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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:25 AM
Original message
STOCK MARKET WATCH, Tuesday June 2
Source: du

STOCK MARKET WATCH, Tuesday June 2, 2009

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

AT THE CLOSING BELL ON June 1, 2009

Dow... 8,721.44 +221.11 (+2.60%)
Nasdaq... 1,795.34 +54.35 (+3.06%)
S&P 500... 275.55 +14.40 (+5.31%)
Gold future... 980.00 -0.30 (-0.03%)
10-Yr Bond... 3.67 +0.21 (+6.07%)
30-Year Bond 4.53 +0.19 (+4.47%)




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


Market Conditions During Trading Hours



GOLD, EURO, YEN, Loonie and Silver



Handy Links - Market Data and News:
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    Brad DeLong    Bonddad    Atrios    goldmansachs666

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Read more: du
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hamerfan Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:27 AM
Response to Original message
1. Morning, Ozy!
:hi:
Ready for another wonderful day in make-believe land!
hamerfan
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:30 AM
Response to Reply #1
3. G'morning
:donut: :donut: :donut:

Sure, I'm ready for another ride through Mortville. It will be short in duration for me as I have jury duty today.

:hi:
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:13 AM
Response to Reply #3
42. Nice cartoon... Except, I think she's trying to say... "Who's going to pay for it all?"
Not that she "wants to go to the mall".

A cry for single-payer healthcare, perhaps? ;)
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:31 AM
Response to Reply #42
49. Very Clever, Hugin!
and much more believable.
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:52 AM
Response to Reply #49
52. The Congress needs to work on their Listening Skills.
Edited on Tue Jun-02-09 10:54 AM by Hugin
The majority of the people keep saying (very clearly, I might add) that we want SINGLE PAYER HEALTH CARE.

Somehow, whenever Congress repeats our wishes back, it comes out... "The people want the status-quo with a few tweaks and the ability for the Insurance Cos to dump high risk patients with pre-existing conditions (read: Anybody who really NEEDS health insurance claims) on the Government.)"

It's this sort of paternalistic condescension that has me very irritated at our Legislative Branch at the moment... Watching them tut-tut experts who really know what they're talking about and then go off and serve what is in only the special-interests' favor has me so nauseated at the whole process, I can hardly look anymore.

Okay... That's my rant for this week.

Tune in next week when I take on the Gradualist School of Scientists and their blanket rejection of Punctuated Equilibrium. ;)



(Edit: Doesn't it seem kind of redundant to put an apostrophe on interests'?)
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:28 AM
Response to Original message
2. Market Observation
Auto Companies
Forensic Examination of Their Woes
BY ROB KIRBY

A couple of weeks ago in this space in an article titled, Theater of the Absurd: a view from the inside, a case was made that Interest Rate Derivatives, not credit derivatives, are the root cause for the macro economic problems our global financial system is currently facing.

The gist of the piece explained how interest rate swaps (IRS), specifically, have been utilized by agents of the Federal Reserve (primarily J.P. Morgan and Goldman Sachs) to neuter usury. Because IRS greater than 3 years duration typically have U.S. government bond transactions embedded in them the cancerous growth of outstanding notional amounts of these instruments (beginning mid 1990s time frame), absent end-user demand effectively gave these players (the Fed in drag) control of the long end of the interest rate curve, beyond the historic, accepted and generally understood purview of the Fed namely, the short term Fed Funds (overnight) rate.

Prior to the proliferation and explosive growth of interest rate swaps, values at the long end of the interest rate curve were determined by a breed of investor / trader known as the bond vigilantes who regularly enforced corrective and sometimes bitter discipline on the bond markets when naturally spend-thrift governments incurred too much debt. The IRS edifice that was created was so overwhelming and created so much artificial demand for government bonds - it steamrollered the bond vigilantes into extinction.

....

The Auto Companies' Problems are Not Really of Their Own Making

Ive written about this before but it bears repeating. Today, General Motors filed for bankruptcy protection. Their demise has been widely followed for years with a great deal of commentary regarding their sinking fortunes centered on legacy costs or spiraling expenses being borne by their pension plan.

http://www.financialsense.com/Market/wrapup.htm
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:31 AM
Response to Original message
4. Today's Reports
10:00 Pending Home Sales Apr
Briefing.com NA
Consensus 0.5%
Prior 3.2%

14:00 Auto Sales May
Briefing.com NA
Consensus NA
Prior 3.2M

14:00 Truck Sales May
Briefing.com NA
Consensus NA
Prior 3.8M

http://www.briefing.com/Investor/Public/Calendars/Econo...
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:40 PM
Response to Reply #4
66. reports:
Chrysler U.S. May sales drop 47% to 79,010 units
3:05pm Today

GM May car sales drop 38%; light trucks off 21%
1:53pm Today

Toyota U.S. May sales fall 40.7% to 152,583 units
1:51pm Today

Honda U.S. May sales fall 41.5% to 98,344 units
1:35pm Today

Daimler May U.S. sales fall 33.4% to 16,303 units
11:40am Today

U.S. April pending home sales index up 6.7%
10:00am Today

U.S. pending home sales index up 3.2% in past year
10:00am Today
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:33 AM
Response to Original message
5. World stocks slip after recent gains
LONDON (Reuters) - World stocks edged lower on Tuesday after a buoyant session the day earlier and the dollar climbed off its lows against major currencies.

MSCI's all-country world stock index (^MIWD00000PUS - News) was down 0.2 percent, but only after Monday's gains that took it to new 2009 highs.

European shares were flat after opening lower. The FTSEurofirst 300 index of top European shares (^FTEU3 - News) closed at its highest level in five months on Monday.

"For this morning it is a realistic assumption that investors take some money off the table due to the massive increases yesterday," Roger Peeters, strategist at Close Brothers Seydler, wrote in a note.

Japan's Nikkei stock average (Osaka:^N225 - News) rose 0.3 percent, however, the second straight day it has closed at 8-month highs.

Investors have been lifted recently by signs that the global economy is on the mend. The latest came from Australia on Tuesday, which had better-than-expected net exports and rise in monthly new home approvals.

"Economic indicators are now showing improvement from the worst period but until we see proof of a recovery in company results, it'll be difficult for the market to rise strongly and we're still a long way from the next earnings period," said Takashi Ushio, head of investment strategy at Marusan Securities.

/... http://finance.yahoo.com/news/Asian-shares-hit-2009-hig...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:35 AM
Response to Reply #5
7. European shares fall, led by Barclays plunge
FRANKFURT, June 2 (Reuters) - European shares declined on Tuesday, led lower by banks as traders said Abu Dhabi had sold about 3.5 billion pounds of shares in Barclays (BARC.L), while investors also pointed to profit taking after Monday's rally.

At 0848 GMT, the FTSEurofirst 300 index of top European shares was down 0.2 percent at 884.61 points after briefly turning positive.

...

Barclays (BARC.L) plunged 13.8 percent as traders said Abu Dhabi government-owned International Petroleum Investment Company (IPIC) sold about 3.5 billion pounds ($5.74 billion) of shares in the British bank at 267 pence each, a 16 percent discount to Monday's close.

"The ice continues to be thin, and there is a possibility that the market will continue to fall," said Hans-Juergen Delp, equity market strategist at Commerzbank in Frankfurt. "Basically, the mood has not changed since yesterday; no one really wants to go into the market," he added.

Roger Peeters, strategist at Close Brothers Seydler pointed to profit taking after yesterday's massive gains.

Banks took most points off the FTSEurofirst 300 index, and the DJ Stoxx Banks Index .SX7P was the top sectoral decliner, down 1.5 percent.

Deutsche Bank (DBKGn.DE), Societe Generale (SOGN.PA), Banco Santander (SAN.MC) and Royal Bank of Scotland (RBS.L) all fell between 0.6 and 2.5 percent.

...

Gamesa (GAM.MC) plunged 5.8 percent after Spanish power firm Iberdrola (IBE.MC) said Morgan Stanley had placed 10 percent in the company.

On the upside, the DJ Stoxx Cars Auto Index .SXAP was the top sectoral gainer, up 3 percent, with BMW (BMWG.DE), Daimler (DAIGn.DE), Porsche (PSHG_p.DE) and Fiat (FIA.MI) up 0.7 to 3.6 percent.

Europe's biggest home improvement retailer Kingfisher (KGF.L) also gained 6.6 percent after the company delivered forecast-beating first-quarter profits.

...

Across Europe, Britain's FTSE 100 .FTSE was down 1.2 percent, Germany's DAX .GDAXI was down 0.1 percent and France's CAC .FCHI was down 0.5 percent.

/... http://www.reuters.com/article/marketsNews/idCAL2100321...
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Ghost Dog Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:40 AM
Response to Reply #5
10. U.S. stock index futures point to lower open
* U.S. stock index futures pointed to a mostly lower open on Tuesday, on profit taking, as the market gives back some of the previous session's strong gains.

* At 0843 GMT, futures for both the Dow Jones DJc1 and S&P 500 SPc1 were down 0.2 percent; those for the Nasdaq NDc1 were flat.

* Pending sales of previously owned homes are expected to have risen 0.5 percent in April, according to a Reuters poll. The National Association of Realtors Pending Home Sales Index rose 3.2 percent to 84.6 in March. * There are no major U.S. companies set to report.

* Improving confidence may lessen U.S. banks' interest in programmes designed by the government to reduce toxic assets on their balance sheets, U.S. Treasury Secretary Timothy Geithner told CNBC during a visit to Beijing.

* SanDisk Corp (SNDK.O), readying a major foray into the booming market for notebooks or mini-laptop computers, launched memory chip products targeted at users of the light, portable PCs.

* The FTSEurofirst 300 .FTEU3 index of top European shares was down 0.2 percent at 884.51 points. Some markets, such as Switzerland, did not trade on Monday and were catching up with the rally in that session, when the index gained 2.8 percent. * U.S. stocks rose on Monday, sending the S&P 500 .SPX to its highest close in seven months, as reassuring economic data reinforced hopes that demand will stabilize, while General Motors' (GM.N) long-expected bankruptcy filing ended uncertainty about the automaker's fate.

* However, American Express Co (AXP.N) and JPMorgan Chase & Co (JPM.N) fell in after-hours trading on plans to raise equity.

/. http://www.reuters.com/article/marketsNews/idAFL2393485...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:35 AM
Response to Original message
6. Oil slides below $68 as investors eye inflation
SINGAPORE Oil prices slipped below $68 a barrel Tuesday in Asia as traders took profits after recent gains on speculation that a massive global fiscal stimulus could spark an economic recovery and inflation.

Benchmark crude for July delivery was down 78 cents to $67.80 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. On Monday, the contract rose $2.27 to settle at $68.58, the highest close since early November.

Investors have been buying commodities, traditionally seen as a hedge against inflation, on worries that this year's huge fiscal and monetary easing around the world could eventually send prices soaring.

....

In other Nymex trading, gasoline for June delivery was steady at $1.92 a gallon and heating oil fell 1.21 cents to $1.76 a gallon. Natural gas for June delivery slid 6.6 cents to $4.18 per 1,000 cubic feet.

http://news.yahoo.com/s/ap/oil_prices
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 01:27 PM
Response to Reply #6
55. Gasoline at $2.80/gallon here (Southeast Michigan)
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 04:32 PM
Response to Reply #55
61. $2.85 in AnnArbor, Because Unemployment is Only 8+%
until the GM plant in Ypsi is shut down forever....
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:36 AM
Response to Original message
8. dollar watch


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

Last trade 79.110 Change -0.069 (-0.09%)

U.S. Dollar Pulls Back Across the Board Following Comments From Secretary Geithner

http://www.dailyfx.com/story/market_alerts/fundamental_...

The dollar experienced short covering activity in early European trade after U.S. Treasury Secretary Geithner offered more soothing words on China's appetite for U.S. Treasury Securities overnight and a Chinese official was quoted in the FT stating that there is little alternative to the dollar in reference to reserve holdings. A combination of dollar supportive comments and consolidation across European indices weighed on the commodity bloc and emerging market currencies. However, the move ran its course and dollar supply came back ahead of the N.Y. open as the Kremlin touted the idea of a supra-national world currency that may discussed as the BRIC summit this month. EUR-USD traded around 1.4200 and Cable remained in close proximity to 1.6400 after a Middle Eastern account was a good buyer from the 1.6325 lows. Elsewhere, USD-JPY traded in to 96.00 after interbank sales, while the JPY crosses found support on dips, but remained off their recent peak amid general consolidation.

...more...


Forex Traders to See High Event Risk Amidst Four Rate Decisions and NFPs

http://www.dailyfx.com/story/bio1/Forex_Traders_to_See_...

The Australian dollar will see the first of the four central bank decisions we'll see this week at 00:30 ET, but the currency's reaction will have more to do with what the Reserve Bank of Australia (RBA) says, rather than what they do.

The US dollar, euro, British pound, Australian dollar, and Canadian dollar all face very high event risk this week due to employment reports and a total of four rate decisions. Among the central banks that are meeting, including the RBA, BOE, ECB, and BOC, none are expected to reduce rates, but there is still the question of their policy bias going forward, especially when it comes to credit and quantitative easing.

• Reserve Bank of Australia (RBA) Rate Decision – June 2
The Reserve Bank of Australia is anticipated to leave their cash rate target unchanged at 00:30 ET on Tuesday for the second straight month at 3.00 percent, and the Australian dollar may only respond to a surprise rate cut or a biased monetary policy statement. After the central bank’s last meeting, RBA Governor Glenn Stevens said that future rate cuts would be based on “how economic and financial conditions unfold, and how they impinge on prospects for a sustainable recovery in economic activity.” As a result, it will be important to look to Stevens’ statement, as signs that the economy or financial markets are not holding up strongly enough for the RBA’s liking may suggest that the central bank will consider cutting the cash rate target again, and this news could weigh on the Australian dollar. On the other hand, indications of a broadly neutral bias and comments suggesting that 3.00 percent is essentially the floor for the cash rate target could support the currency.

• Bank of England (BOE) Rate Decision – June 4
The Bank of England is expected to leave rates unchanged for the third straight month on June 4 at 7:00 ET at an all-time low of 0.50 percent. Based on the BOE’s last policy statement and the minutes from the meeting, we know that the central bank expanded their quantitative easing (QE) program by 50 billion pounds to 125 billion pounds (which happened to be by a unanimous vote), that the drop in Q1 GDP of -1.9 percent was worse than expected, and that CPI will likely will be below the BOE’s 2 percent inflation target in the medium term. The minutes also revealed that some members thought that “a case could be made for a larger stimulus,” but the high uncertainty of QE led them to believe that there was “no pressing need for the larger extension” at that point. Ultimately, how the British pound responds will likely depend on the BOE’s QE stance. Signs that the BOE may increase their gilt purchases could weigh heavily on the British pound, especially against the euro, while the opposite (steady rates, no QE expansion) could provide a boost to the UK’s currency, though the markets are just as likely to show no reaction in this case.

• European Central Bank (ECB) Rate Decision – June 4
According to a Bloomberg News poll of economists, the ECB will leave rates unchanged at 1.00 percent on Thursday morning. However, where the currency ends the day may have more to do with what ECB President Jean-Claude Trichet says during his post-meeting press conference at 08:30 ET. Indeed, in May the ECB announced that they would buy 60 billion euros worth of covered bonds issued in the Euro-zone, but that details wouldn’t be released until after this upcoming meeting. As a result, much attention will be paid to which bonds will be bought and how the ECB plans on going about buying them, as direct buying from issuers would effectively supply them with direct funding, whereas the purchase of existing covered bonds would support prices and drive down yields.

• Bank of Canada (BOC) Rate Decision – June 4
The Canadian dollar could see a pickup in volatility on Tuesday at 9:00 ET as the Bank of Canada is expected to leave rates unchanged at 0.25 percent, following their surprise 25 basis point reduction on April 21. During that April meeting, the BOC made it clear that they intended to leave rates at that level though June 2010, but a bombshell came from the BOC’s Monetary Policy Report a few days later, as they left the door open to quantitative easing (QE) and credit easing if nominal interest rates start to fall below zero. Indeed, the Bank stated that while they could cut rates to zero in theory, it would ultimately "eliminate the incentive for lenders and borrowers to transact in markets, especially in the repo market." As it stands, core CPI has held at a fairly robust 1.8 percent in April, suggesting that inflation remains high enough to suggest that QE will not be on the way anytime soon.

• Canadian, US Employment Reports (MAY) – June 5
At 7:00 ET, the Canadian net employment change is forecasted to have fallen by 40,000 during May following the surprise surge we saw in April. Furthermore, the unemployment rate is anticipated to have risen to match July 1998 high of 8.3 percent from 8.0 percent. Since the employment change tends to be a very volatile release, this should have the greater impact on the Canadian dollar, with a sharper than expected drop likely to weigh on the currency and an unexpected positive result likely to push it higher.

Though not always a reliable market-mover, the 8:30 ET release of US NFPs is sure to garner a lot of attention as the report is forecasted to show that the economy lost 521,000 jobs in May. This will mark the seventeenth straight month of job losses and the seventh month in which job losses amounted to more than 500,000. Adding to the mix, the unemployment rate is anticipated to surge to 9.2 percent – matching the September 1983 high - from 8.9 percent. Based on the fact that continuing jobless claims have done nothing but hit record highs, there is some potential for worse-than-expected results on Friday. However, as long as NFPs fall by fewer than 539,000 (the loss we saw in April), the markets may focus more on speculation that the worst is over for the US economy and that recovery may be on the way.

...more...

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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:40 AM
Response to Reply #8
12. Geithner tells China its dollar assets are safe
http://www.reuters.com/article/businessNews/idUSTRE54U0...

BEIJING (Reuters) - U.S. Treasury Secretary Timothy Geithner on Monday reassured the Chinese government that its huge holdings of dollar assets are safe and reaffirmed his faith in a strong U.S. currency.

A major goal of Geithner's maiden visit to China as Treasury chief is to allay concerns that Washington's bulging budget deficit and ultra-loose monetary policy will fan inflation, undermining both the dollar and U.S. bonds.

China is the biggest foreign owner of U.S. Treasury bonds. U.S. data shows that it held $768 billion in Treasuries as of March, but some analysts believe China's total U.S. dollar-denominated investments could be twice as high.

"Chinese assets are very safe," Geithner said in response to a question after a speech at Peking University, where he studied Chinese as a student in the 1980s.

His answer drew loud laughter from his student audience, reflecting skepticism in China about the wisdom of a developing country accumulating a vast stockpile of foreign reserves instead of spending the money to raise living standards at home.

...lots more...
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:32 AM
Response to Reply #12
44. Oh Look! A traveling stand up comedy act......
Edited on Tue Jun-02-09 09:48 AM by AnneD
those were my first thoughts....I see the Chinese students got the joke too. Their so smart.

So if the Chinese aren't buying it-why are we :think:
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:37 AM
Response to Original message
9. Dow gets shake-up as GM, Citi kicked out of average
NEW YORK (Reuters) General Motors and Citigroup were kicked out of the closely watched Dow Jones industrial average on Monday, marking a historic fall from grace for two once venerable American corporations.

In a widely anticipated move, Dow Jones & Co said technology bellwether Cisco Systems Inc (CSCO.O) will replace GM, which filed for bankruptcy on Monday morning. Travelers Co (TRV.N), a large home, auto and commercial insurer, will take the place of Citigroup due to the bank's restructuring and the government's "large and ongoing stake."

....

GM's bankruptcy is the third-largest Chapter 11 case in U.S. history, ranking only behind Lehman Brothers and WorldCom in terms of size.

One factor that helped seal GM's fate was the surge in U.S. oil futures prices to record highs near $150 a barrel last July. That drove gasoline prices up to around $4 a gallon and helped kill demand for Detroit's gas-guzzling best sellers, the sport utility vehicles, or SUVs.

GM's removal from the Dow ended its 83-year run in the blue-chip industrial average, which has just 30 components. The only other stock with a longer history is General Electric (GE.N), which was in the original Dow in 1896.

http://news.yahoo.com/s/nm/20090602/bs_nm/us_gm_dow
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:50 AM
Response to Reply #9
14. Citigroup exit from Dow cements bank's downfall
http://www.reuters.com/article/businessNews/idUSTRE5505...

NEW YORK (Reuters) - Citigroup Inc's (C.N) run of ignominy has now come to this: losing its coveted spot in the Dow Jones industrial average .DJI to a former unit.

Dow Jones Indexes on Monday said the property and casualty insurer Travelers Cos (TRV.N) will replace Citigroup in its flagship 30-stock index of blue-chip stocks, effective June 8.

Citigroup shares have traded below $5 since mid-January, and bottomed at 97 cents on March 5, after huge losses led to a series of federal bailouts. Taxpayers could end up owning 34 percent of what was once the world's largest bank by market value.

The change to the Dow ends 12 years in the index for New York-based Citigroup, known as Citicorp when it joined. It also marks the return to the index of Travelers' red umbrella logo, which Citigroup sold to Travelers in 2007, five years after spinning off the St. Paul, Minnesota-based company.

"You're taking out a weak, wounded financial stock," said Richard Sylla, a professor at New York University's Stern School of Business. "They probably never thought the biggest bank in the world would become a wounded duck."

Citigroup was created in 1998 when Sanford "Sandy" Weill merged his Travelers Group with Citicorp, creating what was deemed a "financial supermarket."

...more...


hmmmm..... 1998 .... glass-steagall act repealed .... hmmmm....

:think:

Glass-Steagall Act

The first Glass-Steagall Act was passed in February, 1932 in an effort to stop deflation and expanded the Federal Reserve's ability to offer rediscounts on more types of assets such as government bonds as well as commercial paper.<4> The second Glass-Steagall Act was passed in 1933 in reaction to the collapse of a large portion of the American commercial banking system in early 1933.

<snip>

The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by Republican majorities on party lines by a 54-44 vote in the Senate<12> and by a 343-86 vote in the House of Representatives<13>. After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bill resolving the differences was passed in the Senate 90-8 (1 not voting) and in the House: 362-57 (15 not voting). ' The legislation was signed into law by President Bill Clinton on November 12, 1999. <14>

The banking industry had been seeking the repeal of Glass-Steagall since at least the 1980s. In 1987 the Congressional Research Service prepared a report which explored the case for preserving Glass-Steagall and the case against preserving the act.<7>

The argument for preserving Glass-Steagall (as written in 1987):

1. Conflicts of interest characterize the granting of credit -- lending -- and the use of credit -- investing -- by the same entity, which led to abuses that originally produced the Act.

2. Depository institutions possess enormous financial power, by virtue of their control of other people’s money; its extent must be limited to ensure soundness and competition in the market for funds, whether loans or investments.

3. Securities activities can be risky, leading to enormous losses. Such losses could threaten the integrity of deposits. In turn, the Government insures deposits and could be required to pay large sums if depository institutions were to collapse as the result of securities losses.

4. Depository institutions are supposed to be managed to limit risk. Their managers thus may not be conditioned to operate prudently in more speculative securities businesses. An example is the crash of real estate investment trusts sponsored by bank holding companies (in the 1970s and 1980s).

The argument against preserving the Act (as written in 1987):

1. Depository institutions will now operate in “deregulated” financial markets in which distinctions between loans, securities, and deposits are not well drawn. They are losing market shares to securities firms that are not so strictly regulated, and to foreign financial institutions operating without much restriction from the Act.

2. Conflicts of interest can be prevented by enforcing legislation against them, and by separating the lending and credit functions through forming distinctly separate subsidiaries of financial firms.

3. The securities activities that depository institutions are seeking are both low-risk by their very nature, and would reduce the total risk of organizations offering them -- by diversification.

4. In much of the rest of the world, depository institutions operate simultaneously and successfully in both banking and securities markets. Lessons learned from their experience can be applied to our national financial structure and regulation.<7>


Financial events following the repeal

The repeal enabled commercial lenders such as Citigroup, which was in 1999 the largest U.S. bank by assets, to underwrite and trade instruments such as mortgage-backed securities and collateralized debt obligations and establish so-called structured investment vehicles, or SIVs, that bought those securities.<15> It is believed by some including Elizabeth Warren<16>, co-author of All Your Worth: The Ultimate Lifetime Money Plan (Free Press, 2005) (ISBN 0-7432-6987-X) and one of the five outside experts who constitute the Congressional Oversight Panel of the Troubled Asset Relief Program, that the repeal of this act contributed to the Global financial crisis of 2008–2009<17> <18>, although some maintain that the increased flexibility allowed by the repeal of Glass-Steagall mitigated or prevented the failure of some American banks.<19>

The year before the repeal, sub-prime loans were just 5% of all mortgage lending. By the time the credit crisis peaked in 2008, they were approaching 30%. Although, this correlation is not necessarily an indication of causation, as there are several other significant events that have impacted the sub-prime market during that time. These includes the adoption of mark-to-market accounting, implementation of the Basel Accords, the rise of adjustable rate mortgages etc.

...more...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:06 AM
Response to Reply #14
24. IIRC, Glass-Steagal Was Repealed AFTER Citi Bought Travellers
to legitimatize the merger.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:09 AM
Response to Reply #24
27. you remember correctly
a de facto swindle job
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:19 AM
Response to Reply #14
43. You have a superb memory, UIA.
Ah, this puzzle goes together one piece at a time!
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 06:13 AM
Response to Reply #9
17. "One factor that helped seal GM's fate was the surge in U.S. oil futures prices"
I was just thinking yesterday that I blamed the executives of Exxon Mobil more than GM execs for the problems at GM.

If gas taxes had been increased years ago to encourage conservation, GM would have responded with more smaller, fuel efficient cars earlier.

If alternative energy sources had been pursued aggressively, battery technology might be a few years ahead and GM might have more hybrids and electric vehicles TODAY.

Exxon Mobil shut down both those efforts through their friends in the Bush Administration and previous administrations.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:08 AM
Response to Reply #17
25. giving Away the Small Car Market to Japan Sealed GM's Fate
Edited on Tue Jun-02-09 07:41 AM by Demeter
Aside from the Saturn, GM never made a credible effort at meeting that market.

And 1973 Oil Embargo put all the car makers on notice to change their foolish ways. They had 35 years' notice.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:37 AM
Response to Reply #9
46. Well....
Edited on Tue Jun-02-09 09:51 AM by AnneD
that's one way to raise the average, drop your low performers. How is it that when a scientist does this it's called fudging the data and all hell breaks lose. Credentials get yanked, grants dry up etc, etc, etc.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:45 AM
Response to Reply #46
51. It Would Be Interesting How Often This USED to Happen, Compared to Modern Times
when it's every 6 months or so....
http://en.wikipedia.org/wiki/Dow_Industrials
Former components
Main article: Historical components of the Dow Jones Industrial Average

The individual components of the DJIA are occasionally changed as market conditions warrant. When companies are replaced, the scale factor used to calculate the index is also adjusted so that the value of the average is not directly affected by the change.

On November 1, 1999, Chevron, Goodyear Tire and Rubber Company, Sears Roebuck, and Union Carbide were removed from the DJIA and replaced by Intel, Microsoft, The Home Depot, and SBC Communications. Intel and Microsoft became the first two companies traded on the NASDAQ exchange to be listed in the DJIA. This move was widely (in retrospect) criticized since it involved moving into "tech" names just before the top of the tech bubble. On April 8, 2004, another change occurred as International Paper, AT&T, and Eastman Kodak were replaced with Pfizer, Verizon, and AIG. On December 1, 2005, AT&T returned to the DJIA as a result of the SBC Communications and AT&T merger. Altria Group and Honeywell were replaced by Chevron and Bank of America on February 19, 2008. Chevron had gained about 140% during the time it was "out", while all three names that replaced it had lost about 30%. On September 22, 2008, Kraft Foods replaced American International Group in the index.<4> On June 8, 2009 General Motors and Citigroup will be replaced by Cisco Systems and Travelers.

http://en.wikipedia.org/wiki/Historical_components_of_t...
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:40 AM
Response to Original message
11. GM hoping for speedy sale and exit from Chapter 11
NEW YORK General Motors hopes to follow the lead of fellow U.S. automaker Chrysler by transforming its most profitable assets into a new company in just 30 days and emerging from bankruptcy protection soon after.

....

The government has said it expects GM to come out of bankruptcy protection within 60 to 90 days. By comparison, the judge overseeing Chrysler's case approved the sale of its assets to a group led by Italy's Fiat Group SpA in just over a month. Some industry observers think Chrysler could emerge as early as this week.

During Monday's hearing GM Attorney Harvey Miller stressed the magnitude of the case and the importance of moving GM through court oversight as fast as possible. He noted that the automaker only has about $2 billion in cash left.

http://news.yahoo.com/s/ap/us_automakers
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:43 AM
Response to Reply #11
13. General Motors to close or idle 12 more plants
DETROIT General Motors Corp. said Monday it will permanently close nine more plants and idle three others to trim production and labor costs under bankruptcy protection.

The closures will displace 18,000 to 20,000 GM employees, the company said.

Six of the plants are in GM's home state of Michigan, which has already been hard-hit by job cuts in the auto industry.

GM's assembly plant in Wilmington, Del., will close in July, followed by its Pontiac, Mich., pickup truck plant in October.

Assembly plants in Spring Hill, Tenn., and Orion Township, Mich., will end production this fall but remain on "standby," meaning workers can be called back should the company need to increase production. One of those plants may be retooled to produce a subcompact vehicle that GM had originally planned to build in China.

http://news.yahoo.com/s/ap/20090601/ap_on_bi_ge/us_gm_p...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:09 AM
Response to Reply #13
28. SEVEN Plants in Michigan--a Minimum of 10,000 Families
GM deserves what's coming to it.
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burf Donating Member (745 posts) Send PM | Profile | Ignore Tue Jun-02-09 09:36 AM
Response to Reply #11
45. Its no wonder GM
wants to get through the bankruptcy quickly. They want to get it over with before the last of the people they screwed can get to court.

From MarketWatch: SAN FRANCISCO (MarketWatch) -- As the financial crisis forces more car dealerships to close, more consumers say they're getting run over by dealers who disappear without forwarding their payments -- leaving some on the hook for thousands of dollars.

In some instances, dealers fail to pass along to state agencies the registration fees and taxes consumers pay at the sale's close. In other cases, consumers who trade in a vehicle on which they still owe money find months later that the dealer never paid off the lender as promised.

Link: http://www.marketwatch.com/story/car-buyers-must-track-...

I dunno if this has already been posted. If so, my bad.

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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:54 AM
Response to Original message
15. Subprime meltdown over; now comes the bad part
So much has been made of the subprime mortgage implosion that you would think it was almost totally responsible for the economic collapse, and that once the subprime problem was fixed then the worst would be over.

Unfortunately nothing could be further from the truth, despite hitting new highs in foreclosure listing. Instead it was the first round of a three part collapse, and we are on the edge of the second round.

....

The problem of negative equity has already leaked out into other mortgage classes even before the teaser rates have expired. The percentage of homes going into negative equity has increased by 50% in just 6 months.

The Boston Federal Reserve has documented that negative equity is the leading cause of foreclosures.

....

Round Two

Most subprime mortgages had teaser rates lasting 2 or 3 years. Alt-A and Option-ARM mortgages usually had teaser rates of 5 to 7 years.

That's why you saw the subprime market implode first.

http://www.dailykos.com/storyonly/2009/6/1/737325/-Subp... ;-now-comes-the-bad-part



You owe yourself the knowledge from reading the whole thing. This diary is full of graphs and numbers that fully illustrate the next bank loan/real estate tsunami. It says nothing about commercial real estate. I am sure that will be the subject for another exploration.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 06:47 AM
Response to Reply #15
21. I found this particular statement quite alarming
The Option-ARM market was overwhelmingly concentrated in the state of California.

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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:18 AM
Response to Reply #21
29. Because California Was Banking on Housing Rising
Jumbo loans, second mortgage "down payments", refinance when the valuation rose so one could get a little equity to buy some furniture or curtains. People were nuts in California. They'd buy overpriced houses with every last nickel, then cover the windows with computer printout for privacy and sleep on the floor.

This went on for 20 years at least. People would flip houses, buy a second house to rent, do all kinds of speculation.

And now it all falls down and goes boom. Too bad it didn't do so a long time ago....
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 05:56 AM
Response to Original message
16. Have fun today everyone.
I am due at the courthouse as my civic duty in the jury pool calls. "One day or one trial" the summons says. We'll see.

:hi:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:21 AM
Response to Reply #16
30. I Salute You, Citizen!
Good luck!
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:02 PM
Response to Reply #30
67. Thank you. They didn't want me.
Something stank up my appeal. Maybe it's all the lawyers in my family. Maybe counsel for the prosecution did not like me asking how he would define 'prostitution' in this criminal case. My FiL, a criminal defense attorney, says that my question probably frightened the prosecutor.
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MattSh Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 06:22 AM
Response to Original message
18. Good morning, good afternoon, or good evening, everybody,
wherever you might be.

Yesterday's irrational exuberance was just plain over the top. I wonder when reality will catch up to the market? Not just the one or two day at a time based reality. Reality based on what is really happening in the world today. Long term reality.

Many question, no answers...
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:22 AM
Response to Reply #18
31. I'm Thinking There Is No Market, Anymore
It's just numbers on a screen, at the whim of Goldman Sachs and associates.
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Festivito Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 06:42 AM
Response to Original message
19. Debt: 05/29/2009 11,321,599,905,356.40 (UP 20,485,027,508.02) (Debt >7T$.)
(Debt moves over 7T$ in a reasonable sized jump 5/29. FICA side moves up a little.)

= Held by the Public + Intragovernmental(FICA)
= 7,019,321,525,525.25 + 4,302,278,379,831.15
UP 19,434,324,960.50 + UP 1,050,702,547.52

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.79, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,537,542 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $36,933.81.
A family of three owes $110,801.44. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 days.
The average for the last 20 reports is 8,433,874,548.41.
The average for the last 30 days would be 5,622,583,032.27.

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$/day.
There were 88 reports in 129 days of Obama's part of FY2009 averaging -0.07B$ per report, 0.00B$/day so far.
There were 163 reports in 241 days of FY2009 averaging 7.96B$ per report, 5.38B$/day.

PROJECTION:
There are 1,332 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/29/2009 11,321,599,905,356.40 BHO (UP 694,722,856,443.32 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: 1,296,875,008,444.00 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/06/2009 -000,058,764,073.21 ----
05/07/2009 +027,679,213,817.18 ------------**********
05/08/2009 -000,216,334,016.92 ---
05/11/2009 -000,029,759,155.68 ---- Mon
05/13/2009 -000,207,515,478.68 ---
05/14/2009 +013,927,016,419.76 ------------**********
05/15/2009 +013,064,365,189.63 ------------**********
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******
05/26/2009 +000,178,213,075.69 ------------******** Tue
05/27/2009 +000,332,821,919.42 ------------********
05/29/2009 +019,434,324,960.50 ------------**********

91,507,501,741.57 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,656,968,102,097.33 in last 253 days.
That's 1,657B$ in 253 days.
More than any year ever, including last year, and it's 163% of that highest year ever only in 253 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 253 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.ph...
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Festivito Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 02:13 PM
Response to Reply #19
56. Debt: 06/01/2009 11,379,966,189,575.05 (UP 58,366,284,218.65) (Up 78B$, SS down.)
(Mixed today. Public debt goes up while FICA side goes down. Later in week, debt may go back down, or, maybe not.)

= Held by the Public + Intragovernmental(FICA)
= 7,097,861,677,672.01 + 4,282,104,511,903.04
UP 78,540,152,146.76 + DOWN 20,173,867,928.11

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.79, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,559,142 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,121.6.
A family of three owes $111,364.8. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 19 reports in the last 30 to 31 days.
The average for the last 19 reports is 9,046,841,961.82.
The average for the last 30 days would be 5,729,666,575.82.
The average for the last 31 days would be 5,544,838,621.76.
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$/day.
There were 89 reports in 132 days of Obama's part of FY2009 averaging 0.23B$ per report, 0.17B$/day so far.
There were 164 reports in 244 days of FY2009 averaging 8.26B$ per report, 5.55B$/day.

PROJECTION:
There are 1,329 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 18.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
06/01/2009 11,379,966,189,575.05 BHO (UP 753,089,140,661.97 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: 1,355,241,292,662.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/07/2009 +027,679,213,817.18 ------------**********
05/08/2009 -000,216,334,016.92 ---
05/11/2009 -000,029,759,155.68 ---- Mon
05/13/2009 -000,207,515,478.68 ---
05/14/2009 +013,927,016,419.76 ------------**********
05/15/2009 +013,064,365,189.63 ------------**********
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******
05/26/2009 +000,178,213,075.69 ------------******** Tue
05/27/2009 +000,332,821,919.42 ------------********
05/29/2009 +019,434,324,960.50 ------------**********
06/01/2009 +078,540,152,146.76 ------------********** Mon

170,106,417,961.54 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,715,334,386,315.98 in last 256 days.
That's 1,715B$ in 256 days.
More than any year ever, including last year, and it's 169% of that highest year ever only in 256 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 256 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.ph...
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 06:46 AM
Response to Original message
20. Greg Palast. How Stevie the Rat Bankrupted GM.
Found this at Automatic Earth last night.

Grand Theft Auto: How Stevie the Rat bankrupted GM
by Greg Palast

Screw the autoworkers. They may be crying about General Motors' bankruptcy today. But dumping 40,000 of the last 60,000 union jobs into a mass grave won't spoil Jamie Dimon's day. Dimon is the CEO of JP Morgan Chase bank. While GM workers are losing their retirement health benefits, their jobs, their life savings; while shareholders are getting zilch and many creditors getting hosed, a few privileged GM lenders - led by Morgan and Citibank - expect to get back 100% of their loans to GM, a stunning $6 billion. The way these banks are getting their $6 billion bonanza is stone cold illegal.

I smell a rat. Stevie the Rat, to be precise. Steven Rattner, Barack Obama's 'Car Czar' - the man who essentially ordered GM into bankruptcy this morning. When a company goes bankrupt, everyone takes a hit: fair or not, workers lose some contract wages, stockholders get wiped out and creditors get fragments of what's left. That's the law. What workers don't lose are their pensions (including old-age health funds) already taken from their wages and held in their name. But not this time. Stevie the Rat has a different plan for GM: grab the pension funds to pay off Morgan and Citi.

Here's the scheme: Rattner is demanding the bankruptcy court simply wipe away the money GM owes workers for their retirement health insurance. Cash in the insurance fund would be replace by GM stock. The percentage may be 17% of GM's stock - or 25%. Whatever, 17% or 25% is worth, well ... just try paying for your dialysis with 50 shares of bankrupt auto stock. Yet Citibank and Morgan, says Rattner, should get their whole enchilada - $6 billion right now and in cash - from a company that can't pay for auto parts or worker eye exams.

So what's wrong with seizing workers' pension fund money in a bankruptcy? The answer, Mr. Obama, Mr. Law Professor, is that it's illegal. In 1974, after a series of scandalous take-downs of pension and retirement funds during the Nixon era, Congress passed the Employee Retirement Income Security Act. ERISA says you can't seize workers' pension funds (whether monthly payments or health insurance) any more than you can seize their private bank accounts. And that's because they are the same thing: workers give up wages in return for retirement benefits.

The law is darn explicit that grabbing pension money is a no-no. Company executives must hold these retirement funds as "fiduciaries." Here's the law, Professor Obama, as described on the government's own web site under the heading, "Health Plans and Benefits." "The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits." Every business in America that runs short of cash would love to dip into retirement kitties, but it's not their money any more than a banker can seize your account when the bank's a little short. A plan's assets are for the plan's members only, not for Mr. Dimon nor Mr. Rubin.

Yet, in effect, the Obama Administration is demanding that money for an elderly auto worker's spleen should be siphoned off to feed the TARP babies. Workers go without lung transplants so Dimon and Rubin can pimp out their ride. This is another "Guantanamo" moment for the Obama Administration - channeling Nixon to endorse the preventive detention of retiree health insurance. Filching GM's pension assets doesn't become legal because the cash due the fund is replaced with GM stock. Congress saw through that switch-a-roo by requiring that companies, as fiduciaries, must "...act prudently and must diversify the plan's investments in order to minimize the risk of large losses."

By "diversify" for safety, the law does not mean put 100% of worker funds into a single busted company's stock. This is dangerous business: The Rattner plan opens the floodgate to every politically-connected or down-on-their-luck company seeking to drain health care retirement funds. Pensions are wiped away and two connected banks don't even get a haircut? How come Citi and Morgan aren't asked, like workers and other creditors, to take stock in GM?

As Butch said to Sundance, who ARE these guys? You remember Morgan and Citi. These are the corporate Welfare Queens who've already sucked up over a third of a trillion dollars in aid from the US Treasury and Federal Reserve. Not coincidentally, Citi, the big winner, has paid over $100 million to Robert Rubin, the former US Treasury Secretary. Rubin was Obama's point-man in winning banks' endorsement and campaign donations (by far, his largest source of his corporate funding).

With GM's last dying dimes about to fall into one pocket, and the Obama Treasury in his other pocket, Morgan's Jamie Dimon is correct in saying that the last twelve months will prove to be the bank's "finest year ever." Which leaves us to ask the question: is the forced bankruptcy of GM, the elimination of tens of thousands of jobs, just a collection action for favored financiers?

And it's been a good year for Seor Rattner. While the Obama Administration made a big deal out of Rattner's youth spent working for the Steelworkers Union, they tried to sweep under the chassis that Rattner was one of the privileged, select group of investors in Cerberus Capital, the owners of Chrysler. "Owning" is a loose term. Cerberus "owned" Chrysler the way a cannibal "hosts" you for dinner. Cerberus paid nothing for Chrysler - indeed, they were paid billions by Germany's Daimler Corporation to haul it away. Cerberus kept the cash, then dumped Chrysler's bankrupt corpse on the US taxpayer. ("Cerberus," by the way, named itself after the Roman's mythical three-headed dog guarding the gates Hell. Subtle these guys are not.)

While Stevie the Rat sold his interest in the Dog from Hell when he became Car Czar, he never relinquished his post at the shop of vultures called Quadrangle Hedge Fund. Rattner's personal net worth stands at roughly half a billion dollars. This is Obama's working class hero. If you ran a business and played fast and loose with your workers' funds, you could land in prison. Stevie the Rat's plan is nothing less than Grand Theft Auto Pension. It doesn't make it any less of a crime if the President drives the getaway car.


http://theautomaticearth.blogspot.com /

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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:08 AM
Response to Reply #20
26. these banksters and their nasty friends need to start wearing
a different set of striped suits

:grr:
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:30 AM
Response to Reply #20
32. (Expletive Deleted)
Edited on Tue Jun-02-09 07:30 AM by Demeter
Holy Cow, Batman!! Who would you sue in this situation? The government?

WHAT IS THE MATTER WITH THESE PEOPLE?? DO THEY THINK WE DON'T READ??
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Wednesdays Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:04 AM
Response to Reply #32
38. They think most of us don't read.
And they're right.

So, who's up next on American Idol?
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 02:30 PM
Response to Reply #38
57. Screw American Idol. Here's a Susan Boyle update:
Post-Defeat, Susan Boyle Checks Into Hospital - washingtonpost.com

By Amy Argetsinger and Roxanne Roberts
Tuesday, June 2, 2009; 12:00 AM

Susan Boyle, despite her defeat on "Britain's Got Talent," continues to dominate the headlines. Sadly, it's not for the reasons she had hoped.

Yesterday, she was resting in a mental hospital surrounded by news crews, and the British prime minister gave a televised interview to say he'd checked in on her.

Police took the Internet singing sensation to the private Priory clinic Sunday night after she suffered an emotional breakdown -- just 24 hours after Saturday's finale. Producers issued a statement saying she was "exhausted and emotionally drained." One of the show judges, Piers Morgan, wrote on his blog yesterday that Boyle "told me she'd spent most of the week crying, throwing up, not sleeping and generally feeling the weight of the world's pressures on her."

According to British media reports, police were called about 6 p.m. on Sunday to a London hotel where doctors were "assessing a woman under the Mental Health Act." The woman was taken by ambulance to the Priory, a clinic in north London known for its celebrity clientele.

Yesterday, PM Gordon Brown said he had called judges Simon Cowell and Morgan to "be sure that she was okay." . . .

The runaway favorite to win came in second to Diversity, a group of 11 street dancers, including three sets of brothers.

http://www.washingtonpost.com/wp-dyn/content/article/20...
___________________________________

Susan Boyle sings "Memory" from Cats: http://www.youtube.com/watch?v=CmWCqIVQpEI

The original Susan Boyle video, in which she sings "I Dreamed a Dream" http://www.youtube.com/watch?v=9lp0IWv8QZY is at about 65 million hits on Youtube. It is still inspiring and I thank Ozy for pointing it out to us.

The pressure and publicity have temporarily knocked Susan back, but I'm sure we'll hear more from her in the future.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 08:05 AM
Response to Reply #20
36. ERISA says you can't seize workers' pension funds

as Denninger would say...Where are the cops?!!!!


Where are the regulators who are supposed to be looking out for us ensuring the laws are being obeyed. This is horrible.

BTW, where is antigop? Anybody know what happened?
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burf Donating Member (745 posts) Send PM | Profile | Ignore Tue Jun-02-09 09:41 AM
Response to Reply #36
47. ERISA has nothing to do
with employee retirement nor income security. It was a law passed in the early seventies,by a bought a Congress bought and paid for by the insurance companies. Take this from someone who has been there and didn't stand a chance. We didn't even get a t-shirt!
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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:10 AM
Response to Reply #20
41. This is a GMTA moment for me...
I was going to post this same article yesterday after DRDU posted the story about the Car Czar's right hand guy...

What did I learn from this event? Some articles are meant to be on the SMW and they'll find their way here one way or another!

Thanks for posting, Dr.Phool. :)
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 04:45 PM
Response to Reply #41
64. Not too much gets by here....
Edited on Tue Jun-02-09 04:59 PM by AnneD
I hadn't seen the article but I just knew that the GM union workers were going to need KY jelly before this was over....I just knew it.

Similar thing happened when I was working at a hospital once and I learned 2 thing........

1)if it is a buy out-the new guys don't have to honour your contract or benefits unless it was negotiated (and the CEO's are more worried about their golden parachute so you get the golden shaft -I lost vacation time, comp time, senority and pay level on a buyout.

2)if it is a bankruptcy, you and your pension are an unsecure creditor and you are last in line and settle for chump change. Basically you labour and therefore your time and money are stolen from you.
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nc4bo Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 11:20 AM
Response to Reply #20
54. Every one who is any one has been bought and paid for....
we've been saying the same damn things over and over again.

Corporate corruption and corporate influence is/has destroyed this country.

Not so long ago, there was a historic campaign, led by a historic candidate who fired-up millions of people to donate, volunteer and vote for HOPEFUL PROMISES. We were given hope for REAL change "in the ways things are done in Washington".

CHANGE WE CAN BELIEVE IN!

YES WE CAN!

yea, right. whateva. :eyes:



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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 04:34 PM
Response to Reply #20
62. Well colour me suprised....
NOT.

I was telling some other person in another thread that I was sick and tired of the DEM party selling out Labour and to watch this GM bankruptcy carefully. This DEM may not show up to the polls this election. If they don't care about us I damn sure don't care about them. I might even hold my nose and vote some of these DEM traitors out of office. I think the grass roots needs to target a few of our leaders to put some fear into these weasels.

First on my list would be Nancy Pelosi for general failure to do her job. Harry Reid (for his lack of support in swearing in Al Franken) might be another. Just unseating one of those would be better than a trip to the wood shed or a come to Jesus meeting. Or how about some of those Dems that passed the Bankruptcy bill. Remember how spineless they were about Lieberman 'don't throw him out of the club'.
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 06:48 AM
Response to Original message
22. The Rule of Law. Is it Fascism yet?
Ilargi: Well, it doesn't take much, nor long, to get from the biggest corporate -industrial- bankruptcy right back to suspicious slash illegal slash criminal behavior, does it? As a matter of fact, says Greg Palast, that behavior starts right at that bankruptcy, with the Obama administration demanding workers hand over their pensions funds in exchange for -worthless- GM stock. It's against the law. It's called the Employee Retirement Income Security Act.

So is -or should be, who knows anymore?- what the NY Post says AIG is doing: "AIG is trying to seize a $490 million charitable endowment -- and claw back $27 million it already awarded to New York charities -- to pay executive bonuses". $180 billion hasn't toned those bozo's down one single decibel.

Christopher Cox actively hindered his staff at the SEC from doing their work, something he actively denied for a long time. Let's see the criminal charges. Yeah, sure.

A commission will investigate what caused the crisis. Obama plans to get tough on Wall Street, which pledges to push right back. Guess who'll win that one? Come on guys, it's just a show, and all it takes is for you to believe it long enough for everything you have to be stolen from under your lazy asses.

Celente is right: this is Mussolini's fascism, a country ruled by its corporate interests. And those are not the same as your interests. And in case you don't think it'll happen to you, make no mistake: a government that even so much as tries to get away with stealing its citizens' pensions is capable of just about anything.

"The rule of law" is a term that exists to keep a check on those who govern. Wiki: "The rule of law, also called supremacy of law, is a general legal maxim according to which decisions should be made by applying known principles or laws, without the intervention of discretion in their application. This maxim is intended to be a safeguard against arbitrary governance."

It's safe to say that the rule of law means little these days.

http://theautomaticearth.blogspot.com/
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 06:55 AM
Response to Original message
23. We be Nutz. Denninger.
We Are In Looneyville

When a market rally drags a firm's stock that has declared bankruptcy, and which has filed a plan that will result in the effective total destruction of its common stock, into the green by 20%, you know we live in looneyland.

That would be GM, which opened down at 50 cents but now is trading at 90, up fifteen cents from Friday.

Note that the common is worthless; the prepackaged bankruptcy and Section 363 sale will strip all of the value from the current GM and transfer it to the new GM.

The "old" GM will have a negative net value, which means the common stock (which represents "old" GM) is worth exactly bupkis.

Yes, this is all daytraders playing around - I get that.

But I'd like anyone to explain how GM's common stock has any value in it whatsoever, and is trading on anything more than pure hype on a big up day.

Good luck with that analysis.

Disclosure: No positions material to this idiocy.
------------------------------------------


Are Day Traders really this stoopid?
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Wednesdays Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:09 AM
Response to Reply #23
40. My sister is on that bandwagon
I heard through my mother that my sister is buying up GM stock, 'cuz she thinks it's a bargain. I'm thinking, good luck...P.T. Barnum was right, and one was born 4 years earlier than I.
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Dr.Phool Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:45 AM
Response to Reply #40
50. Yep, they're out there.
The only time in my life, that I stood in front of my father and screamed at him. He wanted to load up on LTV Steal stock at about a quarter a share when they were in Chapter 11.

I stood there yelling in his face. IT'S WORTHLESS! IT'S WORTHLESS! NOT WORTH A PENNY! He got mad at me, but he didn't buy it.
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AnneD Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 04:49 PM
Response to Reply #23
65. If they get caught holding the stocks they are....
that's how day traders lose everything.

This is why the market is so sick these days-total end game thinking.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:51 AM
Response to Original message
33. CCB reveals aversion to western banks stakes
http://www.ft.com/cms/s/0/c733052a-4ed9-11de-8c10-00144...

By Jamil Anderlini in London and Sundeep Tucker in Hong Kong

Published: June 1 2009 23:30 | Last updated: June 2 2009 08:15

Chinese banks are shunning investments in western banks because they hold doubts about their financial health, one of Chinas most senior bankers has warned....

THERE'S MORE TO THE ARTICLE, BUT THAT SAYS IT ALL, DOESN'T IT?
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:53 AM
Response to Reply #33
34. Abu Dhabi investor sells Barclays stake
http://www.ft.com/cms/s/0/6dcdae88-4ee6-11de-8c10-00144...

By Kate Burgess, Peter Thal Larsen and Neil Hume

Published: June 1 2009 21:12 | Last updated: June 2 2009 11:13

Shares in Barclays tumbled on Tuesday after one of its largest Middle Eastern shareholders announced plans on Monday night to offload its stake in the British bank, pocketing a large profit less than seven months after making its 3.5bn investment...

LOTS OF BANK SPECULATION AROUND THE WORLD, IT SEEMS, AND PERHAPS JUST A HINT OF INSIDER TRADING?
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Hawkowl Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 04:16 PM
Response to Reply #34
60. Pump & Dump over?
Does this mean that the pump part is drawing to a close? Is GS, the Fed, BOA and the others finally done hyping the market because they are done issuing new stock? It appears to me that the markets have been gamed and manipulated beyond belief to re-inflate the bubble (functioning as a life preserver) so that our too big to fail financial firms could "raise capital".

Are we now drawing close to the "dump" phase of bubble jr? If the foreigners are starting to shy away and unload their stakes in Wall Street firms, is this the signal to GS to engineer the next crash? It is apparent to me that GS and Paulson deliberately engineered the demise of Bear Stearns to profit from the credit default insurance policy that they took out from AIG. It also appears that GS and JP Morgan are going to profit on the GM bankruptcy in similar manner, but by pillaging pensions instead of AIG.

Which company does GS and its henchman in the administration have in its cross-hairs now? If the market is truly headed south, (how can it not be with the atrocious economic fundamentals), look for GS and the smaller hedge funds to amplify the upcoming market crash.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 04:40 PM
Response to Reply #60
63. If Only 10% of This Is True, It's Too Much
There would be no way short of the French Revolution to stop it.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:54 AM
Response to Original message
35. An Easily Understandable Explanation of Derivative Markets
This explanation was sent to me in an email...


An Easily Understandable Explanation of Derivative Markets

Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar. To solve this problem, she comes up with new marketing plan that allows her customers to drink now, but pay later.

She keeps track of the drinks consumed on a ledger (thereby granting the customers loans). Word gets around about Heidi's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Heidi's bar. Soon she has the largest sales volume for any bar in Detroit.

By providing her customers' freedom from immediate payment demands, Heidi gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Heidi's gross sales volume increases massively.

A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Heidi's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank's corporate headquarters, expert traders transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets.

Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Heidi's bar. He so informs Heidi. Heidi then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts. Since Heidi cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and the eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. The suppliers of Heidi's bar had granted her generous payment extensions and had invested their firms' pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.

Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from the Government. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers.

Now, do you understand?







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Hugin Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:28 AM
Response to Reply #35
48. I agree with most of it...
Edited on Tue Jun-02-09 10:32 AM by Hugin
Except, for the last sentence where it veers off into lala-land.

"The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers."

I maintain that the people being ripped off are no different than the people who are now thought to be paying for the bailouts. In other words, the so-called 'unemployed alkis' in the story are one and the same with the so-called 'employed non-drinkers'. This one sentence reveals the intent of this piece is to divide people and reinforce the notion that there is some deadbeat somewhere who is responsible for this mess other than TPTB and the 1%-ers. Otherwise, it's fairly accurate.

Oh, and it doesn't mention the role CDSs have played in that the Bankers are under the impression that they can insure against losses at the bar by betting that the 'unemployed alkis' aren't going to pay and the bar will go into default. Which is probably why the 'risk manager' decided to do a call on Heidi's bar. Because he'd bet that she would fail. Which oddly enough proved to be true. Illustrating perfectly the conflict-of-interest inherent in the way this system is set up.
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 11:02 AM
Response to Reply #48
53. I was trying to find the original source

That derivatives story is on several blogs on the Internet, but I could never determine where or when it first originated. A few minor nits in the story, but for the most part, it does fairly simply explain about derivatives. It was long enough, probably didn't have time to explain about CDSs.


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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 02:39 PM
Response to Reply #35
58. PUKEBONDS! Love it.
Can't find it listed on the exchanges, though.
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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 07:08 PM
Response to Reply #35
68. That's a great analogy. Marvelous!
Not only does it explain derivatives but TARP too.
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Demeter Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 08:08 AM
Response to Original message
37. 
http://www.ft.com/cms/s/0/d3e32b1e-4ee9-11de-8c10-00144...

By Krishna Guha in Washington

Published: June 1 2009 23:37 | Last updated: June 1 2009 23:37

The Federal Reserve should not be involved in financing toxic assets that date from the bubble era, Charles Plosser, president of the Philadelphia Fed, has told the Financial Times.

I think it is a bridge too far, said Mr Plosser, arguing that such proposed Fed loans would expose the US central bank to credit risk and tie up a sizeable chunk of its balance sheet in long- term assets that would be hard to price and liquidate.

The Fed agreed to consider providing investors with loans to buy these assets including bubble-era subprime securities as part of a wider effort to clean up bank balance sheets involving the Treasury and the Federal Deposit Insurance Corporation.

His comments challenge Fed chairman Ben Bernankes view that the Fed can help to restart trading in these assets without unduly limiting its balance sheet flexibility or taking on too much credit risk, once haircuts on loans and Treasury risk capital are taken into account.

Mr Plosser is an independent-minded member of the Federal Open Market Committee but his doubts about the so-called legacy assets programme are shared by many others.

I have reservations about the Fed intervening in private credit markets as a matter of principle. I think it confuses monetary and fiscal policy, Mr Plosser said.

He said interventions in private credit markets involved picking winners, would be difficult to unwind, risked compromising the Feds independence and could delay the markets self-healing.

By contrast, Mr Plosser is less concerned than some of his colleagues about buying government debt. I do not think that buying Treasuries is more inflationary than buying mortgage-backed securities, he said, while operating in the Treasury market carried fewer costs.

He said the Fed needed to focus on the medium to longer term rather than the short term, and ensure it was in a position to raise rates when it needed to in order to prevent excessive inflation...

MORE AT LINK
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DemReadingDU Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:07 AM
Response to Original message
39. Paul Farrell: Twitter-brained investors get Terminated

6/2/09 10 reasons Terminators destroy 'Twitter-brains'
Hypnotized, you'll forget dot-coms, subprimes, the next Great Depression by Paul B. Farrell

Why Twitter, why Tweet? Because both reflect a disturbing trend, the rapidly decreasing attention span and intelligence of the human brain. It's no match for Wall Street's version of the "Terminator's" Skynet that is rapidly expanding it's dominance over the public.

Folks, this is too real to make up. Less than a year ago, Wall Street banks were insolvent, near bankruptcy. Then in a swift "disaster capitalism" maneuver by Henry Paulson, Wall Street's Trojan Horse in Washington, they raided our Treasury and the Fed, while our clueless reps in Congress stood by.

Eight short months later, Wall Street's back in "business as usual" with bigger salaries and bonuses, while taxpayers hold the bag for over $5 trillion in new debts, a record $546,668 per household reports USA Today.

So here's Bing's intriguing message, adapted for investors who are Terminator fans. Your memory will be purged now as you read about Wall Street Skynet's strategy. And that purge is setting up Great Depression 2, Wall Street's third crash of this century:

1. You'll forget ... that economists misled us, and will again

2. You'll forget ... new crooks are plotting to steal your money

3. You'll forget ... that regulators are also political hacks in disguise

4. You'll forget ... bankers are stupid, and will make stupid loans

5. You'll forget ... that America's run by a powerful wealthy elite

6. You'll forget ... that the news is just another Wall Street 'Terminator'

7. You'll forget ... your anger, and you'll let them get away with it

8. You'll forget ... nothing lasts forever (except Wall Street's hype)

9. You'll forget ... what's really important as soon as the bull roars

10. You'll forget ... you can fight back, but the will is gone


Now relax and listen to this soft peaceful hypnotic voice: "Yes, relax as I count backwards from 10 to 1. When we reach 1 you will wake up refreshed, optimistic. You will forget all the bad warnings from Bing, Shiller and Farrell about past and future disasters. Just stay in the eternally blissful 'Now.' Once awake, you will only remember this one fact: 'Wall Street is a trusted friend'... you won't forget that now ... will you?"

more...
http://www.marketwatch.com/story/twitter-brained-invest...
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 03:23 PM
Response to Original message
59. Ford's May Sales Fall 24%, GM's Off 29% and Toyota's Down 41%
A WALL STREET JOURNAL ONLINE NEWS ROUNDUP

Ford Motor Co. reported a 24% decline in U.S. sales for May, as the auto manufacturer posted its highest monthly sales since last June. General Motors Corp. said its May U.S. sales fell 29% and Toyota Motor Corp.'s dropped a much steeper 41%.

While Ford and GM were able to post more modest declines in their U.S. sales in May, Chrysler LLC, the third-largest U.S. auto maker, posted a steeper 47% decline.

Nissan North America, meantime, reported a 33.1% drop in its May sales from a year earlier, but said the number jumped by 43% from April. Honda Motor Co. said its May U.S. sales fell 39%.

Ford is the healthiest of the Detroit Three and has avoided a bankruptcy filing and the need for government aid. Chrysler filed for bankruptcy May 1 while larger rival GM filed Monday.

Ford plans to take advantage of the competitors' troubles, announcing Tuesday a 10,000-vehicle increase in second-quarter production and projecting its third-quarter output will be up some 10% from a year earlier--Ford's first significant production increases in almost two years.

The company gained U.S. market share in six of the seven months preceding April. That month, it beat Japan-based Toyota in the U.S. for the first time in 13 months. On Tuesday, the company said its Ford, Lincoln and Mercury market share grew in May to its highest level since 2006.

more at: http://online.wsj.com/article/SB124395944007277381.html...
_____________________________

Ford looks like the big winner from all this kerfuffle. (Imagine that, spell check did not have a problem with kerfuffle.) You might want to re-read that 5th paragraph. Ford intends to increase production. An American automaker, hell, an American manufacturer of anything, planning to increase production! Lawdy, lawdy, who expected that?

You know, the really weird thing about this is that Ford's success now came about because they had worse troubles than the other carmakers three years ago. Back in 2006, they were the one struggling to survive and mortgaged the company up the (euphemism for ass) to obtain large lines of credit they feared they might need. GM and Chrysler didn't, and when they needed lines of credit to weather a worse than expected recession, the credit market had turned hostile. You cannot point to superior products as the explanation here.

Still, Ford stock up to $6.41/share, +0.28 (+4.5%) today. GM, now traded OTC, down to 0.61/share, down more than 18% today. If we had bought Ford when boomerbust predicted it would go up, back in November when it was $1.50/sh, we'd be up 327%.
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UpInArms Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 08:04 PM
Response to Reply #59
69. thanks tclambert!
I was unable to get back near DU to get that info posted.

:hi:
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tclambert Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 09:31 PM
Response to Reply #69
70. You're welcome, and here are more numbers from Autoblog.com
In May, 2009, General Motors sold 191,875 vehicles
Ford sold 161,531
Toyota sold 152,583

Ford's Lincoln nameplate actually increased sales by 2.4% vs. a year ago.

GM's top four nameplates, the ones that will make up the "good GM":

Chevrolet: -23.74% sold 127,510 vehicles
GMC: -22.13% sold 23,926
Buick: -16.98% sold 9,160
Cadillac: -39.86% sold 8,027

"Bad GM":
Saturn -55.54% sold 8,046
Hummer -40.64% sold 1,094


More at: http://www.autoblog.com/category/by-the-numbers /
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CatholicEdHead Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Jun-02-09 10:33 PM
Response to Original message
71. Even the lawyers are getting laid off in large numbers nowadays
http://www.startribune.com/business/46767037.html

Dorsey & Whitney, the largest law firm based in Minneapolis, succumbed to the economic pressures that so many other law firms have been battling in the last year and cut its staff, the firm confirmed Tuesday.

A firm spokesman said 55 administrative-level jobs have been eliminated, or about 7 percent of total administrative staff. Layoffs occurred in seven of Dorsey's 19 offices but most were in Minneapolis, where 38 jobs were cut.

In addition, salaries for nonpartner lawyers were cut by 10 percent across the board and bonuses were reduced by an undisclosed amount.

This is the first time in years that Dorsey has resorted to layoffs.
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