fed President, offered recent increases in U.S. retail sales, lower gasoline prices and steady wages as signs for hope on the economy.

It is reasonable to expect the economy to hit bottom later this year and then begin a gradual recovery, Lacker said in Charleston, South Carolina.

Still, Dennis Lockhart, Atlanta Fed President, told Reuters in Paris that the recession would drag on for at least a few more months.

The significance of a recent run of better-than-expected economic data, including Wednesday's durable goods orders for February, should not be overstated, he said.

"One month does not make a recovery, so we have to be careful not to react too strongly," Lockhart said.

INFLATION BALANCING ACT

Some financial markets participants fear the Fed's provision of huge amounts of liquidity to support the economy will fire up inflation when the economy eventually recovers.

The Fed's balance sheet, which as recently as mid-September 2008 stood at about $1 trillion, is now more than $2 trillion.

Just last week, the Fed vowed to provide the economy with an additional $1.15 trillion, partly by buying government bonds for the first time since the 1960s.

Charles Plosser, Philadelphia Fed President, told Reuters in an interview that a debate on how the Fed will shrink that balance sheet has to happen long before inflation flares.

Plosser also said that the composition of the balance sheet, as much as its size, troubled him and voiced support for buying Treasury bonds.

Bond purchases are "more neutral in their effects on the allocation of credit" than a number of other Fed programs which have targeted specific corners of the credit market.

Lacker, who along with Plosser is one of the Fed's biggest inflation hawks, seemed anxious to secure a commitment to run down the balance sheet as soon as possible.

"Such a large increase in the monetary base cannot be left in place indefinitely without creating quite sizable inflation pressures," he said.

"Choosing the right time to withdraw that stimulus will be a challenge and I believe it will be very important to avoid the risk of waiting too long."

Still, Stern, the Fed's longest-serving regional bank president, was less worried, saying the central bank had "ample time" to withdraw excess liquidity when the time was right.

"The relation between growth in the money supply and the path of prices holds in the long run, over periods of at least five and, more likely, 10 years," Stern said.

In the short run, most officials agree that the Fed is buying some needed insurance against the threat of deflation resulting from the downturn in global economic activity.

Inflation expectations had remained "pretty stable" in recent months, and the Fed's big balance-sheet blow-out would ensure that "deflation doesn't become an issue," Plosser said.

Lacker concurred. "I am confident that we can prevent outright deflation by expanding our monetary policy stimulus if need be."

LOOKING BACK - AND FORWARD

As they are left to mop up the worst financial crisis in seven decades, some Fed officials concede that signs of an impending meltdown went unnoticed for too long.

"Most in the financial community, including those of us at the Federal Reserve, failed to either detect or act upon the tell-tale signs of financial system excess," Fisher said.

Stern, meanwhile, termed the mortgage providers Fannie Mae and Freddie Mac were "poster children" for regulatory action taken way too late.

Without timely responses to financial crises, the costs to the real economy grow and grow, Stern said. "You want to deal with these things as quickly, and forcefully, as you can."

(Additional reporting by Kristina Cooke in Philadelphia, Alister Bull in Charleston, Pedro Nicolaci da Costa in New York, Andrea Hopkins in Dayton and Anna Willard and Tamora Vidaillet in Paris; writing by Ros Krasny)

[AnneD]

68. In their wet dreams.......

A jobless recovery is not a recovery:nuke:

[Hugin]

69. Did someone say bottom?

(_|_) <--- Here's another one.

[BelgianMadCow]

72. listing the series of bottom predictions is reminiscent of the WMD existence/location diatribe

there has got to be a bottom somewhere!!

The news here keeps getting more negative, every week another agency in another EU country comes with worse predictions. I get the feeling they all know how terrible it is but they're pouring the bucket slowly.

[AnneD]

79. You cheeky little monkey , you......

We haven't hit the bottom yet-just a ledge on our way down a very deep hole.

[Demeter]

87. I Posted It for the Humor

[Demeter]

17. Detroit Sold For Scrap

http://www.theonion.com/content/node/46937?utm_source=onion_rss_daily

DETROIT—Detroit, a former industrial metropolis in southeastern Michigan with a population of just under 1 million, was sold at auction Tuesday to bulk scrap dealers and smelting foundries across the United States.

"This is what's best for Detroit," Mayor Kwame M. Kilpatrick said. "We must act now, while we can still get a little something for it."

Once dismantled and processed, Detroit is expected to yield nearly 14 million tons of steel, 2.85 million tons of aluminum, and approximately 837,000 tons of copper.

The decision to demolish and cull Detroit for scrap was approved last month by a 6-3 City Council vote after a cost-benefit analysis revealed that, as a functioning urban area, it held a negative cash value.

According to scrap dealers, Detroit is an aging city in fair-to-poor condition, with "substantial wear and tear." It also bears the marks of extensive fire and rust damage, and it may not comply with current U.S. safety and emissions standards.

"There's little interest in the Detroit collectibles market right now, because virtually none of it is in mint condition," independent actuary and appraiser Arnold Cortier said. "The library, for example, is almost a hundred years old. If they're lucky, they'll cull some lead or pig iron."

Even structures in reasonably good condition will be scrapped, including the landmark Guardian Building. A last-minute attempt to spare it fell through late Monday when historical preservationists failed to put together the funds to tow the skyscraper out of town.

Other cities, such as New York, Chicago, and Los Angeles, did not bid, explaining that they already had too many historic Art Deco buildings of their own.

Scrap processors and brokers called the auction a "win-win" situation.

"Detroiters can finally say goodbye to an eyesore that's blighted them for generations," said Al Ranneke, an Allegheny, PA scrap peddler who offered cash for hundreds of tons of the city's many metal parts. "No more getting nickel-and-dimed to death on little repairs, no more kids cutting themselves on jagged, rusted corners, and it all gets hauled off at no charge."

Ranneke acquired several Detroit commercial districts and the steel-and-glass 1970s-era Renaissance Center for $4,000.

"I did them a favor," Ranneke said. "Believe me, Detroit's been around the block. I was willing to take it off their hands for six grand, but I caught a glimpse of that Ambassador Bridge and I said 'no way.' I am not Santa Claus."

Another company, Bayonne, NJ's A-1 Salvage, purchased the recently vacated Tiger Stadium for approximately $.17 a ton. A spokesman for the firm said that the People's Republic of China had expressed interest in purchasing the dismantled sports venue. China is the world's largest buyer of scrap metal, and could receive up to 80 percent of the city.

The city's pending shutdown will make thousands of items with no scrap value, and several train-cars full of law enforcement equipment such as handguns, battering rams, and police clubs and riot suits, available to other buyers.

Residents whose homes and businesses are scheduled to be razed will be offered jobs in demolition and debris clearance to compensate for lost income. It is expected that the approximately 7.6 percent of the population that is currently unemployed will be able to start immediately.

The official demolition of Detroit's remaining structures will begin April 17.

ASIDE FROM THE FACT THAT KWAME KILPATRICK HASN'T BEEN MAYOR FOR MONTHS AND JUST GOT OUT OF PRISON...

[Tansy_Gold]

55. Usually items from that source are amusing

This was. . . . . not

:hug:

[Demeter]

60. Yeah, I Know, but Its My Mother City. It Needs All The Attention It Can Get

and that deterioration started in the 1967 riots and little or nothing has been done since. That's 42 years of decay. If Detroit were anywhere else, the sand dunes would have moved in and buried it.

[tclambert]

116. Tiger Stadium has been torn down.

And now that Shrek (Ken Cockrel) is mayor, there is an open seat on City Council, leaving only eight. So a 6-3 vote means someone voted twice (probably Monica Conyers).

[Festivito]

18. Debt: 03/25/2009 11,037,916,881,157.83 (DOWN 9,011,375,852.37) (Moslty FICA.)

(Very small public debt move. Mostly the FICA part took a quick drop. Time to get those monthly SS checks out.)

= Held by the Public + Intragovernmental(FICA)
= 6,746,924,596,902.85 + 4,290,992,284,254.98
UP 59,898,960.86 + DOWN 9,071,274,813.23

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: $9.8, ABOUT TEN BUCKS for a 1B$ 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 306,041,915 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,066.68.
A family of three owes $108,200.05. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 9,543,697,620.51.
The average for the last 30 days would be 6,680,588,334.36.
The average for the last 28 days would be 7,157,773,215.38.
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$/day.
There were 45 reports in 64 days of Obama's part of FY2009 averaging 0.41B$ per report, 0.38B$/day so far.
There were 120 reports in 176 days of FY2009 averaging 8.44B$ per report, 5.76B$/day.

PROJECTION:
There are 1,397 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 21.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/25/2009 11,037,916,881,157.83 BHO (UP 411,039,832,244.75 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: 1,013,191,984,245.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/05/2009 +006,943,273,604.61 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********
03/25/2009 +000,059,898,960.86 ------------*******

92,474,935,991.90 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,373,285,077,898.76 in last 188 days.
That's 1,373B$ in 188 days.
More than any year ever, including last year, and it's 135% of that highest year ever only in 188 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 188 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=3801089&mesg_id=3801122

[Festivito]

120. Debt: 03/26/2009 11,046,247,657,049.48 (UP 8,330,775,891.65) (Up a little.)

(Up an average amount.)

= Held by the Public + Intragovernmental(FICA)
= 6,754,100,383,090.75 + 4,292,147,273,958.73
UP 7,175,786,187.90 + UP 1,154,989,703.75

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: $9.8, ABOUT TEN BUCKS for a 1B$ 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 306,048,086 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,093.18.
A family of three owes $108,279.53. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 7,861,330,239.39.
The average for the last 30 days would be 5,502,931,167.57.
The average for the last 28 days would be 5,895,997,679.54.
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$/day.
There were 46 reports in 65 days of Obama's part of FY2009 averaging 0.41B$ per report, 0.39B$/day so far.
There were 121 reports in 177 days of FY2009 averaging 8.44B$ per report, 5.77B$/day.

PROJECTION:
There are 1,396 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 19.3T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/26/2009 11,046,247,657,049.48 BHO (UP 419,370,608,136.40 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: 1,021,522,760,137.00 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********
03/25/2009 +000,059,898,960.86 ------------*******
03/26/2009 +007,175,786,187.90 ------------*********

92,707,448,575.19 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,381,615,853,790.41 in last 189 days.
That's 1,382B$ in 189 days.
More than any year ever, including last year, and it's 136% of that highest year ever only in 189 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 189 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=3802924&mesg_id=3802983

[Demeter]

22. More Mug Shots: The Dirty Dozen

http://www.rollingstone.com/politics/story/26868968/the_dirty_dozen/print

Cute and nasty caricatures--includes many missed in the previous set

[Demeter]

23. Mad, bad, and dangerous to know Steve Keen

http://www.paecon.net/PAEReview/issue49/whole49.pdf

The most important thing that global financial crisis has done for economic theory is to show that neoclassical economics is not merely wrong, but dangerous.

Neoclassical economics contributed directly to this crisis by promoting a faith in the innate stability of a market economy, in a manner which in fact increased the tendency to instability of the financial system. With its false belief that all instability in the system can be traced to interventions in the market, rather than the market itself, it championed the deregulation of finance and a dramatic increase in income inequality. Its equilibrium vision of the functioning of finance markets led to the development of the very financial products that are now threatening the continued existence of capitalism itself.

Simultaneously it distracted economists from the obvious signs of an impending crisis—the asset market bubbles, and above all the rising private debt that was financing them. Paradoxically, as capitalism's “perfect storm” approached, neoclassical macroeconomists were absorbed in smug self-congratulation over their apparent success in taming inflation and the trade cycle, in what they termed “The Great Moderation”.

MUCH MORE AT LINK (PDF)

[Demeter]

24. One Small Problem With Geithner's Plan:It Will Bankrupt The Banks By Henry Blodget

http://www.businessinsider.com/henry-blodget-one-small-problem-with-geithners-plan-it-will-bankrupt-the-banks-2009-3



Mar. 25, 2009 "Business Insider" -- The big problem with Tim Geithner's plan to fix the banks is the same as it ever was: The gap between what banks say their assets are worth and what the market says they are worth.

When a bank says an asset is worth 60 cents and the market says it's worth 30 cents, someone has to cover that spread. The genius of Geithner's plan is that it pawns most of the cost (and most of the risk) off on the taxpayer without the taxpayer noticing.

But unless the taxpayer gets stuck with the entire spread, which is probably what Geithner is hoping, banks that sell assets will have to take massive writedowns. This will start the whole cycle of violence again.

This risk to the banks is particularly acute when dealing with whole loans that the banks currently say they have no plans to sell. These loans are often carried at 100 cents on the dollar, because loans classified as held to maturity don't have to be marked to market. Even subsidized buyers won't likely be willing to pay anywhere near 100 cents on the dollar for these loans. So, here, the writedowns could potentially be huge.

And then there's another problem:

If the banks go through the exercise of putting assets up for sale only to have the bids come in at, say, 40 cents instead of the 60 cents on the books, the banks' accountants and/or federal regulators might notice. So even if the banks recoil in horror and refuse to sell at 40 cents, someone somewhere might insist that assets now carried at 60 cents be written down to 40 cents (after all, they won't have the "temporary illiquidity discount" excuse anymore, will they?). This will blow another huge hole in the banks' balance sheets.

Given this, banks would probably be wise not to participate in Geithner's plan. Which is why the government is already talking about forcing them to:

FT: “The unspoken fear here is that selling off loan portfolios would lead to more government capital injections into major banks,” said an executive at a large bank...

Richard Bove, an analyst at Rochdale Research, wrote in a note to clients: “ will not happen because it would destroy bank capital. It might cause a bank to fail the new stress tests under way. Banks will not take this risk.”

But while banks in theory have discretion over whether to sell loans, Sheila Bair, chairman of the Federal Deposit Insurance Corporation, said this decision would be made “in consultation with regulators” – a sign that the authorities might put pressure on banks to sell toxic assets.

It's time to face the fact that we have already de facto nationalized the big banks--and that the way we've done it is worse than standard receivership and restructuring. The longer we remain in denial about this, the worse off we'll be. But that's another story...

[Demeter]

26. Geithner Plan Will Rob US Taxpayers

http://www.cnbc.com/id/29848741

March 24, 2009 "Reuters" -- The U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.

"The Geithner plan is very badly flawed," Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.

U.S. Treasury Secretary Timothy Geithner's plan to wipe up to US$1 trillion in bad debt off banks' balance sheets, unveiled on Monday, offered "perverse incentives", Stiglitz said.

The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.

"Quite frankly, this amounts to robbery of the American people. I don't think it's going to work because I think there'll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer."

Even if the plan clears banks of massive toxic debt, worries about the economic outlook mean banks could still be unwilling to make fresh loans, while the prospect of a higher tax burden to pay for various government stimulus plans could further undermine U.S. consumers, he said.

Some Republican lawmakers have also expressed concern over the incentives offered by the government, which could end up providing private investors with more than 90 percent of the funds to buy the troubled assets.

But President Barack Obama has said the plan was critical to a U.S. economic recovery, Stiglitz, a professor at New York's Columbia University and a former World Bank chief economist, also urged G20 leaders at their London summit next month to commit to providing greater resources to developing countries and said China should be given bigger voting rights in the International Monetary Fund.

"The voices of developing countries, and countries like China that will provide a lot of the money, are not heard."

Spring Real Estate Guide 2009 | A CNBC Special Report

China would be hard pushed to reach its targeted 8 percent economic growth this year, but the important thing was that at least the Chinese economy was still growing, he said.

Stiglitz welcomed China's proposal on Monday for an overhaul of the world monetary system in which Zhou Xiaochuan, governor of the People's Bank of China, said the IMF's Special Drawing Right has the potential to become a super-sovereign reserve currency.

Stiglitz has long called for the U.S. dollar to be replaced as the only reserve currency.

Basing a reserve system on a single currency whose strength depends on confidence its own economy is not a good basis for a global system, he says.

"We may be at the beginning of a loss of confidence (in the U.S. dollar reserve system)," he said. "I think there is support for some sort of global reserve system.

[Demeter]

27. Geithner Update:Bend Over and Say, "Uncle Sam" By Mike Whitney

http://informationclearinghouse.info/article22289.htm


March 24, 2009 "Information Clearing House" -- -- Timothy Geithner refuses to take underwater banks into receivership and resolve them, but has no problem transforming the FDIC into a hedge fund. Go figure? Here's what everyone needs to know: The US government (you) will provide up to 94 percent of the financing (low interest, of course) for dodgy mortgage-backed assets that no one in their right mind would ever buy so that wealthy and politically-connected banksters can scrub up to $1 trillion of red ink from their balance sheets. Ugh!

The so-called "private partners" in this confidence scam, will get non recourse loans, which means that if the plan backfires and they lose their skimpy 6 percent investment they can call it quits and leave the taxpayer holding the bag. ($1 trillion in potential losses!) Here's how Paul Krugman sums it up:

"The Geithner scheme would offer a one-way bet: if asset values go up, the investors profit, but if they go down, the investors can walk away from their debt. This isn't really about letting markets work. It's just an indirect, disguised way to subsidize purchases of bad assets."

"Markets"? Who said anything about markets? This is corporate welfare, pure and simple.

Also, the partnerships will be conducted through off-balance sheets operations, (Enron-type structured investment vehicles or SIVs), so the parent company (our new business partners) can avoid liability when they dump all types of ineligible, unmarketable, toxic garbage into the program, which they will since the average banker has moral scruples of Hannibal Lector.

The opportunities for fraud in Geithner's "public-private" Banker's Bonanza are truly breathtaking. All the bank has to do is shovel its mountainous pile of B-grade dog-dung into its newly-minted SIV and then hide behind its government-issue "no risk" loan and claim ignorance when the FDIC tries to get its money back.

"I'm so sorry. How did that 2006 vintage subprime CDO made up of liar's loans from unemployed Pizza Hut workers get mixed up in there? My bad."


In Geithner's defense, we should point out the challenges he's facing. It's not easy pulling the wool over people's eyes, especially when they've been repeatedly fleeced. The Treasury Secretary's main job is "to keep the big banks in private hands" and to remove over a trillion dollars of toxic mortgage-backed assets that are worth only a fraction of their original value. According to economist Dean Baker, these junk assets are worth roughly 30 cents on the dollar, although the banks have them listed on their books at 60 cents on the dollar. If the banks are unable get full price, then many of them will be forced into bankruptcy. Geithner's job is to make sure that doesn't happen, which is why he has created the "partnership" smokescreen to conceal the fact that the government is intentionally overpaying for significantly-downgraded sludge. Here's how economist James Galbraith puts it:

"The bad assets are bad because they are worth less than the banks say they are. House prices have dropped by nearly 30% nationwide. That has created something in the neighborhood of $5+ trillion of losses in residential real estate alone (off a peak market value of housing about $20+ trillion). The banks don't want to take their share of those losses because doing so will wipe them out. So they, and Geithner, are doing everything they can to pawn the losses off on the taxpayer."

Galbraith (indirectly) explains why Geithner has avoided "price discovery" at all cost. Think about it for a minute: We are now 19 months into the biggest economic catastrophe since the Great Depression and STILL the public has no fixed idea of what these rotten assets are really worth. Why? The business media, the government and big finance have engineered the biggest cover up in memory in order to protect the interests of privately-owned financial institutions. Is that how a free market is supposed to work?

The question that should be on everyone's mind is this: Why would Geithner create a program that rewards bankers and hedge funds at the expense of the public? Or to be more specific: What manner of man would conjure up a transaction where taxpayers put up 94 percent of the investment but only stand to get 50 percent of the profits?

Who is Geithner working for anyway?

There's no way around the fact that Geithner is a financial industry representative planted in the White House to do Wall Street's bidding. Institutional bias precludes him from doing his job and operating in the public interest. Thus, the first step in any financial rescue plan must be to remove Geithner, Summers and all the other parasitic Rubin-clones that have infected the present administration and bring in a whole new team. That will prepare the ground for nationalizing the banks and providing debt-relief to the people who need it most, the victims of Wall Street's Ponzi-credit bubble.

[Demeter]

30. Part II: Geithner, Obama Kowtowing to "Massively Corrupted" Banks, Galbraith Says

http://finance.yahoo.com/tech-ticker/article/216480/Part-II-Geithner-Obama-Kowtowing-to-%22Massively-Corrupted%22-Banks-Galbraith-Says?tickers=XLF,FAS,SKF,C,BAC,JPM,^DJI

Like it or not, many people seem to be resigned to the idea there's no alternative to the public-private investment fund scheme Treasury Secretary Geithner detailed this morning. (Click here for part one of our discussion of the plan.)

That's hogwash, says University of Texas professor James Galbraith, author of The Predator State. Of course there's an alternative: FDIC receivership of insolvent banks.

Aside from being legally proscribed, the upside of FDIC receivership is the banks are restructured and reorganized for potential sale (either in whole or parts), Galbraith says. Such was the fate in 2008 of, most notably, Washington Mutual and IndyMac.

Crucially, FDIC receivership also means new management teams for insolvent banks; and Galbraith notes new leaders will have no incentive to cover up the fraudulent or predatory lending practices of their predecessors. Given the entire system was "massively corrupted by the subprime debacle," the professor believes criminal prosecutions on par with the aftermath of the S&L crisis - when hundreds of insiders went to jail - is a likely (and necessary) outcome of the current crisis.

But don't expect to see many "perp walks" if Geithner's current plan comes to fruition. That's one reason Galbraith called the plan "extremely dangerous" in part one of our interview.

So why isn't the Obama administration pushing for FDIC receivership? "Political influence of big banks," the economist says.

[Demeter]

31. Judgment Day for Geithner By Mike Whitney

http://informationclearinghouse.info/article22279.htm

March 23, 2009 "Information Clearing House" --- Whether he deserves it or not, Timothy Geithner has become the poster boy for everything that's wrong with the government's scatterbrain financial rescue plan. Geithner was in the wheelhouse at the New York Fed when Bear Stearns and Lehman Bros defaulted, and he played a central role in the $165 million AIG bonus scandal which ignited a populist firestorm across the country. Now everything even remotely connected to the bank bailout has become a source of fist-clinching rage. The mood of the country has darkened from the steady downpour of bad economic news, the sharp decline in housing prices and the steep rise in unemployment. People are angry at the government, the banks and Wall Street. Their nerves are frayed and their patience is stretched to the limit.

It is in this atmosphere of simmering public fury that Geithner will announce the details of his long-awaited plan for removing up to $1 trillion of toxic assets from the balance sheets of some of the country's biggest banks. Information about Geithner's "Public-Private Partnership" and the so called Term Asset-Backed Securities Loan Facility (TALF) has been spotty so far, but enough is known about the plan to predict that it will likely be the noose into which Geithner thrusts his scrawny neck bringing his dismal career at Treasury to a end. The country will not endure another pretentious-sounding banker-friendly flim flam, which is precisely what Geithner has in mind.

According to the Associated Press:

"Officials said Geithner’s plan will have three major parts. One part will be an effort Geithner spoke about last month - the creation of a public-private partnership to back purchases of bad assets by private investors... Treasury will hire four or five investment management firms, matching the private money that each of the firms puts up with government funds.

A second part of the plan will expand a recently launched program being run by the Federal Reserve called the Term Asset-Backed Securities Loan Facility, or TALF.

That program is providing loans for investors to buy assets backed by consumer debt in an effort to make it easier for consumers to get auto, student and credit card loans. Under Geithner’s proposal, this program would be expanded to support investors’ purchases of banks’ toxic assets.

The third part of the Geithner plan would utilize the resources of the FDIC, the agency that guarantees bank deposits, to purchase toxic assets. Officials said that the FDIC will create special purpose investment partnerships and then lend those partnerships money so that they can buy up troubled assets." (AP)

Why in heaven's name would Shiela Bair attach her good name to Treasury's latest bunko-scam? As Bair undoubtedly knows, the main objective of the Public-Private Partnership and TALF is to provide inflated prices for garbage assets that investors refuse to buy. It's just a way of transferring losses from the banks to the taxpayer by using a middleman who looks like a partner but only has a 5 percent stake in the game. This is "tax cheat" Timmy's circuitous way of socking it to the public one more time. Here's how Yves Smith at Naked Capitalism explains it:

"First, the banks, as in normal auctions, will presumably set a reserve price equal to the value of the assets on their books. If the price does not meet the reserve (and the level of the reserve is not disclosed to the bidders), there is no sale; in this case, the bank would keep the toxic instruments.

Having the banks realize a price at least equal to the value they hold it at on their books is a boundary condition. If the banks sell the assets as a lower level, it will result in a loss, which is a direct hit to equity. The whole point of this exercise is to get rid of the bad paper without further impairing the banks."

Okay, so the auctions are rigged and the banks get overpaid for toxic waste. Surprised? Geithner's task from Day 1 has been to keep the money flowing from the vault at Treasury to the big banks. This is just more of the same. The TALF and the PPP are just clever acronyms meaning "corporate welfare" which is ladled out to bank tycoons who have their agents working the levers from the inside. The public, of course, takes it in the shorts once again.


Yves Smith puts it like this:

"Dear God, the Administration really thinks the public is full of idiots. But there are so many components to the program, and a lot of moving parts in each, they no doubt expect everyone's eyes to glaze over." (Public Private partnership emerging, Yves Smith, Naked Capitalism)


Geithner has been trying for weeks to lure hedge funds and private equity firms into participating in his program offering up to 95 percent leverage for the purchase of the banks bad assets. By providing loan guarantees rather than capital, Geithner can (in the words of the Wall Street Journal's David Wessel) "rely on the Federal Reserve's amazing ability to come up with unlimited sums without congressional consent." This means that Geithner has moved on to Plan B which makes good use of Bernanke's deep pockets and well-oiled printing press.

Geithner's strategy is nothing more than a trillion dollar stealth bailout of the country's biggest banks. The funding from the TALF and PPP are just the first part of a one-two knockout punch. Treasury will try to show that it paid less for the assets than their current book-value (which, of course, is grossly inflated) and then follow up with generous capital injections from the TARP program to make up the difference. That way, the banks will be "made whole" again while the public gets the double whammy. Geithner is hoping that the public relations hype surrounding the program will allow him to carry out his strategy before anyone figures out what's really going on. Fortunately, the blogosphere is following every little detail, which means that the plan will be picked apart just minutes after it is released. If the punditocracy gives it the "thumbs down", there's a good chance that Geithner will have to pack it in and resign. His credibility was wobbly to begin with. A failure here would surely be the last straw. Senator Richard Shelby, voiced the concerns of many elected representatives when he said on FOX News Sunday, that Geithner was on "shaky ground" and that "If he keeps going down this road, he won’t last long.” By late Monday, we should know whether Geithner will continue to serve at Treasury or hobble back to his dingy rookery at Kissinger and Associates.


According to the New York Times:

"The Federal Deposit Insurance Corporation will set up special-purpose investment partnerships and lend about 85 percent of the money that those partnerships will need to buy up troubled assets that banks want to sell.

... Private investors, then, would be contributing as little as 3 percent of the equity, and the government as much as 97 percent."


The idea that 97 percent "low interest" funding constitutes a "partnership", boggles the mind. Where can a businessman or a homeowner get gravy a deal like that? The Treasury is providing a subsidy to Wall Street crooksters to manage taxpayer money so they can fatten their own bottom line. It's that simple. Geithner's not only willing to empty the public purse for his buddies but, also, write another trillion dollar check on an account that is already overdrawn by $11 trillion. This is one gigantic looting operation concocted by bank lobbyists masquerading as public officials.


The whole purpose of the Geithner shakedown is to mislead the public. Why should the perilously underfunded FDIC provide a non-recourse loans to hedge fund sharpies and PE scalawags when its primary responsibility is to protect bank depositors? And why are they setting up more of the same Enron-type "off-balance sheets" special purpose vehicles which blew up the financial markets to begin with? This has disaster written all over it. The non recourse loans create a "no lose" situation for investors who can dump any type of crappy mortgage-backed sludge into the program and not worry about any legal backlash. Here's how Paul Krugman sums it up on Saturday's blog:

"The Geithner plan has now been leaked in detail. It’s exactly the plan that was widely analyzed — and found wanting — a couple of weeks ago. The zombie ideas have won.

The Obama administration is now completely wedded to the idea that there’s nothing fundamentally wrong with the financial system — that what we’re facing is the equivalent of a run on an essentially sound bank. As Tim Duy put it, there are no bad assets, only misunderstood assets. And if we get investors to understand that toxic waste is really, truly worth much more than anyone is willing to pay for it, all our problems will be solved.

To this end the plan proposes to create funds in which private investors put in a small amount of their own money, and in return get large, non-recourse loans from the taxpayer, with which to buy bad — I mean misunderstood — assets. This is supposed to lead to fair prices because the funds will engage in competitive bidding....

This plan will produce big gains for banks that didn’t actually need any help; it will, however, do little to reassure the public about banks that are seriously undercapitalized. And I fear that when the plan fails, as it almost surely will, the administration will have shot its bolt: it won’t be able to come back to Congress for a plan that might actually work." (Paul Krugman's blog)

Geithner's plan is a catastrophe. It's just a sloppy remake of Paulson's failed Super SIV that was supposed to save Citi from massive losses but closed without a single sale. Not one investor stepped forward to buy assets even though Paulson slapped the Treasury's seal of approval on entire operation. It was a complete bust. Now Geithner is following in the ex-Treasury Secretary's footsteps.

The banks are not going to fix themselves. Only government can do that, which means that someone will have to fill the leadership void and do the heavy lifting. But time is running out and the problems are getting worse. Public support is on the wane. Obama should take advantage of what little confidence in the system is left and take radical corrective action. Insolvent financial institutions have to be taken into receivership and liquidated. Shareholders and bondholders will have to take a haircut. And Geithner, Summers and the rest of the White House banking fraternity will have to resign or be fired. Obama should mull over Albert Einstein's sage advice when he said, "The problems we face today cannot be solved by the minds that created them."

[Demeter]

33. Bank Stocks Could Still Go To $0

http://www.businessinsider.com/why-bank-stocks-could-still-go-to-0-2009-3

Tim Geithner says his new bailout scheme carries "risk", but he doesn't really define what that means, in terms of downside to the taxpayer. Meanwhile, guys like Nouriel Roubini still think that with all the capital that will be plowed towards banks, it still won't be enough to stave off nationalization.

A brief research report from Aquatoid Corp. argues that the bailout won't be enough, and that there's still a yawning gap between how much the banks actually need to fill in their balance sheets, and how much they're likely to receive. The upshot: Many banks, as Roubini says, will still go to $0 and the US taxpayer will be left holding the bag.

[dixiegrrrrl]

107. "hobble back to his dingy rookery at Kissinger and Associates."

OUCH !!!!

That's some writing, there

[Demeter]

123. Some People Get Drunk on Words

(I am guiltier than most)

[BelgianMadCow]

44. Could Galbraith, Krugman, Stiglitz and so on PLEASE

try and find a pulpit in order to SCREAM the truth into the public's ear?

I think most people tune out when the newest plan is layed out - but the terms in which these heavyweights speak are surely understandable. Is any of that getting out in prime time, or is it just print and specialized channels?

I remain flabbergasted - and over here it's hardly better. However, you can already see trial balloons - the ballooning deficit in belgium is caused for 50% by the bank bailout, and you get to read "we may have to evaluate on which government spending we have to cut" - and then we are talking our hard-fought social security.

When these systems DO get touched, people will wake up. And combining the current crisis with baby boomer's retirement in the following years...oO

If we would get to choose between our social security, our pensions and the bank bailout, I know what would go first. Unfortunately, without much ado, the money has been spent. Buh-bye one of two other.

[Demeter]

64. The Papers Are Going Out of Print

There is no pulpit left but the Internet. And while too many of the "elites" poo-poo the Internet, they seem to be frantically looking for a way to shut it down or price it out of existence or at least "bug" it for "security" purposes....the only reason China has any control is because Google and company GAVE them control in return for limited access to the Chinese people. That wouldn't fly here, and they are smart enough to know it. But AT&T and Verison are more than happy to give away our security and privacy for the "security" of George Bush.

No one wants to know. Because then they would have to do something. And they all thought that by coming out for Obama in such numbers that the election couldn't be stolen was doing something....

and it would be doing something, if we saw a difference. Oh, there's the window-dressing: EPA stopping mountain-top blowing, lifting the gag rule in world health aid, supporting gay rights in the UN, and the like.

But when it comes to the meat and potatoes of our economy, our inequities, our health care--we are getting stiffed yet again.

UNEMPLOYED OF THE WORLD, UNITE! YOU HAVE NOTHING TO LOSE BUT YOUR CAPITALIST ELITE!

[antigop]

65. Those who are still employed need to unite as well --imo. n/t

[BelgianMadCow]

71. From a distance, Obama

has restored dignity all right - Guantanamo for starters. The lack of intention to prosecute however...may enable the next generation of crooks just like the Cheney cabal resurfaced .

His stimulus plan and the focal points therein I liked as well - several parts rather progressive. The semi-silent continuation of treasury robbery programs however...is already an ORDER OF MAGNITUDE bigger.

To be honest, I never had much hope for a system-upsetting presidency - it's simply not allowed by the all too powerful lobbies and their sycophants in both parties. Allowing company contributions is a terrible start for an election imho.

It's a pity really Obama hasn't used the what I'd think is overwhelming public support to clean up the mess. He does talk the talk, I keep hoping for walk...

It's the same everywhere - the haute finance has terrible political influence. We had our share of "Lehmann weekends" :puke:

So I say YES to your rallying cry - but we workers (or aspiring) are very fragmented. On this very board I've seen quite some nationalistic / protectionist cries that offended me...even if I do understand the sentiment. There is no power equal to the Corporate one - not on government level and not in any kind of union either. The antigloablistic movement is the only thing that springs to mind. Think about it, the 20 RICHEST countries are gonna decide on our fate - how is THAT democratic?

[AnneD]

78. Morning Marketeers.....

:donut: and Lurkers. You are so right Demeter, how many days are we into this presidency and what do we have to show for it? Billions more in debt and growing numbers of unemployed, a few nice laws perhaps.....But the middle class that put him into office are still sucking bilge water. I talked to a waitress at a little mom and pop place I eat at. She was unemployed 8 months before she got that part-time job. She says folks that she talks to and herself included are now working twice as long for half as much and they consider themselves lucky because they have a job. She says she was grateful to have never lost her apt but did lose the electricity for a while. She said it has been over a year that she has never been able to catch up on anything and she is just tired down to her soul. All I could think about was how lucky hubby and I are. So far we have done the right moves. Hope we can hang in there a while longer.

Happy hunting and watch out for the bears.

[Demeter]

35. Stolen from Robbien: Stimulus, bailout will lead to more fraud: FBI

Source: Reuters

WASHINGTON (Reuters) - The FBI is bracing for a wave of fraud and corruption cases stemming from the government's multitrillion-dollar effort to get the economy moving again, the agency's chief told Congress on Wednesday.

The expected surge in economic crimes will place further strain on an agency already stretched thin as it investigates mortgage fraud, terrorism and corrupt politicians, FBI Director Robert Mueller said. "Our expectation is that economic crimes will continue to skyrocket," Mueller said.

After the September 11, 2001 hijacking attacks, the FBI moved more than 2,000 investigators out of its criminal division to place greater emphasis on national security.

But that reduced the agency's ability to cope with a subsequent explosion in corruption, fraud and gang-related cases, Mueller said.

. . .

Mueller noted that the FBI had more than 1,000 agents to cope with the last financial crisis, the savings-and-loan debacle of the late 1980s and early 1990s, roughly double the number it has now for economic crimes.

The agency has stepped up its recruiting efforts this year, Muller said, but was set back when the House of Representatives cut out a provision of the stimulus package that would have paid for 165 new FBI agents.

Read more: http://www.reuters.com/article/domesticNews/idUSTRE52O5...



Less than half the number of corruption agents today than we had in the 1990s.

Not surprising at all.

[BelgianMadCow]

50. along the same line: setting up ONE (yes, one) guy in London to oversee

AIG there, knowing the 400-man department creating the mess was based there.

I think he may have been in over his head. :sarcasm:

This out of the eye-popping Rolling Stone article:
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=389&topic_id=5293954

[antigop]

89. TPM: Did Cassano shut out AIG risk officers?

http://tpmmuckraker.talkingpointsmemo.com/2009/03/did_cassano_shut_out_aig_risk_officers.php?ref=fp2

Did AIG's entire risk management team fall down on the job? Or, like the firm's auditors, were they prevented from doing it?

Yesterday we told you about Bob Lewis, AIG's chief risk officer, who still has his job despite a rather obvious failure to ensure that the firm wasn't taking on an unmanageable level of risk.

But it looks like it's not just Lewis. The Wall Street Journal reports that several longtime members of AIG's Credit Risk Committee are also still in place. That committee, says the paper, was in charge of overseeing those disastrous credit default swaps.

Does anyone else find that photo of Cassano kind of creepy? It's like he's lurking around a corner or something.

[BelgianMadCow]

90. Yep Cassano (patient zero of the crash as Rolling Stone had it) looks the part

and the risk dept being shut out fits nicely with the attitude "You guys do your job, I'll set up the investment portfolio and you give me free reign., also from the article.

And yeah the Office of Thrift Supervision :crazy:

[UpInArms]

51. dollar watch

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

Last trade 84.950 Change +0.830 (+1.07%)

Pound Drops As GDP Figures Show Deepening Recession, Euro Follows Suit

http://www.dailyfx.com/story/topheadline/Pound_Drops_As_GDP_Figures_1238149548880.html

The Pound dropped over 100 pips following the final U.K. 4Q GDP figures being revised lower to -1.6% from -1.5% - the lowest quarterly reading since 1980. Weak household spending which fell 1.0% and a 3.9% drop in exports left the economy without any sources of growth. The GBP/USD would drop 300 pips during overnight trading sending it below 1.4300, further weakness could lead the pair to threaten the 50-Day SMA at 1.4266 where we may see it find support.

Although the growth numbers are backward looking, they show the depth of the current contraction and the level of recovery that is needed for the U.K. economy. The BoE may need to take additional quantitative easing measures in order to spur the level of lending needed to fuel future growth. However, the prices of Gilts have sunk so low that they have removed the incentive for investors to sell them back to the government which may hinder their plans to infuse liquidity to the market and delay any potential rebound. Yet, BoE member Spencer Dale appears optimistic as he stated that "As we go through 2009, I believe that it is most likely the pace at which output is contracting will ease and that we will see some signs of recovery by around the turn of this year," in a speech.

The Euro would reach as high as 1.3594 overnight as it was still finding support from improving risk appetite, but weak fundamental data would derail its momentum sending it lower by 140 pips. French GDP figure showed that the economy contracted by 1.1% in the 4Q which was the most in more than three decades. Meanwhile, German import prices fell by 0.5% bringing the annualized rate to -5.4% which was the lowest in nearly 10 years. Despite their dismal reading both gauges were better than estimates but that didn’t deter Euro bears. The dour U.K. growth figures helped accelerate the decline as the Euro would fall below 1.3400. There is increasing speculation that the ECB will join the party and announce additional measures to help loosen credit markets which may include another rate reduction and more off balance sheet efforts, which may continue to be a weighing factor for the single currency.

The dollar has started to regain its footing after seeing weakness during Asian trading and may continue to find support as risk appetite thins. Indeed, European equity markets seem less than inspired and U.S. futures are pointing toward a lower open. The economic calendar will present event risk in the form of personal income and spending which are projected to cross the wires at -0.1% and 0.2% respectively. Compared to last month’s readings of 0.4% and 0.6%, the declines in February may dim the outlook for future domestic growth and add lead to dollar strength. However, the Nasdaq trading back into positive territory for the first time this year could be a catalyst for further equity gains which could put the dollar back on its heels.

...more...

Swiss Leading Indicator Falls to Record Low, Highlighting a Deepening Economic Contraction

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/Swiss_Leading_Indicator_Falls_to_1238152802350.html



CHFUSD – The KOF leading indicator for Switzerland plunged to -1.79 in March, which is the lowest level since the series began in 1991, while the reading for February was revised slightly higher to -1.37 from an initial reading of -1.41. The data continues to highlight a weakening outlook for the Swiss economy as growth prospects deteriorate at a record pace, and conditions are likely to get worse over the year as trade conditions falter. The Swiss National Bank has slashed its interest rate close to near zero, purchased corporate bonds and intervened in currency markets in a bid to stem the risks for deflation however, as the export-driven economy faces its worst recession in over a quarter century, the outlook for growth and inflation remains bleak.

EURUSD – Industrial new orders in the Euro-Zone dropped for the sixth straigh month in January as the index dropped to 3.4% from a revised reading of 8.0% in the previous month. As result, the annualized rate slipped to -34.1%, which is the largest decline since the record began in 1994, and conditions are likely to get worse as the economic downturn in the global economy intensifes. Meanwhile, ECB Nowotny noted that there are deflationary tendencies world wide, and said that there will be price drops in some European countries over the coming months, which would put further pressure on the ECB to lower the benchmark interest rate in next week as they maintain their one and only mandate to ensure price stabilty.

GBPUSD – The final 4Q GDP reading for the U.K. was unexpectedly revised down to -1.6% from -1.5% in the preliminary release, which marked the largest decline since 1980, while the annual rate of growth was revised to -2.0% from -1.9%. The breakdown of the report showed consumer spending was slipped to -1.0% from an initial reading of -0.7%, which is the largest decline in at least 13 years, while government spending grew 1.3% compared to 1.5% in the preliminary report, and economic conditions in the region are likely to deteriorate further as consumers continue to face falling home prices paired a weakening labor market. Furthermore, the U.K. 4Q current account deficit narrowed to GBP 7.6B and the 3Q deficit was revised down to GBP 8.2B from an initial reading of 11.0B. Meanwhile, BoE's Dale noted that economic conditions may start to improve in late 2009, but said that the risks for the economy remains decisively to the downside, and stated that more policy action may be needed as Europe’s second largest economy faces a deepening recession. In addition, BoE's Governor King warned against rising public deficits, while the central bank dove, David Balnchflower, urged the government to put further fiscal stimulus in place as growth and inflation falter.

...more...

[Ghost Dog]

67. Euro in biggest one-day loss vs dollar in 2 months

Fri Mar 27, 2009 10:57am EDT NEW YORK, March 27 (Reuters) - The euro suffered its biggest one-day loss against the dollar in more than two months on Friday after Germany's finance minister said fiscal irresponsibility in Europe could put the currency at risk,

The comments by Peer Steinbrueck, weaker-than-forecast euro zone industrial orders and German inflation data triggered pre-placed euro sell orders, traders said.

...

The dollar's broad gains were bolstered by comments from a senior official at Japan's Ministry of Finance and a senior Russian central bank official that the dollar will remain the world's reserve currency for some time.

The yen rallied on last-minute fund repatriation by Japanese investors ahead of fiscal year end and expectations for further flows to Japan due to a change in tax regulation.

/... http://www.reuters.com/article/marketsNews/idINN27183220090327?rpc=44

[antigop]

56. Oh, crap! WSJ article today; 'Stable' Funds in Your 401(k) May Not Be

http://online.wsj.com/article/SB123802645178842781.html

Investors are pouring billions into stable-value funds -- just as these popular retirement-plan investments are looking less stable than usual.

Stable-value funds, available only in 401(k)s and other tax-deferred savings plans, are designed to preserve capital and generate smooth, positive returns -- hence the name. Consider that last year, the average stable-value fund returned 4.7%, according to Hueler Cos., a firm that tracks the industry, compared to a 33.8% plunge in the Dow Jones Industrial Average.

But now, stable-value funds are getting rattled by some of the same forces that have upended the broader financial system. These funds typically maintain a relatively steady "crediting rate" -- essentially the yield investors receive -- by investing in diversified bond portfolios and then using contracts from banks and insurers to protect against sharp market swings.

In many funds, though, the crediting rate has dropped sharply in recent months because of lower returns on underlying bond holdings and market conditions that are prompting stable-value managers to put more money into cash. For example, the crediting rate dropped to 3.25% in late January from 5.15% in the roughly $750 million stable-value fund in the San Francisco Employees' Retirement System's deferred-compensation plan.

At the same time, many banks and insurance companies are growing reluctant to provide the "wrap" contracts that help smooth the funds' returns, leaving some stable-value managers scrambling to find alternatives. And in certain cases where bankruptcies or massive layoffs have caused investors to yank money from a stable-value fund, some of them have been forced to wait months for their money.

[antigop]

57. And I think this is one of the reasons why they would not let AIG fail

From the above article:

Fed Chairman Ben Bernanke also has an eye on the stability of the funds. In Congressional testimony Tuesday outlining reasons why insurance giant American International Group Inc.'s failure would have posed "unacceptable risks" to the financial system, he said, "Workers whose 401(k) plans had purchased $40 billion of insurance from AIG against the risk that their stable value funds would decline in value would have seen that insurance disappear."

If workers saw their 401(k) stable value funds decline in value, confidence in the financial system would erode even more. Workers have seen their 401(k)'s decline enough the way it is. As the article mentions, workers have moved huge amounts into stable value funds. If the stable value funds declined, there would be even more outrage.

I really think this is one of the reasons they wouldn't let AIG fail.

[DemReadingDU]

61. I think you're right

But how much longer can they prop up AIG?

[antigop]

63. I don't know--I was wondering the same thing. n/t

[Tansy_Gold]

92. "They" aren't; "we" are

This makes my head hurt. Our money is propping up our own savings/pensions/investments????? And the rich are still skimming 80% off the top?

:wtf:

[DemReadingDU]

58. Mike Larson: What if Treasury Held an Auction and No One Showed Up?

3/27/09 What if Treasury Held an Auction and No One Showed Up? by Mike Larson

The U.K. Treasury held a bond auction on Wednesday morning. On the offer were 1.75 billion pounds ($2.55 billion ) worth of 40-year “Gilts” — the U.K. equivalent of U.S. Treasuries. There was just one problem …

Buyers went on strike! They offered to purchase just 1.63 billion pounds ($2.37 billion) of debt.

That was the first “failed” auction of traditional debt in the U.K going all the way back to 1995. And the market’s reaction was both swift and severe: Gilt prices plunged and interest rates surged.

Why should you care?

Well …

Like the U.S., the U.K. is bailing out its major financial institutions. It nationalized mortgage lender Northern Rock, bailed out Royal Bank of Scotland to the tune of $38.6 billion, and agreed to take as much as a 75 percent stake in Lloyds Banking Group.

Like the U.S., the U.K. is running huge deficits. It has racked up a record 75.2 billion pounds ($109.2 billion) in red ink in the first 11 months of the current fiscal year … more than triple the year-earlier 23 billion pounds ($33.4 billion). This puts the U.K. deficit on track to hit a whopping 11 percent of gross domestic product by 2010.

Like the U.S., the U.K. is borrowing gigantic sums of money as a result. The government wants to sell a record 146 billion pounds ($212 billion) worth of debt in the current fiscal year. That should drive the U.K.’s national debt to a record 1 trillion pounds ($1.45 trillion).

Like the U.S., the U.K. is engaging in a policy of “quantitative easing.” The Bank of England recently announced plans to print money and buy as much as 75 billion pounds ($108.9 billion) of corporate and government bonds.

In other words, the U.K. and the U.S. are doing many of the same things … making many of the same policy mistakes … and relying on the kindness of strangers to fund the biggest deficits of all time. Will the day soon come when the U.S. Treasury holds an auction, and no one shows up?

Bank on it!

more...
http://www.moneyandmarkets.com/what-if-treasury-held-an-auction-and-no-one-showed-up-32888

[Demeter]

66. Well, I We All do It, It Can't Be Wrong, Can It?

:sarcasm:

[radfringe]

70. Attorney General Andrew M. Cuomo - widening his investigation

Attorney General Andrew M. Cuomo of New York said Thursday afternoon that he was widening his investigation of the American International Group to examine whether its trading counterparties improperly received billions of dollars in government money from the troubled insurer.

Those counterparties include Goldman Sachs, which received $12.9 billion, as well as Société Générale of France and Deutsche Bank of Germany, which each received nearly $12 billion.

“Our investigation into corporate bonuses has led us to an investigation of the credit default swap contracts at A.I.G.,” Mr. Cuomo said in a statement. “CDS contracts were at the heart of A.I.G.’s meltdown.

The question is whether the contracts are being wound down properly and efficiently or whether they have become a vehicle for funneling billions in taxpayers dollars to capitalize banks all over the world.”


http://dealbook.blogs.nytimes.com/2009/03/26/cuomo-widens-his-aig-investigation/?hp

[Demeter]

88. Is It Clawback Time?

This could be worth some popcorn :popcorn:

[specimenfred1984]

77. Midday comments with revisions by me in parens:

http://finance.yahoo.com/news/Investors-cash-in-some-gains-apf-14767664.html

Investors (Speculators) cash in some (gambling) gains from big (Fraud) rally

NEW YORK (AP) -- Stocks fell Friday as investors (speculators) cashed in some of the (rigged) market's recent big gains, but the Dow Jones industrials remained on track to have their best month in nearly seven years (if you like to lie about numbers).

Technology stocks led the decline as did energy shares, which fell along with the price of oil.

A dip in personal incomes (amazing that the fraudulent numbers actually showed this) and a slowdown in personal spending gave investors (gamblers) little reason to extend the market's rally, which has sent the (hedge fund manipulated) Dow surging 21 percent over just 13 days.

Major market indicators were down about 1.5 percent in early afternoon trading, but that was little cause for worry among (sellout whore ) analysts given the powerful (bullshit) climb the market has seen this month.

Peter Cardillo, chief market economist at the brokerage house Avalon Partners Inc., (and completely sold out and brainwashed whore) said that even a serious decline on Friday wouldn't shake his faith in the market's stability (proving his inability to reason).

"Even if we were to drop 3 or 4 percent, it wouldn't worry me," (I ignore reality) Cardillo said. Cardillo said he has some cash on the sidelines (illegal markets), but considers himself fully invested (just like Madoff's clients).

The market looks healthier than it has in a long time (except for the worst bear market since the great depression). Until this month, the Dow had not risen more than 20 percent from a low since the bear market began in the fall of 2007, and the market hasn't jumped that much in such a short time since 1938. What's more, the Dow is on track to post a 10 percent gain in March (a useless sucker rally propped up by a network of criminals). The last time the blue chips gained at least 10 percent in a month was in October 2002 (when the results of criminal deregulation were just beginning to occur).

[AnneD]

80. Shades of the old Pravda publication.....

I remember reading between the lines on the Russian news reports and carefully inspecting the photos to find out who was in and who was out. You never missed the May Day parade stand photos.

[DemReadingDU]

81. Charles Hugh Smith: SURVIVAL+ Chapter Three

Survival+ 3: The Art of Survival, Taoism and the Warring States (March 26, 2009)
Charles Hugh Smith

I'm not trying to be difficult, but I can't help cutting against the grain on topics like surviving the coming bad times when my experience runs counter to the standard received wisdom.

A common thread within most discussions of surviving bad times--especially really bad times--runs more or less like this: stockpile a bunch of canned/dried food and other valuable accoutrements of civilized life (generators, tools, canned goods, firearms, etc.) in a remote area far from urban centers, and then wait out the bad times, all the while protecting your stash with an array of weaponry and technology (night vision binocs, etc.)

Now while I respect and admire the goal, I must respectfully disagree with just about every assumption behind this strategy. Once again, this isn't because I enjoy being ornery (please don't check on that with my wife) but because everything in this strategy runs counter to my own experience in rural, remote settings.

You see, when I was a young teen my family lived in the mountains. To the urban sophisticates who came up as tourists, we were "hicks" (or worse), and to us they were "flatlanders" (derisive snort).

Now the first thing you have to realize is that we know the flatlanders, but they don't know us. They come up to their cabin, and since we live here year round, we soon recognize their vehicles and know about how often they come up, what they look like, if they own a boat, how many in their family, and just about everything else which can be learned by simple observation.

The second thing you have to consider is that after school and chores (remember there are lots of kids who are too young to have a legal job, and many older teens with no jobs, which are scarce), boys and girls have a lot of time on their hands. We're not taking piano lessons and all that urban busywork. And while there are plenty of pudgy kids spending all afternoon or summer in front of the TV or videogame console, not every kid is like that.

So we're out riding around. On a scooter or motorcycle if we have one, (and if there's gasoline, of course), but if not then on bicycles, or we're hoofing it. Since we have time, and we're wandering all over this valley or mountain or plain, one way or another, then somebody will spot that trail of dust rising behind your pickup when you go to your remote hideaway. Or we'll run across the new road or driveway you cut, and wander up to see what's going on. Not when you're around, of course, but after you've gone back down to wherever you live. There's plenty of time; since you picked a remote spot, nobody's around.

Your hideaway isn't remote to us; this is our valley, mountain, desert, etc., all 20 miles of it, or what have you. We've hiked around all the peaks, because there's no reason not to and we have a lot of energy. Fences and gates are no big deal, (if you triple-padlock your gate, then we'll just climb over it) and any dirt road, no matter how rough, is just an open invitation to see what's up there. Remember, if you can drive to your hideaway, so can we. Even a small pickup truck can easily drive right through most gates (don't ask how, but I can assure you this is true). If nobody's around, we have all the time in the world to lift up or snip your barbed wire and sneak into your haven. Its remoteness makes it easy for us to poke around and explore without fear of being seen.

What flatlanders think of as remote, we think of as home. If you packed in everything on your back, and there was no road, then you'd have a very small hideaway--more a tent than a cabin. You'd think it was safely hidden, but we'd eventually find it anyway, because we wander all over this area, maybe hunting rabbits, or climbing rocks, or doing a little fishing if there are any creeks or lakes in the area. Or we'd spot the wisp of smoke rising from your fire one crisp morning, or hear your generator, and wonder who's up there. We don't need much of a reason to walk miles over rough country, or ride miles on our bikes.

When we were 13, my buddy J.E. and I tied sleeping bags and a few provisions on our bikes--mine was a crappy old 3-speed, his a Schwinn 10-speed--and rode off into the next valley over bone-jarring dirt roads. We didn't have fancy bikes with shocks, and we certainly didn't have camp chairs, radios, big ice chests and all the other stuff people think is necessary to go camping; we had some matches, cans of beans and apple sauce and some smashed bread. (It didn't start out smashed, but the roads were rough. Note: if you ever suffer from constipation, I recommend beans and applesauce.)

We camped where others had camped before us, not in a campground but just off the road in a pretty little meadow with a ring of fire-blackened rocks and a flat spot among the pine needles. We didn't have a tent, or air mattress, or any of those luxuries; but we had the smashed bread and the beans, and we made a little fire and ate and then went to sleep under the stars glittering in the dark sky.

There were a few bears in the area, but we weren't afraid; we didn't need a gun to feel safe. We weren't dumb enough to sleep with our food; if some bear wandered by and wanted the smashed bread, he could take it without bothering us. The only animal that could bother us was the human kind, and since few people walk 10 or more miles over rough ground in the heat and dust, then we'd hear their truck or motorbike approaching long before they ever spotted us.

We explored old mines and anything else we spotted, and then we rode home, a long loop over rutted, dusty roads. In summer, we took countless hikes over the mountainous wilderness behind his family cabin.

All of which is to say that the locals will know where your hideaway is because they have lots of time to poke around. Any road, no matter how rough, might as well be lit with neon lights which read, "Come on up and check this out!" If a teen doesn't spot your road, then somebody will: a county or utility employee out doing his/her job, a hunter, somebody. As I said, the only slim chance you have of being undetected is if you hump every item in your stash on your pack through trailess, roadless wilderness. But if you ever start a fire, or make much noise, then you're sending a beacon somebody will eventually notice.

The Taoists developed their philosophy during an extended era of turmoil known as the Warring States period of Chinese history.

Continue reading Chapter Three...
http://www.oftwominds.com/blogmar09/survival3-03-09.html


link backwards to previous chapters
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3799186&mesg_id=3799248

[DemReadingDU]

82. Charles Hugh Smith: SURVIVAL+ Chapter Four

Survival+ 4: The Remnant, the Pareto Principle and You (March 27, 2009)
Charles Hugh Smith

"Ah," the Lord said, "you do not get the point. There is a Remnant there that you know nothing about. They are obscure, unorganized, inarticulate, each one rubbing along as best he can. They need to be encouraged and braced up because when everything has gone completely to the dogs, they are the ones who will come back and build up a new society; and meanwhile, your preaching will reassure them and keep them hanging on. Your job is to take care of the Remnant, so be off now and set about it."


Let's follow up on this notion of "Remnant" by invoking the Pareto Principle.

If the parameters in the Pareto distribution are suitably chosen, then one would have not only 80% of effects coming from 20% of causes, but also 80% of that top 80% of effects coming from 20% of that top 20% of causes, and so on (80% of 80% is 64%; 20% of 20% is 4%, so this implies a "64-4 law").

This suggests that a mere 4% of the 300 million Americans could influence 192 million of their fellow citizens. Since children and the very elderly generally wield less influence than those adults of working and child-bearing age, let's subtract the 60 million Americans under 14 years of age and the 18 million over 75 years of age: Annual Estimates of the Population by Sex and Five-Year Age Groups for the United States: April 1, 2000 to July 1, 2007 (U.S. census Bureau)

That leaves about 220 million Americans between 14 and 75 years of age. 4% of that number is 8.8 million. So the critical number for the Remnant in the U.S. appears to be about 9 million people.

In other words, when 9 million people start leading (4%), then 140 million (64%) will follow. Once those 150 million are moving in the same direction, then they will collectively be an irresistible force for positive change.

Continue reading Chapter Four...
http://www.oftwominds.com/blogmar09/survival4-03-09.html


link backwards to previous chapters...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3802924&mesg_id=3803523

[Summermoondancer]

91. Don´t dabble

in stocks buy cheap real estate it will get us out of this quicker and you will end up with a better return in the long run...

In Detroit there are houses starting literally at $100 while I probably would not live in those neighborhoods right now even with an entire army guarding me...if enough sane Americans buy homes in those neighborhoods they can probably rescue them..There are houses in middle class neighborhoods there going for 2k and in Atlanta there are houses starting at 5k...yeah that is right in Atlanta where houses were impossible to find under 100k even in bad neighborhoods are going now for 5k...it was unfortunately number2 in foreclosures at the last report and Cleveland was number 1.

[Tansy_Gold]

95. what for?

Why would I buy a house for $100 in Detroit?

Would I want to live in it? No (I don't do cold weather)
Would I sell it for a profit? No, not if it's unsold at $100.
Would I rent it? To whom? For how much? How would I make sure they didn't strip it of the copper, the cabinets?

Honey, there's a reason there are unsold homes in Detroit, Atlanta, Chicago, Phoenix, everywhere. It's 'cause nobody wants to buy 'em even at those prices.

You want 'em? You buy 'em. Let me know how soon you get rich off 'em.




Tansy Gold, far richer in other ways

[Demeter]

100. If I had Fewer Years and More Dollars (and friends in the right places)

I would buy up a large block of Detroit, level it, renew it, and build a solar community with its own truck farm. Provided I could get shut of belonging to the city tax base and gate the entire community.

And with the proceeds, I would wash, rinse, repeat, until there was sufficient housing for all who wanted to behave. And we could create worker-owned corporations for manufacturing, and surround and include historical landmarks, museums and private schools and colleges. Then we'd buy the water system and the Ambassador Bridge.

Take that! Tom Monaghan and your ridiculous Catholic community in Florida and your delusional Catholic law college, and your crappy pizza.

[Demeter]

101. And the Reasons to Save Detroit?

Location, infrastructure, history, and it's flat, has water, and a large population (2 million, if I recall correctly) surrounding it to interact with. And most of the Interstate has been recently repaired, including the bridges.

[tclambert]

119. Metro Detroit area has about 4 and half million

according to Wikipedia. The Detroit-Windsor area has around 5 and half million. Watch out for toxic waste spills from old industries, though. The Delray neighborhood is one of the most polluted. Clean up is expensive.

There are still some "green zones", like Palmer Park, or Indian Village. The $100 homes won't be in those neighborhoods.

[Demeter]

124. 4.5 Million Probably Stretches Past the Airport to Ann Arbor

south to Toledo, Ohio and North through Macomb County.

[Summermoondancer]

115. Enough of us get ideas like that and

we might have something...you don´t have to level the houses though you can work with what you have...in some cases you will have to level the houses, but I think that recycle works fine and you can adapt solar into those houses.

[Demeter]

122. Trust Me, a Lot would Have to Be Leveled

The developments from the 50's or earlier might have oak flooring and solid doors worth saving, but it was a working class city--not anything particularly durable, functional or pleasing to the eye. Upscale neighborhoods like Grosse Point were far removed from the working man. There was heavy industry in the heart of the city, especially along the Rivers. My great-grandmother's curtains and sidewalks were dyed orange by the Kelsey-Hayes plant, and we watched Coca Cola bottled across the street from her porch swing...I was born on that street.

[Summermoondancer]

131. Oh I realize that but

many things like wood could be recycled and used again. Bricks can be reclaimed as well. I do feel like probably about 75% would need demolished, but even those can have things reclaimed from them to use again...especially if the idea is saving the environment and having eco friendly homes at the same time. Think recycle instead of waste..I bet that if there were just 50 of us we could buy the entire Highland Park area for less than 200k.

[Summermoondancer]

114. Actually no it is because of foreclosures..and the market has hit bottom

if you sit on real estate and fix it eventually it goes up. You can rent it in the meantime because there is always someone wanting to rent and with the market the way it is and all of the foreclosures out there you will find a butt load of people who have lost their credit due to it.

[Demeter]

126. In Detroit, It's Abandonment

People started abandoning property shortly after the riots, and it continues to this day. The city gets it due to unpaid taxes, and tries to do anything with it.

[Summermoondancer]

129. Yes, the riots and companies closing

however, people are starting to take interest in doing massive demo and restructuring the city. The homes that I am talking about though are foreclosures. At the price it is worth demoing the house and rebuilding a block at a time as someone pointed out or remodel from the inside out and make them more eco friendly and renting them or resell however, rent will probably get your money back quicker than resell...

[specimenfred1984]

96. Tempting isn't it, I used to real estate hunt in WV

A relative got a 3000 sq. ft. place for 20G which wasn't uncommon. Location is everything and incomes vs. prices. I just don't see Detroit turning around anytime soon but if you do, what do you see happening that could positively effect real estate prices there?

[Summermoondancer]

117. I see when the market levels and starts upwards that

things will increase...see this town is in the worst shape of any cities..eventually politicians will make it a project...if there are enough investors willing to renew the place and we can get the tax dollars together, a grant per se...a few of these communities can be revitalized and yes, like someone said solar...though I am not sure about how well that will work with the weather in winter in Detroit...perhaps some business can be attracted the old fashioned way...with tax breaks. Vast demo does have to happen and yes strict community policing needs to go on, but about 100 of us all hard headed enough and we can make it happen..we might end up owning Detroit and make it right wing free!}(
We could also work hard to attract communities that are ethnically diverse to balance things and promote growth...immigrants and minorities work hard and with the right combination it might become the best and most sought city in the US. Why do I care since I am not from Detroit...I don´t know...it just seems so sad that there is a city in the US that looks worse than some of the slums in Haiti.

[Demeter]

125. Solar Works in New Hampshire--Much Colder, Longer Winters

the data is in. Even cloudy days have enough energy. And insulation provides the make-or-break.

Most of our energy problems are waste.

[Summermoondancer]

130. Thanks for that information

I find that very interesting. Also, the way you locate your house in coordinate with the sun it makes it more effecient as well. I think tankless water heaters, solar panels, home position, low water use shower heads and toilets and water saving washing machines. Yes, a block or neigbhorhood at a time...100 investors could redo an entire section of Detroit and that may reinvigorate things some...I would say buy the worst part of Detroit and start working...evict gangs and criminals, gate the place FIRST, then get to work, lo E glass in windows, insulation, solar panels on roofs, rip out and recycle water heaters and replace with tankless ones. Place heaters in the floors that use a more effecient system. Use recycled materials for the floors instead of carpet because carpet is not environmentally friendly, it damages easily and it causes allergies.
How many would be willing to invest in a project like this? If it required only about 50k each to start?

[Zynx]

112. Real estate moves in much slower, longer cycles than stocks.

The reason is that transaction times are much much longer.

[Summermoondancer]

118. Yes, but the return is better in the long run if you invest low and

plan right. I really liked the gated solar idea...revamped eco friendly houses does wonders.

[specimenfred1984]

97. WOW, check out this Grace Jones video "Corporate Cannibal"

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=385&topic_id=289812&mesg_id=289812

[ozymandius]

109. Ending with clawing back most of what it gave -

Dow 7,776.18 Down 148.38 (1.87%)
Nasdaq 1,545.20 Down 41.80 (2.63%)
S&P 500 815.94 Down 16.92 (2.03%)
10-Yr Bond 2.761% Up 0.028
NYSE Volume 6,560,468,500
Nasdaq Volume 2,118,407,750

4:30 pm : Stocks spent all of Friday's session in the red as participants opted to take profits. The stock market closed with a 2.0% loss amid widespread weakness. However, stocks were able to register a weekly gain of 6.2%.

Financials were the best performing sector for the week, advancing 12.2% during that time. Its gains throughout the week made it the focus of sellers' efforts; financials fell 3.5% this session, which made it the worst performing sector of the day.

Banking stocks were some of the hardest hit as the KBW Banking Index shed 3.3%. Weakness in the group intensified after JPMorgan Chase (JPM 27.40, -1.70) chief executive Jamie Dimon stated in a CNBC interview that March has been a little tougher than prior months.

Weakness in large-cap tech caused the Nasdaq Composite to underperform its counterparts. Intel (INTC 15.42, -0.40) failed to find support after announcing it will issue a $1 billion common stock offering. Given the stock's 25% bounce in the last month, the offering will allow the company to raise the $1 billion by issuing fewer shares. The issue will still prove dilutive to existing shareholders, though.

IBM (IBM 94.15, -4.63) also traded with marked weakness. Its downturn came as investors became fretful that the company's technological and business consulting service could be hurt by dour economic conditions. That concern stemmed from news that Accenture (ACN 27.66, -4.30) lowered its outlook for the full year.

The broad selling effort was carried into commodities trading. May crude oil spent the entire pit session in the red, closing 3.6% lower at $52.38 per barrel. April gold finished the session at $923.20 per ounce, down 1.8%, while silver finished 2.6% lower at $13.26 per ounce.

Despite the broad weakness, there were some advancers. Shares of General Motors (GM 3.62, +0.21) logged a gain, though they were knocked from session highs in the wake of reports indicating the company is offering union members $10 billion in preferred stock at a 9% coupon and $10 billion in cash amortized over 20 years. The report came after earlier reports suggested that GM may be unable to hit its March 31 goal to lock in union concessions as part of the company's restructuring plan.

There was only a bit of economic news for participants to digest this session. February personal income declined -0.2%, while spending increased 0.2%. Both were essentially on par with estimates. Real personal consumption expenditures, which is the main component in GDP forecasts, declined 0.2%.

Without any major economic or earnings reports on the docket for Monday, investors will be spending the weekend ruminating over the developments of the past week. Should investors return Monday intent on buying Friday's dip, it could suggest an improved underlying bias is still present. DJ30 -148.38 NASDAQ -41.80 NQ100 -2.3% R2K -3.7% SP400 -2.5% SP500 -16.92 NASDAQ Adv/Vol/Dec 658/2.11 bln/2055 NYSE Adv/Vol/Dec 720/1.44 bln/2324