STOCK MARKET WATCH, Monday April 27

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday April 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 April 24, 2009

Dow... 8,076.29 +119.23 (+1.48%)
Nasdaq... 1,694.29 +42.08 (+2.55%)
S&P 500... 866.23 +14.31 (+1.68%)
Gold future... 914.10 +7.50 (+0.82%)
30-Year Bond 3.88% +0.08 (+2.08%)
10-Yr Bond... 3.00% +0.07 (+2.36%)

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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 Observation

The Service Economy
BY BRIAN PRETTI

You’re darn right the US is a service based economy these days. No two ways about it. I have just a very quick comment about our wonderful US service economy, but probably not relative to what first popped into your head when I characterized the economy as such. Of course I’m talking about debt service. First a few very fast bigger picture comments.

Given the near historic short term rally we’ve had in the equity markets as of late, trust me, I’m not looking to wallow in pessimism. Quite the opposite. The damage done to the equity markets over the last year and one half is generational. You see, it may be once in a lifetime (at least let’s hope so). At the same time, I’ve seen so many bear market rallies in my time that it looks like the fingerprints of the bear are all over this one, but I think it’s important to remain open to any outcome. As always THE key personal characteristics of successful investors are humility, humility and then humility. Lastly, I certainly have to acknowledge the Administration has finally realized its messaging and actions need to be much more sensitive to financial market outcomes. A lesson learned after a terrible January and February. The tone, communication orchestration and sensitivity have changed 180 degrees.

....

Back to the issue at hand. Personally I suggest we all remain focused on the facts and bigger picture ideas and trends of the moment. I can assure you that a month+ equity rally is not about to fundamentally change the character of a US macro credit cycle and economy that has been leading up to this period of reconciliation for a good three decades now. As always, to maneuver the financial markets successfully, one must first have an affinity and talent for behavioral psychology, and then have a decent familiarity with numbers. And most of the time the numbers really aren’t the key driver of financial asset prices over shorter periods of time.

...
An important issue as I look at the 4Q 2008 Flow of Funds statement is the character of household debt service. Or more correctly, the lack of change in debt service itself given the change in household nominal dollar debt outstanding and the change in consumer borrowing rates in the prior period. Right to the point, in 4Q the quarter over quarter change in household debt outstanding saw a drop in levels of nominal dollar household leverage never seen before in US history. Personally I remain of the opinion that households are just at the beginning of what should be a prolonged deleveraging process. A process the Fed/Treasury/Administration would love to nip in the bud.

....

So the punch line lies directly below. In a quarter where household debt declined in nominal dollars by the greatest amount ever witnessed in US history AND in a quarter where conventional mortgage rates dropped meaningfully, the household debt service ratio was basically flat. And in the bottom clip of the chart below, the household mortgage debt service ratio actually increased. The world is not coming to an end by any means, but I believe before the current cycle is over, it’s literally a necessity that household debt service ratios measured in any number of different fashions must decline. Not should decline, but must decline. Remember, it’s the stated intention of the Fed/Treasury/Administration to “get credit flowing again.” This while household debt service ratios remain to this day much nearer all time highs than not.

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

lotsa charts

[Demeter]

15. Is He Nuts?

I think the actions of the banks and Treasury and Fed Reserve spoke louder than any words from the White House.

[ozymandius]

25. Probably.

Financial Sense increasingly sounds like then nutbag wing of Libertarian economic circles. Plus - these fools, like Tim Wood, try to make sense out of the markets' behavior. There is nothing logical about market swings when unprofitable companies' stocks rise in price and profitable companies' stocks fall.

Edit to add: He does have a point about "getting credit flowing again" with the obvious question being: to whom and for what?

[willing dwarf]

34. This may be obvious or incomplete but

I thought his main points were about household debt servicing needing to come downand that it hasn't come down to reasonable levels yet. His point seems to be that if the economy is depending on household debt service to support the economy, well that dog's not going to hunt.

I can understand that point, but I still don't get how that should impact a person's relationship to investing in the market. And after years of trying to get up to speed on how the stock market works, I still find there are far too many variables to make me want to get into stock trading. -- I let my mutual fund people make sense of it, and hope they know what they are doing.

Still, I always like reading your postings Ozy. Thanks.

[InkAddict]

40. Here's how that impacts debt servicing

When healthcare/housing/education costs grab every dollar one can earn, if one can even hang on to a stable job, one has NOTHING to invest in the market...

FAMILY-SUSTAINING JOBS FOR AMERICANS, BABY!

I'd like to believe that the vast majority of Americans WANT to repay debts necessary to care for their loved ones, house and feed their families, and educate themselves and their children...the rest is just fluff stuff, but until TPTB tackle the twisted polcies of those baseline issues nothing will recover.

Just look at the results...Millions lack healthcare...foreclosures loom large...tuition all but unaffordable. What we're left with is COMPANY STORE SLAVERY while the corporate person gets coddled into "healthy" profits(?), multiple homes (subsidiaries/branch offices), and feel-good self-interest seminars for the in-crowd. So just how is innovation supposed to come out of that???

[AnneD]

46. Morning Marketeers..........

:donut: and lurkers. Wonderful post Ink....the only thing I can add is that there will be no recovery until this is issue and the issue of regulation of the stock and banking industry are addressed. I am coming on to my peak earning years and I put very little into the market now and will not until things change. That means better regulation, better guarantees for pension funds, more transparency on WS, tougher regulation of the banking industry. If my wages were higher, I could save more but even as a Nurse I still have things I cannot do-like help my daughter more with college, build a retirement AND buy a house, etc because of the cost....and I make above the median in this country and am a frugal person by nature.

Happy hunting and watch out for the bears, they are in full grazing mode.

[Karenina]

56. Any Max fans here?

:rofl::rofl::rofl:

http://www.youtube.com/watch?v=lnb1qXhXOas

And then of course there's DECAPITATION...

[Ghost Dog]

61. Yes indeed. You really need to see the whole of that France24 debate

http://maxkeiser.com/page/2/ (currently at top of page two, in two sections), with the excellent, straight to the point Tony Benn (still strong at 84) and Raquel Garrido of the new French Left Party, and Oliver Griffith of the US chamber of commerce... and Max. Great Stuff.

BTW: observe Griffith at the end of segment 1, given enough rope... telling (some of) the truth... he says:

"Look at the election of Obama... A dramatic shift... Not elected primarily by Big Business... but elected by a lot of Little People giving a lot of money..."

Ok. But still... elected (mostly) by money.

[Karenina]

62. Oh yes, I DID!!

I've been a Max addict since '07. :rofl:

[Ghost Dog]

64. Heh heh. A reminder: the Decapitation (voustube mix) link is:

http://tr.youtube.com/watch?v=KSAeldJ1SYw

[followthemoney]

72. The bankster scoundrels need to learn to beg for rule of law.

Prison will seem a comfortable alternative once the lawless predators are confronted by their enlightened newly lawless angry victims.

[Ghost Dog]

78. They already rejected rule of law.

Sorry.

[ozymandius]

70. I thank you for your kind thoughts.

The only investment advice you should ever hear around this thread is this: Never put any money in the stock market you are not prepared to lose.

To the earlier point: Yes, I believe that the assertion regarding an economy's viability based on debt-fueled consumer spending is very accurate. If any stock trading wisdom comes out of this little nugget can be realized then it's useless hindsight. To say this man is a visionary is an insult to visionaries. He uses that "hope" thingy - never a good sign when one is posturing as an authority. Mr. Pretti jumps from random thought to hopeful speculation. It's certainly not the stuff of greatness.

[ozymandius]

2. no goobermental reports today n/t

[ozymandius]

3. Oil falls to near $49 amid uncertain outlook

SINGAPORE – Oil prices fell toward $49 a barrel Monday in Asia as investors, groping for guidance amid a severe recession, took back Friday's gains.

Benchmark crude for June delivery was down $2.14 to $49.41 a barrel by late afternoon in Singapore, in electronic trading on the New York Mercantile Exchange. The contract Friday jumped $1.93 to settle at $51.55.

....

In other Nymex trading, gasoline for May delivery fell 4.06 cents to $1.40 a gallon and heating oil slid 4.97 cents to $1.32 a gallon. Natural gas for May delivery dropped 9.7 cents to $3.20 per 1,000 cubic feet.

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

[ozymandius]

6. Average U.S. gasoline price barely budges

NEW YORK (Reuters) – The average price for a gallon of gasoline in the United States rose less than a penny in the past two weeks as the economic downturn help to keep a lid on retail prices, according to the Lundberg survey released on Sunday.

The average national price for self-serve, regular, unleaded gasoline was $2.0549 a gallon on April 24, up slightly from April 10 when the average was $2.0481, according to the nationwide survey of gas stations.

The average price remains a whopping $1.42 below year-ago levels, and is far below the all-time high of $4.1124 a gallon set on July 11, 2008.

http://news.yahoo.com/s/nm/20090426/us_nm/us_energy_gasoline_retail

[Demeter]

16. Oil falls below $50 on flu pandemic fears

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=OBR&date=20090427&id=9771637

[ozymandius]

4. World Bank: Economic crisis turning into calamity

WASHINGTON – The global financial crisis could become "a human and development calamity" for many poor countries, the World Bank said, urging donor nations to speed delivery of money they have pledged and consider giving more.

Developing countries, its main constituency, face "especially serious consequences with the crisis driving more than 50 million people into extreme poverty, particularly women and children," the bank said Sunday.

Bank President Robert Zoellick said some of the poorest economies are being hit by "second and third waves of the crisis." He said no one knows how long it will last or when recovery will begin.

....

The bank will respond by tapping its healthy balance sheet to increase lending up to $100 billion over three years and launch initiatives in social protection, public works and agriculture, he said.

....

To make up the shortage, the IMF agreed to sell bonds — something it's never done in its 65 years — to emerging economies such as China, Brazil and India. Those nations have said they want a greater voice at the IMF before they'll provide additional resources.

http://news.yahoo.com/s/ap/20090427/ap_on_bi_ge/us_world_economy

[ozymandius]

5. Stock markets dive on swine flu fears

LONDON (AFP) – Global stock markets mostly tumbled on Monday as investors took fright at a swine flu outbreak which has likely killed more than 100 people in Mexico.

Strong gains for heavyweight pharmaceutical shares could not prevent leading indices across Europe and Asia sliding into the red, as the value of airlines' stocks plunged on worries that governments could impose travel restrictions.

....

In early European trade, London's FTSE 100 index shed 1.13 percent, Frankfurt slid 1.92 percent, Paris lost 1.64 percent and Madrid dived 2.18 percent.

....

Chinese shares closed down 1.77 percent on Monday, with food producers leading the decline in response to the swine flu outbreak, dealers said.

Seoul shed 1.05 percent, but Tokyo and Sydney managed to end slightly higher.

Wall Street, expected to mirror heavy losses in Europe when it reopens, had revved higher Friday as sentiment was boosted by US carmaker Ford's narrower-than-expected loss and data suggesting the ailing US economy may have found a bottom, dealers said.

http://news.yahoo.com/s/afp/20090427/bs_afp/stocksworld_20090427084424

[Ghost Dog]

33. Japan slashes growth outlook, more stimulus eyed

TOKYO, April 27 (Reuters) - Japan's government slashed on Monday its economic forecasts, saying gross domestic product would shrink 3.3 percent over the next year, and a senior ruling party official said further stimulus would be needed.

The cabinet formally approved a record 15.4 trillion yen ($159 billion) stimulus plan, largely funded by new bonds -- with market players warning sliding tax revenue and more stimulus spending would mean even more bond issuance.

...

The government plans to sell 16.9 trillion yen in additional bonds, raising total issuance 13 percent to 149 trillion yen, prompting a greatly increased bond auction programme. The increase means the sale of new bonds almost matches tax revenue in the core government budget, official figures show. Government officials warned that even their new forecasts came with substantial downside risks, reinforcing expectations for another stimulus package and more bonds.

...

Driving the contraction are sliding industrial production and exports. The government now sees industrial production falling 23.4 percent in the year to next March, much deeper than its previous forecast for a 4.8 percent drop. It said exports may tumble 27.6 percent, down from its previous forecast issued in January for a 3.2 percent fall.

The outlook takes into account the record stimulus plan unveiled this month, which the government hopes will boost economic activity by 1.9 percentage points, but also with a warning that there were risks of a further downgrade in outlook. "High uncertainties remain over the outlook for the stabilisation of the global financial system as well as the economy," the Cabinet Office said in a report.

...

Boding ill for Prime Minister Taro Aso just months away from an election, the government forecast unemployment to rise to a seven-year high of 5.2 percent, as a sharp drop in production in light of tumbling exports dealt a severe blow to manufacturing jobs. The government also forecast a deeper return to deflation this year, with prices seen dropping 1.3 percent, further than a previous forecast for a 0.4 percent fall.

...

The new forecast also included a revised real GDP estimate of a 3.1 percent contraction in the fiscal year ended on March 31, down sharply from the earlier estimate of a 0.8 contraction. The new forecast is based on an assumption that first quarter figures due on May 20 may show an annualised contraction of about 14 percent -- the deepest since comparable data started in 1955.

/... http://www.reuters.com/article/marketsNews/idINT36599320090427?rpc=44&sp=true

[AnneD]

45. FYI....

reports on the ground in Mexico City place the number of deaths well over 200. They are low balling it to avoid a panic. This was from a DR. to the BBC comment page.

[Demeter]

47. Long Live the Internets!

No longer can they hide the news--truth will out. And with globalization, there's nowhere to run to, either! I expect in 50 years we will be a much more civilized, egalitarian world, with a greater economic equality.

Too bad we will all be dead. but it is a goal that has a chance, for the first time in human history.

[AnneD]

48. Some of these folks haven't figured it out yet....

It will be tougher to do these dirty deeds. Internet is better and faster than any news organization. Still needs a way to insure facts but it really is very good.

[Demeter]

50. It doesn't even take 24 hours for the truth to out

As those who have tried propagandizing have found to their dismay (I'm talking about the Elephant crowd, here).

The Fundies, because they limit their exposure to all forms of reality, take longer to wise up, but I seriously doubt that sane people will put up with the childish ignorance of Fundies much longer. Stupidity is passe.

[Ghost Dog]

54. I'm predicting a readlly crazy panic-roller-coaster, actually,

especially in USA, regardless of the actual virulence of this now quite sure-to-spread epidemic.

I see the WHO, as at 10 hours ago last I looked, still hesitating... no doubt to an extent on economic grounds. So, tell me, the economic effect of closing borders all over the world will be?

...Perhaps (together with pre-existing factors) the beginning of the end of laissez-faire so-called "globalisation".

(Edit: or, perhaps, they'll make a calculation and decide to just let it go, run its course, and take the hit).

Africa, for starters, is going to need much genuinely altruistic aid.

:(

[ozymandius]

7. Chrysler and Union Agree to Deal Before Federal Deadline

DETROIT — Union leaders said Sunday that they had reached an agreement with Chrysler that meets federal requirements for the automaker to receive more financing.

The deal includes Fiat, the Italian automaker with which Chrysler was ordered by the government to form an alliance before Thursday.

Neither the United Automobile Workers union nor the company released details of the tentative agreement, which would modify the union’s 2007 contract and reduce the amount of money Chrysler must pay into a new health fund for retirees.

....

Chrysler said the agreement, reached during marathon negotiations over the weekend, satisfied the requirements laid out by the Obama administration for a deal by an April 30 deadline.

Even with the agreement, Chrysler is expected to seek Chapter 11 protection, in a case mapped out by the government in advance, including safeguards meant to protect worker benefits, people with knowledge of the company’s plans said Sunday night.

http://www.nytimes.com/2009/04/27/business/27chrysler.html?bl&ex=1240977600&en=670e4df8295b2843&ei=5087%0A

[ozymandius]

8. Mitsubishi Motors,Toyota Units Post Losses;Sales Drop

TOKYO (Dow Jones)--Mitsubishi Motors Corp. (7211.TO) and two Toyota Motor Corp. (7203.TO) subsidiaries said Monday that they fell into the red in the just-ended fiscal year, reenforcing expectations that major Japanese auto makers are about to report large losses.

Because Mitsubishi, Hino Motors Ltd. (7205.TO) and Daihatsu Motor Co. (7262.TO) are among the first Japanese auto makers to report results for the fiscal year ended in March, analysts say that their dismal results will likely serve as a prelude to their larger domestic rivals.

Honda Motor Co. (7267.TO) releases its earnings Tuesday, while Toyota reports its results on May 8 and Nissan Motor Co. (7201.TO) on May 12. All of these companies are widely expected to report net losses for the January-March quarter.

Posting its first net loss in three years, Mitsubishi said it swung into a net loss of Y54.88 billion last fiscal year, a sharp drop from the Y34.71 billion net profit it reported a year earlier. The bulk of that loss appears to be tied to a Y50.1 billion group net loss the company reported for the January-March quarter.

http://online.wsj.com/article/BT-CO-20090427-703780.html

[ozymandius]

9. One Nation, Under Banks With Justice for No One: Jonathan Weil

This is a good explanation for anyone who missed this drama unfold over the past week.

Excerpt:

Both Bernanke and Paulson in mid-December knew Bank of America was obliged by statute to publicly disclose the huge losses Merrill Lynch & Co. had racked up that month. You don’t get to be chairman of the Federal Reserve or, in Paulson’s case, secretary of the Treasury or head of Goldman Sachs Group Inc. without learning this basic tenet of U.S. securities laws. Instead of making sure the public was fully informed of the losses before Bank of America completed its purchase of Merrill on Jan. 1, they did all they could to keep the secret safe.

Neither Bernanke nor Paulson told the Securities and Exchange Commission, according to the letter Cuomo wrote to lawmakers and regulators. They didn’t tell Lewis or anyone else at Bank of America to do the right thing and obey the law. And while they promised Bank of America lots of money to keep it from calling off the deal, they were careful not to commit any of their agreements to writing for fear this would bind the government into disclosing them itself.

....

During his Feb. 26 sworn deposition, Lewis told lawyers for Cuomo’s office that “it wasn’t up to me,” to decide whether to disclose Merrill’s losses or Bank of America’s deal with the government. He said his decision not to disclose the information was based on direction from Paulson and Bernanke: “I was instructed that ‘We do not want a public disclosure.’”

Even if Lewis’s account of what they said is true, though, it WAS up to him to make full disclosure. And it was up to a lot of other Bank of America officers and directors who failed in their duties, too. That doesn’t get Paulson and Bernanke off the hook. If they had wanted Bank of America to follow the law, they would have left no room for ambiguity.

All this puts the SEC and the rest of the government in a horrible spot. It is a matter of public record that the law wasn’t followed, thanks to Cuomo’s disclosures last week. And yet the agencies and policy makers responsible for enforcing the law are probably powerless to do anything about it.

Now will Mary Schapiro do her sworn duty?

[Dr.Phool]

10. But, but, you can't put lawyers, er- bankers in jail for giving bad advice!

That would be un-Amerikan.

These guys are starting to make Madoff and Stanford look like saints.

[ozymandius]

12. But you can make them feel like they're in jail -

sharing a cell with the man with the big fingers. Scrutiny into their personal dealings is like kryptonite to them.

[Demeter]

17. I Could Put Paulson and Bernanke In Jail!

Paulson is definitely a crook, and Bernanke is too stupid to live, which is a crime against Nature, if nothing else.

[ozymandius]

13. Are the Knives are Coming Out for Geithner?

-excerpt-

Any reader of any remotely plugged in econoblog, or savvy enough to read between the lines of MSM reports will know that Geithner is a creature of the financial establishment. Probably the most important element in his pedigree is that he is a protege of Larry Summers and Bob Rubin. It also appears that he and Summers are working fist in glove (witness the marginalization of Paul Volcker).

At a minimum, Geithner crony capitalist policies are finally leading to a hard look at his loyalties. There is no reason to think Geithner is personally corrupt (well, there was his little tax problem) but rather that he is as die hard a believer of finance uber alles as Alan Greenspan, albeit without the libertarian zealotry.

Of course, if one were Machiavellian, this move may be Team Obama realizing rather late that they have made the success of Obama's presidency contingent on the Summer/Geithner program, and now they are trying, even more so than before. to pin the policies on Geithner. That may work tactically but in the end, the banking mess is too central a problem for Obama to try to shift blame of policy failures onto his team. He picked the chefs, he has to eat the cooking. If the economy is still a mess in 2012, he will not escape the taint.

....

And while the Times piece finally points to the elephant in the room, namely, how bankster friendly the new regime has been, it is far less pointed than it could have been. I suppose one has to treat Treasury secretaries with kid gloves The questionable incidents and relationships are diluted by a lot of narrative. But recall we never saw anything remotely like this treatment (save lots of grumblings) about Hank Paulson. Of course, handouts to the big end of town was standard operation in the Bush administration, so it was hard to work up much outrage about it (at least until the heinous TARP).

From the New York Times:

Last June, with a financial hurricane gathering force, Treasury Secretary Henry M. Paulson Jr. convened the nation’s economic stewards for a brainstorming session. What emergency powers might the government want at its disposal to confront the crisis? he asked.

Timothy F. Geithner, who as president of the New York Federal Reserve Bank oversaw many of the nation’s most powerful financial institutions, stunned the group with the audacity of his answer. He proposed asking Congress to give the president broad power to guarantee all the debt in the banking system, according to two participants, including Michele A. Smith, then an assistant Treasury secretary.

The proposal quickly died amid protests that it was politically untenable because it could put taxpayers on the hook for trillions of dollars.....

....

This story now makes official what only those who kept tabs on these matters knew, that Geithner is captured by the industry. It will now be much easier for Obama to cut Geithner loose should that prove necessary. But with Summers still in the mix, I'm dubious that even an outster of Geithner would produce much of a change in policy direction.

http://www.nakedcapitalism.com/2009/04/knives-are-coming-out-for-geithner.html

[Demeter]

18. Under BushCo Rules--Waterboard them All!

It's the least we can do.

[Tansy_Gold]

19. .

:rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl::rofl:



:puke:

[Demeter]

21. Morning Tansy! Are You Laughing at Me?

I'm beginning to think my kid has swine flu...it's been over a week. I'm getting her on antibiotics--I waited, like the doctor insisted, but enough is enough.

And it's 85F again. not April weather. I do not want 5 months of July. If I did, I'd move to Florida. i want my 4 seasons, dammit, in their appropriate order,with gradual transitions!

[Dr.Phool]

27. Hey, my pool was 90 degrees yesterday.

Solar heat.

Even that felt refreshing after doing yard work all day.

[Tansy_Gold]

29. No, my friend, NEVER at you.

But at the notion that Geithner's crony ties are in any way "news."

I mean, where have these morans been since November 24th??????????????????????????????????



Chilly here this morning, probably upper 50s, low 60s. Should hit 80s today, but I rarely even check the forecast this time of year.

http://www.youtube.com/watch?v=4SxvcX_nxD4

I spent half an hour trying to find a better clip of this but couldn't. The quality of recording isn't great, or the video for that matter, but I hope the sentiment comes through.

And since I can't stand links without explanations ---> spoiler

\/

\/

\/

\/

\/

















Richard Burton and Julie Andrews do Camelot.

[Demeter]

32. Oh! Thank You!

whoever filmed this deserves a medal--it's a treasure.

This is even better!


http://www.youtube.com/watch?v=GZdlnqxFWpE&NR=1


Darn! And I'm going to miss this weekend--it should be Camelot weekend, witth e lusty month of May and all....

[Tansy_Gold]

37. Silly me, silly me. I adored him

There's one comment on one of the youtube clips. I should have copied it, but didn't, and I'm too time-constrained now to find it again.

It was something to the effect that the commenter felt Burton played Arthur like a man born to greatness, Harris like a man who has greatness thrust upon him. I was just never able to reconcile Harris in the role at all and have only been able to watch brief snippets, perhaps because I couldn't imagine anyone other than Burton. Ever.



TG

[Demeter]

75. That's the Nature of Charm and Sex Appeal

guilty as charged.

[Ghost Dog]

53. It is all so, and so predictably, bathetic, isn't it.

But Much Bigger Heads than this will have to Roll.

http://www.youtube.com/watch?v=-KL76edqCKc

[Tansy_Gold]

55. "But everyone's having such a good time."

thanks GD

:yourock:

[Ghost Dog]

66. Allow me to send y'all this, btw, with love from young people in Spain:

http://www.youtube.com/watch?v=wIpZMPSGUV8 (déjame vivir... libre - La Mari y Jarabe de palo)

... o aquí ¿mejor sonido? http://www.youtube.com/watch?v=5sjkxSrTwwo ...

Luego ponemos por ejemplo esta, anda: http://www.youtube.com/watch?v=qt0MT5RkSqY&NR=1















Sin olvidarme de tí. http://www.youtube.com/watch?v=9CIfRdoDg0U&NR=1

. So Pure : http://www.youtube.com/watch?v=qJW8k7ksXAo&NR=1

[UpInArms]

22. Thain says BofA Merrill statements not true: report

http://www.reuters.com/article/businessNews/idUSTRE53Q10620090427?feedType=RSS&feedName=businessNews

(Reuters) - Bank of America Corp made inaccurate statements about its role in the bonuses and losses at Merrill Lynch & Co, former Merrill Lynch & Co Chief Executive John Thain told the Wall Street Journal in an interview.

"The suggestion Bank of America was not heavily involved in this process, and that I alone made these decisions, is simply not true," John Thain told the paper.

Merrill awarded bonuses just days before Bank of America completed its acquisition of the Wall Street investment bank and brokerage on Jan 1.

Several U.S. lawmakers are pushing for a probe into Bank of America's purchase of Merrill.

[ozymandius]

11. Calculated Risk explains the Fed's relationship with your bank.

Here is an excerpt from a very long blog post. Most remarkable to me is the simply structured, yet unsustainable, backstop the Federal Reserve provides the local bank (or MegaBank, as the case may be) in the form of FDIC.

To stop the bank run, the FDIC stepped up and increased the guarantee on FDIC insured assets to $250 thousand. But this did nothing for the commercial paper investors.

Bank Balance Sheet Next the Fed steps in and replaces the commercial paper liability as it matures.

If this was just a panic, and the bank was actually fine, the commercial paper investors would return (or the bank could sell more long term debt), and the Fed would be replaced by private debt.

However this is not just a liquidity crisis, and the Fed is still providing liquidity to the banks.

This doesn't work long term because the Fed requires the banks to over collateralize any money borrowed from the Fed. As the long term debt starts to mature, those investors will follow the commercial paper investors to the hills - and the Fed will have to provide more and more liquidity. And eventually there will not be enough collateral to borrow from the Fed.

Mind you, this scenario applies to the banks most at risk of insolvency (or currently insolvent as the stress tests will never tell) - namely the largest eight American banks. Time to think anew on this plan. IMO, it would seem that banks have no choice but either to scale down or cease to exist under these FDIC rules. Without the non-Fed collateral the banks simply cannot function. And the bigger the bank is the more capital it must raise to survive. Private capital is very difficult to find these days.

[Festivito]

14. Debt: 04/23/2009 11,184,922,662,862.85 (DOWN 6,134,701,193.97) (Nicely down.)

(The public debt, what we borrow from people, is down, and the FICA, what we owe ourselves to our SS is up -- both good things. Nearly heartwarming.)

= Held by the Public + Intragovernmental(FICA)
= 6,885,897,594,432.37 + 4,299,025,068,430.48
DOWN 12,857,484,009.95 + UP 6,722,782,815.98

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 306,220,886 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,525.67.
A family of three owes $109,577.01. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 6,226,570,372.07.
The average for the last 30 days would be 4,773,703,951.92.
The average for the last 31 days would be 4,619,713,501.85.
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$/day.
There were 65 reports in 93 days of Obama's part of FY2009 averaging 0.26B$ per report, 0.28B$/day so far.
There were 140 reports in 205 days of FY2009 averaging 8.29B$ per report, 5.66B$/day.

PROJECTION:
There are 1,368 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
04/23/2009 11,184,922,662,862.85 BHO (UP 558,045,613,949.77 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: 1,160,197,765,950.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/02/2009 +007,764,243,786.78 ------------*********
04/03/2009 +028,967,677,130.84 ------------**********
04/06/2009 +000,073,808,356.95 ------------******* Mon
04/07/2009 +000,123,552,400.07 ------------********
04/08/2009 +000,050,639,456.95 ------------*******
04/09/2009 +024,055,285,655.59 ------------**********
04/10/2009 +000,051,156,797.54 ------------*******
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******
04/23/2009 -012,857,484,009.95 -

54,097,000,070.34 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,520,290,859,603.78 in last 217 days.
That's 1,520B$ in 217 days.
More than any year ever, including last year, and it's 149% of that highest year ever only in 217 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 217 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=3846995&mesg_id=3847021

[Festivito]

80. Debt: 04/24/2009 11,185,300,192,981.20 (UP 377,530,118.35) (Tiny moves.)

(Less than a billion, that's tiny.)

= Held by the Public + Intragovernmental(FICA)
= 6,885,764,355,032.14 + 4,299,535,837,949.06
DOWN 133,239,400.23 + UP 510,769,518.58

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 306,227,058 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,526.17.
A family of three owes $109,578.5. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 6,016,171,129.17.
The average for the last 30 days would be 4,612,397,865.70.
The average for the last 31 days would be 4,463,610,837.77.
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$/day.
There were 66 reports in 94 days of Obama's part of FY2009 averaging 0.20B$ per report, 0.25B$/day so far.
There were 141 reports in 206 days of FY2009 averaging 8.23B$ per report, 5.63B$/day.

PROJECTION:
There are 1,367 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
04/24/2009 11,185,300,192,981.20 BHO (UP 558,423,144,068.12 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: 1,160,575,296,068.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/03/2009 +028,967,677,130.84 ------------**********
04/06/2009 +000,073,808,356.95 ------------******* Mon
04/07/2009 +000,123,552,400.07 ------------********
04/08/2009 +000,050,639,456.95 ------------*******
04/09/2009 +024,055,285,655.59 ------------**********
04/10/2009 +000,051,156,797.54 ------------*******
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******
04/23/2009 -012,857,484,009.95 -
04/24/2009 -000,133,239,400.23 ---

46,199,516,883.33 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,520,668,389,722.13 in last 218 days.
That's 1,521B$ in 218 days.
More than any year ever, including last year, and it's 150% of that highest year ever only in 218 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 218 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=3850387&mesg_id=3850419

[UpInArms]

20. dollar watch

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

Last trade 85.229 Change +0.513 (+0.66%)

US Dollar Facing 1Q GDP, FOMC, Earnings and G20 forecasts

http://www.dailyfx.com/story/currency/eur_fundamentals/US_Dollar_Facing_1Q_GDP__1240622011370.html

Fundamental Outlook for US Dollar: Bullish

- First quarter earnings may have been a positive factor so far, but the outlook is still far from encouraging
- Fed says recession ‘substantially reduced’ some banks’ capital though most are still well-capitalized
- Do technicals support a dollar bullish forecast? Read the FX Technical Weekly to find out.

Despite a relatively light docket of scheduled economic event risk, the US dollar tumbled against most of its counterparts this past week. This was due to the market’s acute interest in risk trends and the dollar’s association to such macro concerns. In the week ahead, fundamental conditions threaten to be far more complicated which could in turn lead to far greater levels of volatility and/or momentum. To garner a sense of what could move the market and how specifically it impacts the world’s most liquid currency, we will address each of the major themes likely to influence price action one by one. However, it is important to distinguish between those drivers that will have an immediate and decisive impact on the dollar and those that could have a drawn out impression. Both the first quarter GDP release and FOMC rate announcement have clearly defined parameters for timing and influence. In contrast, there is no clear scenario for how forecasts from global policy officials and the steady flow of earnings reports could sway a currency that has to balance its place in the economic food chain with its status as a safe haven.

There is no way of telling which manner of event risk (schedule release or general risk) will have the more pervasive effect on the US dollar; but recent history suggests we follow the currency’s function as a capital refuge. Immediate concern is the cumulative and distilled outlook for global growth and policy that comes out of the various meetings scheduled over the weekend and beyond. The G7 released met on Friday; but their seemed to offer little progress towards the world-wide rescue beyond offering a forecast for a ‘weak’ recovery by the end of the year and offering a warning that toxic assets are still a serious threat. There was sideline commentary suggesting the member nations have taken steps towards realizing the G20’s Agenda points from the London summit; but there is little evidence to substantiate such claims. Going forward, market participants will actively monitor the news wires for signs that the recovery in sentiment is unrealistic. An official statement from the G20 would be read over with a fine-toothed comb, traders will gauge the sway of proposals from the IMF and World Bank meetings this weekend, and fundamental traders will never ease up on their vigilance over nation’s individual efforts to stabilize their own economies.

The other indeterminable factor for dollar traders is the ongoing release of first quarter earnings reports. On the whole, its seems revenues and net income for American firms was stronger than analysts were predicting through the first quarter. However, this is an unreliable benchmark to gauge sentiment and economic health against. Firms are still clearly struggling with the recession and lack of credit as bottom lines that are splashed in red. This is an particularly important point to make with the financial sector (and more to the point, the 19 banks that are being reviewed for the Fed’s stress test). Traders the world over are waiting for the Federal Reserve’s assessment of how the banking giants will fair should the recession linger. In a white paper that explained the examiners’ methodology for judging each institution’s health, it was said that ‘most’ of those under scrutiny had sufficient capital – suggesting some will fail.

It is far easier to prepare and scale the impact of the advanced reading of 1Q GDP and the Fed’s rate decision. There is growing consensus that the central bank will further shrink its target range, but such a move would change little. More meaningful is the growth report. There have been claims from various policy officials of initial signs of stabilization and a decelerating pace of recession. These assertions will be immediately confirmed or denied by this specific piece of event risk. As the world’s largest economy, should data confirm a slower pace of annual contraction (as economists predict), it would be the first tangible sign that conditions are indeed improving.



...more...

Dollar, Yen Find Support On 'Swine Flu' Pandemic Fears, Adding To Concerns Over Bank Stress Tests

http://www.dailyfx.com/story/bio1/Dollar__Yen_Find_Support_On_1240826248559.html

The Yen has been the main story overnight as the currency has re-established its safe-haven status with the potential “swine flu” pandemic sending cautious investors to the sidelines. The fact that the health concerns are based in the Western hemisphere has heightened concerns as it could negatively impact the U.S. economy where the most stimulus has been enacted and is the expected source of growth to help stem the current global downturn. USD/JPY reached as low as 96.46 leaving the March 30th low of 95.94 as the next support level. There is a risk that market sentiment could return their focus back toward fundamentals, but that may not change sentiment as the pending results of the bank stress test and the gloomy outlook painted by the IMF for the global economy may still lead traders to avoid risky assets.

The Euro continues to remain under pressure as traders continue to unwind risk positions sending it back below the 100-Day SMA at 1.3219 to an intraday low of 1.3119. The economic docket demonstrated the two themes that are currently prevalent in the economic region growing confidence and declining prices. The German Gfk consumer confidence reading held steady at 25 for a third month as it beat estimates for a decline to 23. The sentiment reading follows improvement in the PMI and IFO business gauges as confidence is starting to improve on the back of the ECB’s increasingly accommodative monetary policy and the individual stimulus packages by the various countries. Meanwhile, the German import price index to -7.1% from -6.4% in February as declining oil costs continues to drive down inflationary pressures. Deflation concerns will remain as longs as price continue to fall and the economy lacks clear signs of growth returning. Therefore, expectations are t hath e central bank will lower their benchmark rate by another 25 bos and initiate non-standard measures over their next two policy meeting, which could become a weighing factor for the single currency. The 50-Day SMA is the next possible support level at 1.3059, but the April 20th below of 1.2889 will be the key level to watch.

The pound has also continued to remain under pressure as it fell to an intraday low of 1.4514, but we are starting to see support from the 100-Day SMA which stands at 1.4521. The hopes of a recovery in the U.K. housing market were put on hold when Hometrack reported that home prices fell for a 19th month by 0.3% bringing the annualized reading to -10.1%. Additionally, the BBA loans for home purchases measurement declined to 26,097 from 28,024 in March. The BoE continues to purchase debt in hopes of loosening credit markets, but if those results don’t begin to start to show results we may see fears grow that more downside risks remain for the country’s economy which could start to weigh on sterling. The 50-Day SMA at 1.4421 remains a key level of support since mid-March, and a failure there could lead to a significant move lower for the pound.

The dollar traded higher throughout the majority of the overnight session, except against the yen as the unknown attached to the “swine flu” has fueled risk aversion. We have started to see the greenback give back some of its gains as the extra-ordinary factor may have limited impact on broader sentiment. However, concerns over growth and the bank stress test may keep traders cautious going forward. A light fundamental calendar will leave the dollar at the mercy of the broader themes today but the FOMC meeting and the first quarter GDP report will provide event risk latter in the week. The Dallas Fed manufacturing report is the only release scheduled to hit the wires and it is expected to show a mild improvement to -46.0% from -49.0%. Dow futures continue to trade down over 100 points, and a weak day on Wall St could continue to lend support for the dollar.

...more...

[Demeter]

23. Goldman Sachs Shook Tens of Billions Out of Tax-Payers - Now They're Whining All the Way to the Bank

http://www.alternet.org/workplace/137561

By Dean Baker, AlterNet


Lloyd Blankfein, the CEO of Goldman Sachs, is very upset with the Troubled Asset Relief Program (TARP). Last fall, Mr. Blankfein borrowed $10 billion through the TARP at below market interest rates. Now, the government is starting to tie some real conditions to this money, for example, by limiting what Goldman can pay its executives. Mr. Blankfein argues that such conditions are making it impossible to run his business and is now anxious to return the TARP money.

It is great to see that Goldman is finally prepared to go forward into the market without its government training wheels of TARP aid, but, unfortunately, Mr. Blankfein isn't yet confident enough in his business acumen to actually forego government assistance. Goldman Sachs has benefited and continues to benefit enormously from other forms of government aid.

For example, last fall Mr. Blankfein also took advantage of the opportunity to borrow $25 billion with an FDIC guarantee to his creditors. If this government guarantee reduced his borrowing costs by two percentage points, then it means that the taxpayers handed Goldman $500 million a year in lower interest costs.

Goldman Sachs also has the opportunity to borrow at several of the Federal Reserve Board's special lending facilities at below market interest rates. We don't know how much taxpayers have given Mr. Blankfein through this channel because the Fed won't tell us. Fed Chairman Ben Bernanke's position is that when the Fed gives out money, the taxpayers just get to write the checks; taxpayers don't get to know where they went.

Mr. Blankfein also got a big wad of taxpayer money from the A.I.G. bailout. It was the biggest single beneficiary of the government's largess, pocketing more than $12 billion. If matters had been left to the market and A.I.G. had gone under, Goldman Sachs likely would have gotten almost none of the money that A.I.G. owed it.

In short, Mr. Blankfein is not at all prepared to go out on his own in the rough and tumble of the market; he just doesn't like government programs that come with conditions, like the TARP. He would much rather get his government money with no strings attached. And, since there are channels through which Goldman can get government money without any strings, it is perfectly understandable that Mr. Blankfein would opt out of a program with strings.

In this sense, Mr. Blankfein's attitude might be comparable to a mother receiving Temporary Assistance for Needy Families (TANF). To receive their benefits of roughly $500 per month, mothers must meet a variety of work and other requirements and endure lectures on the virtues of being married.

Undoubtedly, many mothers find these TANF requirements to be quite annoying. However, unlike Mr. Blankfein, most of the mothers receiving TANF do not have friends in high prices in the administration and Congress. As a result, the mothers receiving TANF will just have to live with the conditions the government imposes on their behavior.

Mr. Blankfein's whining is reminiscent of the resignation letter of Jack DeSantis, an A.I.G. executive who resigned in response to the public outcry over the huge A.I.G. bonuses. In this letter, which was reprinted in The New York Times, Mr. DeSantis complained that he worked 60- to 70-hour weeks to help in the unwinding of A.I.G. Of course, unlike the vast majority of people who put in long weeks, who earn less than $100,000 a year, Mr. DeSantis felt entitled to a salary of close to $1 million a year.

Furthermore, Mr. DeSantis apparently had a poor understanding of contract law. As a bankrupt company, A.I.G. could not make binding commitments for future payments -- it didn't have the money. At the insistence of the government, hundreds of thousands of autoworkers are now faced with the loss of the retiree health benefits for which they worked decades. Mr. DeSantis thinks that he is deserving of sympathy because the public is angry over his $750,000 bonus.

The basic story is straightforward. The Wall Street crew thinks that they are entitled to pilfer as much as they want from the public and from the government. These people have no interest in a "free market"; they would be scared to death of being forced to work for a living in the absence of a government safety net.

The Wall Street crew has relied on its political power to rig the rules to make them incredibly wealthy. They are relying on this political power to ensure that the rules remained rigged, even though their crooked deck wrecked the economy, costing tens of millions of people their jobs, their homes and their life savings. So far, it looks like the Wall Street boys are winning.

Dean Baker is co-director of the Center for Economic and Policy Research.

View this story online at: http://www.alternet.org/story/137561/

[Demeter]

24. Big Bank Profits are Bogus!Massive public deception! By Martin D. Weiss, Ph.D.

http://www.moneyandmarkets.com/big-bank-profits-are-bogus-massive-public-deception-33228

April 21, 2009 "Weiss Research" -- A big bank CEO on a mission to deceive the public doesn’t have to tell outright lies. He can con people just as easily by using “perfectly legal” tricks, shams, and accounting ruses.

Six of America’s Largest Banks at Risk of Failure

the nation’s banking troubles are many times more severe than the authorities are admitting.

First, look at the megabanks: The authorities SAY that all of the 14 largest banks have earned a “passing” grade in their just-completed “stress tests.” But just six months ago, the authorities swore that, without a massive injection of taxpayer funds, those same banks would suffer a fatal meltdown.

Was the bad-debt disease magically cured? Did the economy miraculously turn around? Not quite. In fact, we have overwhelming evidence that the condition of the nation’s banks has deteriorated massively since then.

How can our trusted authorities be so blatantly deceptive and still keep their jobs? Perhaps you should ask Fed Chairman Ben Bernanke. Not long ago, for example, he declared that the total losses from the debt crisis would not exceed $100 billion, while conveying the hope that most of those losses could be soon written off. Also around that time, the International Monetary Fund (IMF) estimated the losses would be $1 trillion, with only a small percentage written off.

The IMF’s latest estimate: $4 trillion in losses, with only one-third of those written off so far. Bernanke’s error factor: He was 4,000 percent off the mark, in a world where 50 percent errors can be lethal.

Meanwhile, based on fourth quarter Fed data, we find that, among the nation’s megabanks, six are at risk of failure in our opinion (seven if you count Wachovia and Wells Fargo as separate institutions).

* JPMorgan Chase is the nation’s largest, with $1.7 trillion in assets in its primary banking unit. It’s massively exposed to defaults by its trading partners in derivatives — to the tune of 382 percent (almost four times) its risk-based capital. Plus, since it holds HALF of ALL the derivatives in the U.S. banking industry, JPMorgan is at ground zero in the debt crisis.

Major U.S. Banks Overexposed to Default Risk

* Citibank is the nation’s third largest, with assets of $1.2 trillion in its main banking unit. Its total credit exposure to derivatives is a bit lower than Morgan’s, at 278 percent, but still extremely high. Plus, it has other troubles, especially the surging default rates in its sprawling global portfolio of credit cards and other consumer loans. (More on these in a moment.)


* Wells Fargo and Wachovia now make up the nation’s fourth largest bank with combined assets of $1.17 trillion. But in the fourth quarter, they still reported separately, which is illuminating: Even without Wachovia’s troubled assets, TheStreet.com Ratings has downgraded Wells Fargo to a D+. Wachovia, meanwhile, got a D. This tells you that Wells Fargo wasn’t exactly the best merger partner, unless you believe in some bizarre math wherein adding two negatives somehow gives you a positive result.


* SunTrust, with $185 billion in assets, is getting hit hard by the collapse in the commercial real estate. Its Financial Strength Rating is D+.


* HSBC Bank USA has massive credit exposure to derivatives that’s even greater than Morgan’s: 550 percent of risk-based capital. We’re not looking at its larger foreign operations. But the U.S. numbers are ugly enough, meriting a rating of D+.


* Goldman Sachs, which reported for the first time as a commercial bank in the fourth quarter, seems to be taking the biggest risks of all in derivatives. Its total credit exposure is 1,056 percent of capital. Bottom line: It debuts as a bank with a rating of D, on par with Wachovia.

Regional banks: Banking regulators have been largely mute regarding major regional banks. But several are also at risk of failure, including Compass Bank (Alabama), Fifth Third (Michigan), Huntington (Ohio), and E*Trade Bank (Virginia). Primary reason: Massive losses in commercial real estate loans.

Smaller banks: On its “Problem List,” the FDIC reports only 252 institutions with assets of $159 billion. In contrast, our list of at-risk institutions includes 1,816 banks and thrifts with $4.67 trillion in assets. That’s seven times the number of institutions and 29 times more assets at risk than the FDIC admits.


the regulators have an agenda: Instead of protecting the people from bank failures, they’re trying harder than ever to protect failed banks from the people. Specifically …

* They have forever hidden the names of the banks on the FDIC’s “Problem List,” making it almost impossible for average consumers to get prior warnings of troubles.


* They have never disclosed their own official ratings of the banks — the CAMELS ratings — making it difficult for the public to find safe institutions they can trust.


* They have religiously underestimated — or understated — the depth and breadth of the debt crisis.


MORE

[Demeter]

26. Senator's Husband's Firm Cashes in on Crisis

http://informationclearinghouse.info/article22474.htm

-- On the day the new Congress convened this year, Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband's real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.

Mrs. Feinstein's intervention on behalf of the Federal Deposit Insurance Corp. was unusual: the California Democrat isn't a member of the Senate Committee on Banking, Housing and Urban Affairs with jurisdiction over FDIC; and the agency is supposed to operate from money it raises from bank-paid insurance payments - not direct federal dollars.

Documents reviewed by The Washington Times show Mrs. Feinstein first offered Oct. 30 to help the FDIC secure money for its effort to stem the rise of home foreclosures. Her letter was sent just days before the agency determined that CB Richard Ellis Group (CBRE) - the commercial real estate firm that her husband Richard Blum heads as board chairman - had won the competitive bidding for a contract to sell foreclosed properties that FDIC had inherited from failed banks.

• Read the rate list for the FDIC contract from CB Richard Ellis, the firm Sen. Feinstein's husband heads as board chairman. (downloads 4-page pdf)

• Read the correspondence between Sen. Feinstein and FDIC chairman Sheila Bair (downloads 5-page pdf )

About the same time of the contract award, Mr. Blum's private investment firm reported to the Securities and Exchange Commission that it and related affiliates had purchased more than 10 million new shares in CBRE. The shares were purchased for the going price of $3.77; CBRE's stock closed Monday at $5.14.

Spokesmen for the FDIC, Mrs. Feinstein and Mr. Blum's firm told The Times that there was no connection between the legislation and the contract signed Nov. 13, and that the couple didn't even know about CBRE's business with FDIC until after it was awarded.

Senate ethics rules state that members must avoid conflicts of interest as well as "even the appearance of a conflict of interest." Some ethics analysts question whether Mrs. Feinstein ran afoul of the latter provision, creating the appearance that she was rewarding the agency that had just hired her husband's firm.

MUCH MORE

[Demeter]

28. Musings on Structural Challenges to the Financial System

http://www.nakedcapitalism.com/2009/04/musings-on-structural-challenges-to.html

One thing that has me troubled about the financial mess is the degree to which the powers that be are wedded to a system that it clearly broken. In part, that results from financial capture of the government apparatus by the banking industry. But an equally sticky problem is the attachment to a rather recent vision of how the financial system works. And that in turn is oddly reminiscent of destructive patterns in the Great Depression.

If you go back to 1980, the world of finance was very different, The Federal Reserve was considerably larger than any single bank. On balance sheet lending was the norm. Banking was most decidedly not sexy, unless you were Ciitbank, which loved to innovate and push regulatory limits, even though lots of banks then became free riders on its pioneering.

No one in 1980 (outside of MBA programs and certain parts of New York City) knew what an investment banker was. If you used that term with most middle or upper middle class Americans, they would assume it was some sort of glorified stockbroker.

To make a very long story short, securitization changed all that. Banks saw their lunch eaten by investment banks as they were increasingly disintermediated. By 2006, only 15% of the non farm, non-financial credit was via the banking system. What Timothy Geithner called "market based credit" became the norm.

The problem is, as we know, as the model didn't develop as much as devolve. There have been massive information losses. Much of sound banking credit processes has been replaced by sophistry, such as score based credit models that have been demonstrated to perform badly, incomplete loan files (so no one has enough borrower G2 to do updates and triage for mods), a reliance on ratings and hedging in place of credit analysis, even a mortgage registry service that only reduces transparency. And the very worst element is that securiitzation vehicles make debt restructuring, a key element to resolving a financial crisis, well nigh impossible.

And securitization was and remains the epicenter of the crisis. Gillian Tett of the Financial Times tells us:

What is imploding though is the securitisation world. If you exclude agency-backed bonds, in 2006 banks issued about $1,800bn of securities backed by mortgages, credit cards and other debts. Last year, though, a mere $200bn of bonds were sold in markets, and this year market issuance is minimal.


Now as we have said, some shrinkage is necessary. Too many people borrowed too much.

Yet there has been absolutely nothing in the way of seeing whether the model can be fixed, or scrapped. John Dizard suggested last year that central bankers expected the world would revert to more on-balance sheet intermediation, but that would entail even more equity in the banking system than the amount needed to plug the loss holes. And the Treasury and Fed actions, of creating a myriad of guarantees and special facilities, instead says that they are trying to put in place a government backed securitization process (witness in particular how Fannie and Freddie pretty much are the mortgage market these days) in place of its formerly private version.

But the lack of any thought, much the less action, on the securitization front is troubling. And I suspect no real fix is possible.

It's surprising nothing has been done on the rating agency front. That's a contained element. many good proposals have been made, yet not a peep from anyone in authority. If small fry like them can't be reformed, clearly nothing serious is in the offing.

But ex the rating agencies, it would seem at least two things would need to happen, and even then I am not sure either would be sufficient.

One line of thought is that more of the intermediaries need to have some skin in the game by retaining paper they originate, rate, or sell.

But the reason that securitization beat out lending was that it was cheaper. And the big cost of banks holding loans was equity and FDIC insurance. The more players along the food chain have to retain some of the deal, the less favorable the economics, since they will have to put up some equity to support the assets they keep. Some securitization deals might still work even with a higher level of expense, but the market would be smaller.

But of course, that assumes the players do bona fide keep a long position. What's to prevent them from hedging their credit risk? And if they do that, we are back to square zero in terms of fixing incentives.

Problem two is unless I missed it, I have heard no serious suggestions as what restrictions to impose on securitization vehicles and servicers going forward to facilitate mods. One problem now is that deep enough mods aren't being offered (principal reductions have a much higher success rate). Probably more important, mods, just like the lousy credit decisions that helped create this mess, are being done via decision rules using simple borrower metrics rather than case by case assessment. The US has suffered falls in housing values in individual markets in the past that were as severe as the national declines we are witnessing now. I keep hearing from old style bankers that mods were always viewed as the better solution if you has a borrower with some ability to make payments. But they also made those assessments individually and with a knowledge of the community (as in stability of various local employers).

But again, would the securitization model work if you incurred the extra costs to do things right, as in better borrower assessment at the outset, establishment of good loan files (I hear repeatedly that servicers seldom have any good borrower documentation), and required investors to pay the costs needed to do mods? Again, by increasing costs, it would mean fewer deals would "work" from an economic standpoint.

So I would surmise that even if securitization were reformed, the market would indeed be considerably smaller. Paul Volcker thought we needed to roll the clock back and go to more traditional bank lending. It is pretty clear that the rest of Team Obama is not on that page and wants to restore the brave new world of fancy finance ASAP. But I don't see how we get there, save waiting ten years for memories of the problems of this period to fade and the bad practices to start all over again.

Which brings me to the Depression. There are many theories of why it spiraled downward, but the one I find most persuasive was that it was the result of the efforts to restore the gold standard in the mid 1920s (worsened by France pegging the franc too low and accumulating massive gold reserves). The key observation from works by scholars of that era like Peter Temin is that the banking and political leaders of that day felt restoring the gold standard was pro stability, and perhaps even more telling, they were virtually unable to imagine a world without it.

Our paradigm is quite different, but many of the key actors seem hopelessly anchored by it. And I worry that like the Depression, we will have to see it break down completely before we can start to rework it in significant ways.

[Demeter]

30. The Financial Barbarians at the Gate

http://informationclearinghouse.info/article22490.htm



Guns & Butter Interviews financial economist and historian, Dr. Michael Hudson.

"The Financial Barbarians at the Gate" with financial economist and historian, Dr. Michael Hudson. Europe; worsening financial situation and indebtedness; the history of banking and the criminalization of the banking system; tax policy; real estate asset inflation; US imperialism via the monetary system; neoliberal/neofeudal economics; classical political economy; finance capital breaking away from industrial capital; the financial crisis leading to a political crisis; similarities with the Roman Republic; what measures labor should take.

SEE LINK FOR PODCAST

[Demeter]

31. The Pension Killer? by Leo Kolivakis, publisher of Pension Pulse.

http://www.nakedcapitalism.com/2009/04/guest-post-pension-killer.html


Writing in the Financial Post, Stephen Donald, a consulting actuary with Buck Consultants, reports on the pension killer:

When I started my career in 1973, the economy promptly went into a recession. The S&P 500 fell 48% and took four years to get back to break-even. At the end of 1973 near the market peak, Warren Buffet said he could not find any stock bargains and returned investors their money. Companies had large deficits in their pension plans and had to start making large contributions, and that was before solvency funding! 2009 is déjà vu with the average solvency-funded ratio below 70% and many large well-known companies on the brink of chapter 11 bankruptcy. How did pension plans get into this mess?

Back in the ’70s, actuaries assumed conservative discount rates at least 1% less than expected, and this represented a margin in the order of 20%. At the same time, the market woes of the mid-’70s resulted in large company contributions going into their pension plans. Then we had a string of remarkable investment returns, and in the early ’80s pension plans returned to surpluses — and large ones at that. Some plans were wound up for business reasons and, to the shock of those companies, trust laws were interpreted by the courts such that the surplus belonged to the members.

Actuaries had unwittingly contributed to this situation by acting in a prudent, conservative manner. Prudent funding calls for the deliberate build-up of surplus during the good times to be used in the bad times. But this only works if you retain access to that surplus. From that point on plan sponsors were unwilling to fund on a conservative basis. The thinking was that it would be better to fund the minimum knowing that bad times would require large contributions — it would be an improvement over the risk of carrying large inaccessible surpluses.

Plan sponsors owned the deficits while plan members owned the surpluses. Calls from various sources went out to the provincial governments to change the legislation but to no avail. This lack of action on the part of the provincial governments is the single most important cause of our pension funding problems today.

Through the Income Tax Act the federal government also restricted surplus by effectively limiting surplus in mature plans to 10% of the liabilities. In spite of setting aggressive assumptions, many plans still ended up with surpluses and as soon as these hit 10% no further contributions were allowed.

For 20 years during the 1980s and ’90s, interest rates were high and investment returns were double-digit — it was a remarkable period for pension plans. Gradually, plan sponsors increased their assumed discount rates in their valuations to 8% and higher. This basically cut pension costs in half and companies that didn’t do the same were at a competitive disadvantage. There was tremendous peer pressure on companies, actuaries and plan members (unions) to follow suit. And after 5 to 10 years of this you risked ridicule if you were still using a discount rate of 5%.

Permanent improvements to plans were implemented in this era of falsely cheap pension benefits. Plan sponsors are now realizing that cutting back on these benefits is very difficult and, if done on a prospective-only basis, will take many years to have significant impact.

Historically over the long term, stocks have significantly outperformed fixed income assets, so the common asset mix of pension plans has been 60% equities, 40% bonds. While long-term bonds are similar in nature to pension liabilities and therefore rise and fall at the same time, stocks do not. With stocks, the value of the liabilities can go up at the same time as the stock market drops. With a 60%-40% asset mix, prudence would dictate a margin of at least 30%, but that ran smack into the Surplus-Deficit Asymmetry conundrum discussed above.

Plan sponsors had two choices. They could retain the 60%-40% asset mix but fund at the minimum and run the risk of deficits in market down turns. Most of them never believed that their companies would ever go bankrupt and so they did not think they were putting their members’ financial lives at risk.

Or they could invest solely in fixed income assets. This removed the asset-liability mismatch and resulting windup risk but it also meant lower long-term investment returns. Lower returns meant either increased contributions in the order of 30% or 30% lower benefits or some combination thereof.

Peer pressure and follow-the-herd thinking caused virtually all companies to choose the 60%-40% asset mix with no or very little margin.

The combined impact of the forces above is that pension plans entered one of the worst economical downturns in history with no safety margins whatsoever. But the same thing happened in other areas. Once-proud companies that have been around for 80 years or more are suddenly on the verge of bankruptcy — they also entered this economic downturn with no significant reserves. In less than a year they are lined up for bailouts. The Canadian banks are one of the few exceptions and that is thanks to regulations imposed on them, not to the prudent wise actions of their management.

Pension plans have an investment horizon of 50-plus years, so it is hard to argue that they should not invest in stocks. If they do, then safety margins must be incorporated. But for this to work, the provincial governments have to change once and for all the surplus ownership rules — until that is done there will be no solution to the decline of defined benefit pension plans...MORE

[Demeter]

35. Source of Swine Flu May Be U.S. Hog Production Facility in Mexico

http://themoderatevoice.com/30074/source-of-swine-flu-may-be-us-hog-production-facility-in-mexico/



Posted By KATHY KATTENBURG On April 26, 2009 @ 8:28 pm In Agriculture & Food Policy, Animals, Business, Corporations, Disease, Health, Mexico, Politics, Society, USA | 1 Comment

A publication called Grist is reporting that the swine flu outbreak may have been triggered by poor hygienic practices at the Perote, Vera Cruz, Mexico hog farming facilities of Smithfield Farms <1>. Smithfield Farms is the “world’s largest hog producer and pork packager”:

On Friday, the U.S. disease-tracking blog Biosurveillance <2> published a timeline of the outbreak containing this nugget, dated April 6 (major tip of the hat to Paula Hay, who alerted me to the Smithfield link on the Comfood listserv and has written about it <3>on her blog, Peak Oil Entrepreneur) <4>:

Residents believed the outbreak had been caused by contamination from pig breeding farms located in the area. They believed that the farms, operated by Granjas Carroll, polluted the atmosphere and local water bodies, which in turn led to the disease outbreak. According to residents, the company denied responsibility for the outbreak and attributed the cases to “flu.” However, a municipal health official stated that preliminary investigations indicated that the disease vector was a type of fly that reproduces in pig waste and that the outbreak was linked to the pig farms. It was unclear whether health officials had identified a suspected pathogen responsible for this outbreak.

From what I can tell, the possible link to Smithfield has not been reported in the U.S. press. Searches of Google News and the websites of the New York Times, Washington Post, and Wall Street Journal all came up empty. The link is being made in the Mexican media, however. “Granjas Carroll, causa de epidemia en La Gloria,” declared <5> a headline in the Vera Cruz-based paper La Marcha. No need to translate that, except to point out that La Gloria is the village where the outbreak seems to have started. Judging from the article, Mexican authorities treat hog CAFOs with just as much if not more indulgence than their peers north of the border, to the detriment of surrounding communities and the general public health. Get this:

De acuerdo con uno de los habitantes de la comunidad, Eli Ferrer Cortés, los desechos fecales y orgánicos que produce Granjas Carroll no son tratados adecuadamente, lo que genera contaminación del agua y del viento en la region.

My rough translation: According to one community resident, the organic and fecal waste produced by Granjas Carrol isn’t adequately treated, creating water and air pollution in the region. I witnessed—and smelled—the same thing <6> in Hardin County, Iowa, a couple of years ago, another area marked by intensive industrial hog production. The article goes on to say that area residents have long complained of “fetid odors” in the air and water, and swarms of flies hovering around waste lagoons. Like their counterparts who live in CAFO-heavy U.S. areas, they also complain of respiratory ailments. Now, with 30 percent of the area’s residents now infected with the virulent flu bug, people are demanding that state and federal authorities inspect hog operations there. So far, reports La Marcha, the response has been: nada.

[willing dwarf]

39. A classic case of over-development

Where there is over-development, there is overcrowded production. Where there is overcrowding, there is disease. The new Swine Flu may some day be called the Over-development Flu

[AnneD]

67. I have an e-mail out ....

to one of my Micro friend that specializes in animal husbandry. If you are familiar with modern Corporate animal farm techniques would not be surprised as to the source of this new pathogen.

When I think of the way my family raised and butchered animals and the way it is done now-all you can do is shake your head in disgust. Yes-the animal met the same end but I can't but think that ours had happier lives. It was a while before they met their end. Chickens that were past their egg laying prime showed up on the Sunday dinner table, the nasty tempered rooster got stewed, pigs had several good year of fun, and the dairy cows lived even longer. My uncles dispatched said animals with respect and mercy. No suffering, no panic and they were as clean a kill as possible. The animals sacrifice was appreciated. And BTW, we really ate less meat than you would think. Eggs, butter, and milk were of greater value to us. We sold most offspring for cash.

[Ghost Dog]

71. bingo.

More on this later.

[burf]

42. Pigs might be getting a bad rap on swine flu

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3850523

G'day everyone!

[Hugin]

49. Thank you for posting that, burf!

Damn, what it takes to get a few -facts- around here. :crazy:

[DemReadingDU]

52. And where is the discussion about torture?

It's all about the North American influenza, or whatever it's called. And sure the flu can be deadly to some, but I'm wondering if the potential epidemic was hyped to get torture off the news?

spelling

[AnneD]

58. I don't think so...

and I'm the first anymore to get out the :tinfoil: :hide:

Some facts or strong hypothesis:

1) You can still have bacon on your cheese burger and not get the flu.
yeah, it is swine flu that jumped the species barrier and now is spreading from human to human contact. Only if you are going to make you bacon from scratch and your pigs look sick should you worry.

2) I don't think it is a man made virus. While some folks are clever-they are not as clever as mother nature. Life will find a way. I rest my case.

3) It appears that so few folks in this country don't give a Damn about torture, corruption in business, government, banking, or any number of things so they don't need to create anything to distract us. Sad but true. A 10 million gigawatt voltage cattle prod won't get some folks to move into action.

[Demeter]

74. We Don't Need to Discuss It Now--The Machinery Is Ramping Up to Prosecute

and while we need to keep an eye on it, the initial resistance has melted away.

[Demeter]

36. Money for Nothing By PAUL KRUGMAN

http://www.nytimes.com/2009/04/27/opinion/27krugman.html?_r=1

On July 15, 2007, The New York Times published an article with the headline “The Richest of the Rich, Proud of a New Gilded Age.” The most prominently featured of the “new titans” was Sanford Weill, the former chairman of Citigroup, who insisted that he and his peers in the financial sector had earned their immense wealth through their contributions to society.

Soon after that article was printed, the financial edifice Mr. Weill took credit for helping to build collapsed, inflicting immense collateral damage in the process. Even if we manage to avoid a repeat of the Great Depression, the world economy will take years to recover from this crisis.

All of which explains why we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels.

Why is this disturbing? Let me count the ways.

First, there’s no longer any reason to believe that the wizards of Wall Street actually contribute anything positive to society, let alone enough to justify those humongous paychecks.

Remember that the gilded Wall Street of 2007 was a fairly new phenomenon. From the 1930s until around 1980 banking was a staid, rather boring business that paid no better, on average, than other industries, yet kept the economy’s wheels turning.

So why did some bankers suddenly begin making vast fortunes? It was, we were told, a reward for their creativity — for financial innovation. At this point, however, it’s hard to think of any major recent financial innovations that actually aided society, as opposed to being new, improved ways to blow bubbles, evade regulations and implement de facto Ponzi schemes.

Consider a recent speech by Ben Bernanke, the Federal Reserve chairman, in which he tried to defend financial innovation. His examples of “good” financial innovations were (1) credit cards — not exactly a new idea; (2) overdraft protection; and (3) subprime mortgages. (I am not making this up.) These were the things for which bankers got paid the big bucks?

Still, you might argue that we have a free-market economy, and it’s up to the private sector to decide how much its employees are worth. But this brings me to my second point: Wall Street is no longer, in any real sense, part of the private sector. It’s a ward of the state, every bit as dependent on government aid as recipients of Temporary Assistance for Needy Families, a k a “welfare.”

I’m not just talking about the $600 billion or so already committed under the TARP. There are also the huge credit lines extended by the Federal Reserve; large-scale lending by Federal Home Loan Banks; the taxpayer-financed payoffs of A.I.G. contracts; the vast expansion of F.D.I.C. guarantees; and, more broadly, the implicit backing provided to every financial firm considered too big, or too strategic, to fail.

One can argue that it’s necessary to rescue Wall Street to protect the economy as a whole — and in fact I agree. But given all that taxpayer money on the line, financial firms should be acting like public utilities, not returning to the practices and paychecks of 2007.

Furthermore, paying vast sums to wheeler-dealers isn’t just outrageous; it’s dangerous. Why, after all, did bankers take such huge risks? Because success — or even the temporary appearance of success — offered such gigantic rewards: even executives who blew up their companies could and did walk away with hundreds of millions. Now we’re seeing similar rewards offered to people who can play their risky games with federal backing.

So what’s going on here? Why are paychecks heading for the stratosphere again? Claims that firms have to pay these salaries to retain their best people aren’t plausible: with employment in the financial sector plunging, where are those people going to go?

No, the real reason financial firms are paying big again is simply because they can. They’re making money again (although not as much as they claim), and why not? After all, they can borrow cheaply, thanks to all those federal guarantees, and lend at much higher rates. So it’s eat, drink and be merry, for tomorrow you may be regulated.

Or maybe not. There’s a palpable sense in the financial press that the storm has passed: stocks are up, the economy’s nose-dive may be leveling off, and the Obama administration will probably let the bankers off with nothing more than a few stern speeches. Rightly or wrongly, the bankers seem to believe that a return to business as usual is just around the corner.

We can only hope that our leaders prove them wrong, and carry through with real reform. In 2008, overpaid bankers taking big risks with other people’s money brought the world economy to its knees. The last thing we need is to give them a chance to do it all over again.

[Pale Blue Dot]

38. Summers Says U.S. Economy to Decline ‘For Some Time’

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9sjzp1FKCmY

April 26 (Bloomberg) -- The U.S. economy will continue to contract “for some time to come,” said Lawrence Summers, director of the White House National Economic Council.

“I expect the economy will continue to decline,” with “sharp declines in employment for quite some time this year,” Summers said today on “Fox News Sunday.”

The International Monetary Fund, which held meetings last week in Washington, cut its forecast for each of the Group of Seven economies for this year and next. The IMF, established in 1944 to aid countries in financial crisis, said the U.S. economy would shrink 2.8 percent this year and have no growth in 2010, with unemployment rising to 10.1 percent.

Summers said the economy will pick up as manufacturers rebuild depleted inventories and consumers replace aging cars. “These imbalances can’t continue forever,” he said. “When they are repaired they will be a source of impetus for the economy.”

[DemReadingDU]

41. Summers said the economy will pick up

Summers said the economy will pick up as manufacturers rebuild depleted inventories and consumers replace aging cars.


Excuse me...How will consumers replace anything if they don't have a job.
:eyes:

[saigon68]

43. He is clueless to the struggles of the unemployed.

[Tansy_Gold]

44. And the fact that he's so clueless should (but won't) be cause

for his immediate removal from any advisory position in the administration.

[BelgianMadCow]

51. IMF split on recession exit strategy / Can the IMF now feed the world / IMF to issue obligations

The G20 happy face can't keep the tug of war from showing up...

IMF split on recession 'exit strategy'

• Strauss-Kahn fears disagreement on withdrawing stimulus packages
• European governments resist changes in IMF structure

Cracks were today appearing in the united front presented at the London G20 Summit, as the International Monetary Fund failed to deliver reforms of global finance and governance.

Finance ministers meeting in Washington disagreed over when it would be safe to withdraw recession-busting policies, and were unable to finalise a $500bn (£350bn) boost to the IMF's resources.

more: http://www.guardian.co.uk/world/2009/apr/26/washington-imf-split-on-recession-policies

Can the IMF now feed the world?

The London G20 summit tripled the resources of the International Monetary Fund and made it a major force again, responsible for saving national economies hit by the global crash. But given its recent track record, will its policies do more harm than good? Heather Stewart reports from Washington
...
Brown had hoped to reach a grand bargain on the future of the Washington financial institutions at the G20 - indeed, in the early planning stages, the London summit was envisaged as a new Bretton Woods, echoing the gathering after the second world war that set up the IMF and the World Bank. Britain was optimistic that emerging economic powers, especially China, with its huge foreign currency reserves, could be persuaded to stump up more cash for development in exchange for more influence in decision-making.

What emerged was a giant sticking plaster. There was little new up-front money: much of the trumpeted trebling of IMF resources is still to be found, and the inevitable arguments about influence at the table in Washington were left to another day. China and Russia said they wanted to see a serious examination of the problems caused by the dominance of the dollar - and by implication the US - over the world economy; everyone else quietly ignored them.

In fact, the G20 gave Brown himself the job of coming up with sealing the next stage in the process. He has promised to "consult widely in an inclusive process and report back to the next meeting with proposals for further reforms to improve the responsiveness and adaptability" of the Bank and the IMF.

more: http://www.guardian.co.uk/business/2009/apr/26/imf-g20-lending-global

Very interesting article with views from a lot of perspectives. Check out the Bob Geldof one - ouch! Also has a reality check on IMF behaviour in the past and up to the present.

And the last one, which made me check elsewhere about the IMF meeting, is from our local financial paper, so I translated it (didn't find another link for it) on edit: Ozy's post number 4 also has a snip about IMF-issued obligations..:blush:

IMF considers issueing obligations

The IMF considers selling obligations to a number of emerging economies, amongst other Brazil. The proceeds of that sale will be used to combat the economic crisis. This came up during a meeting of the World Bank and the IMF this weekend in Washington. The IMF has never issued obligations before.

Amongst others, Brazil and China have shown interest. With the issuance of obligations member states get a new way to provide the IMF with cash. The fund can use this cash to finance more loans and to help member states cope with the economical crisis.
...
The brazilian finance minister Guido Mantega calls the proposal on the table now 'insufficient' and 'premature'. Brazil wants the obligations to have a higher return than American Treasuries. Mantega also states a contribution by the 4 largest emerging economies will depend on internal IMF reform.

source: http://www.tijd.be/nieuws/economie-financien/IMF_overweegt_uitgifte_van_obligaties.8175265-600.art

hmmmmm...so the debt would be issued by the IMF, and be more profitable than Treasuries...this sounds pretty important to me, can some of you make sense of this?

regards
bmc

[CatholicEdHead]

57. More humor

[MARALE]

59. I thought you guys would enjoy this one

[antigop]

60. Krugman humor: Trickle-down economics

http://krugman.blogs.nytimes.com/2009/04/26/trickle-down-economics/

Check out this photo from today’s Times, about Iceland’s rejection of the free-marketeers.
http://www.nytimes.com/imagepages/2009/04/26/world/26icelandB.ca0.ready.html

[Demeter]

63. That Photo Says It All

Now there's a bunch of criminals won't be home ever again.

[ozymandius]

68. I'm going to suggest that idea to a bar owner I know.

Too bad the men's room only has three urinals.

[ozymandius]

69. Any suggestions for American feces -er- faces?

I will happily pay to laminate photographs of some of our favorite Banksters.

Greenscam?

Bernanke?

Thain?

[Demeter]

73. Only if You Have a Comfort Station Concession at the Major Stadiums

or Penn Central, or some similarly large venue.

After all, it wouldn't do to snub anyone.

[BelgianMadCow]

65. UPDATE 1-US Treasury April-June borrowing to hit $361 bln

WASHINGTON, April 27 (Reuters) - The U.S. Treasury Department said on Monday it expects to borrow $361 billion of marketable debt in the April-June quarter, up $196 billion from earlier estimates, as government spending soars in the deepest and longest recession in decades.

The amount is a record for the quarter, in which borrowing usually diminishes because most Americans' annual income taxes are filed by April 15. Borrowing needs include $200 billion to support Federal Reserve liquidity programs aimed at reviving lending after the housing market crash and surge in credit defaults.

The previous record borrowing for the April-June quarter is $60 billion in 2003.

The Treasury cited weak revenues and greater spending to support economic recovery programs as among reasons for greater borrowing needs.

a bit more: http://www.reuters.com/article/marketsNews/idUSN276107720090427

There we go again with "reviving lending"

How long till the pseudomedics stop trying to shock the corpse back to life?:eyes:

[Demeter]

76. How Long before Obama Throws the Bums Out?

It's not like the public can evict the banksters. All we can do is refuse to do business with the bastards--close accounts, sell stocks, cancel credit cards. And vote out the boughten Congress.

[Ghost Dog]

77. The Revolution is coming, mes amis, mis amigos, my friends;

Out of the South and the East.

Based on the very best Northern and Western ideas,






but with rhythm.

[Tansy_Gold]

79. ¿Es verdad?

I started to write some sappy quasi-poetry in Spanish, but I'm no good at it even in English, so why bother?

A peaceful revolution, with laughter and dancing and no fighting and no death would be so nice, but it's just a dream, an illusion, a midnight dreamsong that dies by afternoon because we forget the words over lunch.

desde Nocturno a Rosario, por Miguel Acuña
A veces pienso en darte
mi eterna despedida,
borrarte en mis recuerdos
y hundirte en mi pasión
mas si es en vano todo
y el alma no te olvida,
¿Qué quieres tú que yo haga,
pedazo de mi vida?
¿Qué quieres tu que yo haga
con este corazón?


Para un amante inolvidable o un sueño inacabado.


Tansy Gold

[InkAddict]

81. Officials sweeten deal for Chase

http://www.dispatchpolitics.com/live/content/local_news/stories/2009/04/28/copy/chase_jobs_print.ART_ART_04-28-09_A1_E9DMHIO.html?adsec=politics&sid=101

Financial giant gets tax incentives to possibly bring 1,150 jobs here

Ohio officials took a significant step forward in their bid to bring 1,150 new JPMorgan Chase jobs to the Columbus area by approving a $14 million tax incentive yesterday.

City and state officials have been courting Chase in recent months as the company looks to consolidate operations following the purchases of Washington Mutual and Bear Stearns.

Chase has not committed to bringing the jobs here, and Ohio is competing against Michigan, Texas, Louisiana and New York.



Now manhandling at the State level...