STOCK MARKET WATCH, Tuesday August 11

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday August 11, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials In Prison = 4

AT THE CLOSING BELL ON August 10, 2009

Dow... 9,337.95 -32.12 (-0.34%)
Nasdaq... 1,992.24 -8.01 (-0.40%)
S&P 500... 1,007.10 -3.38 (-0.33%)
Gold future... 946.90 -12.60 (-1.31%)
10-Yr Bond... 3.77 -0.08 (-2.03%)
30-Year Bond 4.53 -0.08 (-1.63%)

---

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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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Market Observation

Inflation, Deflation, or
What Have They Done to the Currency?
BY ROB KIRBY

In recent weeks and months, there’s been much public debate in the financial press whether we’re going to hyper-inflate or suffer a deflationary collapse? I know this to be the case because I field many questions about this topic from readers around the world on a regular basis.

To better understand which of these two competing forces will ultimately win the day, let’s consider the following observable basics:

In a hyper-inflation, the value of currency (in this case, fiat money) is driven toward zero as prices rise.
In a deflationary collapse, the value of currency increases as prices collapse.
But above all, folks need to understand that inflation and deflation are BOTH monetary events which manifest themselves as a result of changes in the SUPPLY OF MONEY.

When we speak of MONEY SUPPLY, we might want to differentiate between the narrow money supply or Monetary Base (M0) and the broader measures of Money (M1, M2, and M3 – which the Fed no longer reports).

.....

The mis-pricing of capital through interest rate suppression accompanied by unchecked money creation has created a false sense of security regarding the affordability of finite, global natural resources. So you see folks, in a world where capital has zero costs, marginal business pursuits and outright speculation activities thrive creating a positive feedback loop reinforcing more unchecked money creation at zero cost (bubbles).

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

[Demeter]

28. Greenspan Started the Interest Rate Suppression

Which forced people out of Certificates of Deposit at their local banks in search of a positive return. And the economy has been on a banana peel ever since.

[tclambert]

41. Is this a recent article? I remember we were talking about hyper-inflation vs. deflationary

death spiral back in January and February. But I don't recall much of such talk in June or July. Maybe this article was in the queue for a few months.

[ozymandius]

2. Today's Reports

08:30 Productivity-Prel Q2
Briefing.com 5.2%
Consensus 5.5%
Prior 1.6%

08:30 Unit Labor Costs Q2
Briefing.com -2.2%
Consensus -2.5%
Prior 3.0%

10:00 Wholesale Inventories Jun
Briefing.com -0.9%
Consensus -0.9%
Prior -0.8%

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

[UpInArms]

23. 8:30 reports:

U.S. productivity rises 6.4% in second quarter
8:30am Today

U.S. unit labor costs fall 5.8% in second quarter
8:30am Today

U.S. real hourly compensation falls 1.1% in 2Q
8:30am Today

U.S. productivity up 1.8% in past year
8:30am Today

U.S. unit labor costs down 0.6% in past year
8:30am Today

2Q productivity rises at fastest pace in 6 years
8:30am Today

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

hmmm....

productivity = profit - labor costs

since they cut all the labor costs out of the picture, there's your answer

[Demeter]

29. Yeah, but Once the Inventory Is Sold, What Are They Gonna Do for Profits?

Or labor to build new product, for that matter?

[UpInArms]

61. BLS say it made Errors in calculations of unit labor costs

BLS says it made errors in 2Q productivity report
3:10pm Today

Errors found in calculations of unit labor costs
3:10pm Today

BLS says it will correct productivity report soon
3:10pm Today

[UpInArms]

62. Wholesale Inventories @ -1.7%

Aug 11 10:00 AM
Wholesale Inventories Jun
report -1.7%
briefing.com -0.9%
concensus -0.9%
last rep't -1.2%
rev'd from -0.8%

[ozymandius]

3. Oil hangs below $71 ahead of US Fed meeting

SINGAPORE – Oil prices hung below $71 a barrel Tuesday in Asia as crude investors joined a pause in a stock market rally ahead of a U.S. central bank meeting.

Benchmark crude for September delivery was up 31 cents to $70.91 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. On Monday, the contract fell 33 cents to settle at $70.60.

.....

A two-day meeting of the Federal Reserve starts Tuesday. This week the U.S. government will also report July retail sales and several major retailers will announce their second quarter results.

.....

In other Nymex trading, gasoline for September delivery rose 1.26 cents to $2.04 a gallon and heating oil was steady at $1.93. Natural gas for September delivery gained 4.1 cents to $3.68 per 1,000 cubic feet.

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

[UpInArms]

21. Oil futures up 45 cents at $71.05 a barrel

8:11a

Oil futures up 45 cents at $71.05 a barrel

[ozymandius]

4. BOJ On Guard Against Accelerating Price Declines

TOKYO -(Dow Jones)- The Bank of Japan's governor expressed concern Tuesday over a quickening fall in consumer prices, but said Japan's economy wasn't in danger of entering a deflationary spiral.

Considering how sharp Japan's economic downturn has been, "it may take time for falls in prices to end," Masaaki Shirakawa told a press conference after the bank's two-day policy board meeting.

But he said the BOJ doesn't expect Japan to fall into a deflationary spiral, suggesting that measures the bank has taken would help curb any deterioration of demand and supply conditions.

.....

Earlier in the day, the BOJ policy board voted unanimously to leave the unsecured overnight call loan rate target at 0.10%.

The board's post-meeting statement also expressed caution about the recent fall in consumer prices, noting that the rate of decline in Japan's core consumer price index has accelerated.

http://online.wsj.com/article/BT-CO-20090811-704588.html

[ozymandius]

5. Toxic assets still festering

WASHINGTON (CNNMoney.com) -- The economy may show signs of life, but so-called toxic assets are still a major threat to any recovery, a bailout watchdog group warned on Tuesday.

If the economy worsens and unemployment rises further, the troubled assets on bank balance sheets could lose even more value, according to the Congressional Oversight Panel, which keeps tabs on the $700 billion bailout of the financial sector.

The report reminds Congress that the bailout was initially pitched to help deal with troubled assets, hence the name: Troubled Asset Relief Program. Yet the TARP program has not relieved banks of their troubled loans.

.....

"If the economy worsens...then defaults will rise and the troubled assets will continue to deteriorate in value," the report says. "If the losses are severe enough, some financial institutions may be forced to cease operations."

http://money.cnn.com/2009/08/11/news/economy/TARP_report/?postversion=2009081103

---

This is Elizabeth Warren's committee.

[ozymandius]

6. U.S. Underwater Mortgages May Reach 30%, Zillow Says (Update1)

Aug. 11 (Bloomberg) -- Almost one-quarter of U.S. mortgage holders owed more than their homes were worth in the second quarter and that figure may rise to as much as 30 percent by mid-2010 as job losses and foreclosures climb, Zillow.com said.

Homeowners are being hurt by price declines. The estimated median value for single-family houses slid to $186,500 in the period, a 12 percent drop from a year earlier and the 10th consecutive quarterly decrease, the Seattle-based real estate data service said in a report today.

.....

The U.S. housing market is being hindered even as the pace of job cuts and price declines slows. Payrolls fell by 247,000 in July, after a 443,000 loss in June, the Labor Department said. Home prices in 20 major cities declined 17 percent in May from a year earlier, the smallest drop in nine months, according to the S&P/Case-Shiller index.

.....

A glut of unsold homes is also pushing down prices. The 3.8 million homes for sale in June would take 9.4 months to sell at the current pace of transactions, according to the National Association of Realtors. The inventory turnover rate averaged 4.5 months in the six years from 2000 to 2005.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a2p_zMYkFQFg

[tclambert]

45. "homes for sale in June would take 9.4 months to sell "

Just saw an article in a local paper (yes, I still read hardcopy sometimes) that said realtors were happy the unsold inventory has gone down. Here in the Detroit area they say:

"There was an 8.5-month supply of houses on the market in the second quarter versus a 13.9-month supply in the same quarter last year." http://www.freep.com/apps/pbcs.dll/article?AID=2009908090335

Of course, they would prefer a 3 month or less supply. That's how they define a "seller's market." For those of you too young to remember, there used to be such a thing. Sellers could expect multiple offers, and sometimes competing bidders would offer more than the initial asking price. I know it sounds crazy, but it's true, I swear.

[ozymandius]

7. Wall Street Futures Point to Higher Start

(Reuters) - Futures for the Dow Jones industrial average, S&P 500 and Nasdaq 100 rose 0.2-0.3 percent, pointing to a firmer start on Wall Street on Tuesday.

* At 7:45 a.m. .EDT, ICSC/Goldman Sachs will release chain store sales for the week ended August 8. In the previous week, sales fell 0.2 percent.

* The Federal Open Market Committee begins its two-day meeting on interest rate policy.

* Labor Department is scheduled to release, at 8:30 a.m. EDT, preliminary Q2 Productivity and Unit Labour Costs. Economists in a Reuters survey forecast a rise of 5.3 percent versus a rise of 1.6 percent in Q1. Unit Labor Costs are seen down 2.4 percent compared with a 3.0 percent fall.

* At 8:55 a.m. EDT, Redbook releases its Retail Sales Index of department and chain store sales for August versus July. In the prior period, sales fell 1.6 percent. * Commerce Department releases at 10 a.m. EDT wholesale inventories for June. Economists in a Reuters survey forecast inventories to fall by 0.9 percent in June versus a decline of 0.8 percent in May.

http://www.nytimes.com/reuters/2009/08/11/business/business-us-markets-stocks.html

[tclambert]

44. But down about 1% at 2 pm.

Dow 9,262.76 -75.19 -0.81%
Nasdaq 1,971.23 -21.01 -1.05%
S&P 500 996.71 -10.39 -1.03%

AP says traders are waiting for the Fed's take on the economy, and the Fed is in a two-day meeting. Living on stale donuts and bottled water until the meeting ends Wednesday, apparently. Really, what do "traders" expect the Fed to say? You know they're going to hedge and vacillate, dither and obfuscate.

[ozymandius]

8. Baltic Dry Index has worst week since October meltdown as Chinese demand slows

The Baltic Dry Index, which tracks shipping costs and is viewed as leading indicator for commodity prices, has had its worst week since the peak of the financial crisis last October, as Chinese demand slowed.

The index fell from 3,350 to 2,772 this week – a fall of 17.2pc - as imports of iron ore and coal slowed down. The index is now 35pc lower than its 2009 high, hit on June 3.

.....

However, some believe that imports have slowed down as Chinese steel mills are still locked in talks over the pricing of iron ore imports over the next 12 months.

http://www.telegraph.co.uk/finance/economics/5990051/Baltic-Dry-Index-has-worst-week-since-October-meltdown-as-Chinese-demand-slows.html

[Ghost Dog]

16. China’s economy cools as lending slows

China’s surging economy slowed slightly in July as state-controlled banks heeded Beijing’s instructions to rein in excessive lending, with the volume of new lending dropping 77 per cent from a month earlier.

Most economic indicators however suggested a continuing strong recovery, largely as a result of government investment and state-directed lending that saw new loans nearly triple in the first seven months from the same period last year.

Industrial output expanded by 10.8 per cent in July from a year before, less than most economists had predicted. Fixed asset investment growth rose 32.9 per cent from a year earlier for the first seven months of year, indicating some slowing in July as half-year growth had been 0.7 percentage points higher.

Senior Chinese leaders have repeatedly emphasised their commitment in recent weeks to a “moderately loose” monetary policy but fears of bubbles forming in the property and stock markets prompted the central bank and banking regulators to order banks to slow lending last month.

/... http://www.ft.com/cms/s/0/06871ef4-8630-11de-98de-00144feabdc0.html?ftcamp=rss

[UpInArms]

20. China bank lending fell almost 77% in July

http://www.marketwatch.com/story/china-bank-lending-falls-almost-77-in-july-2009-08-11

HONG KONG (MarketWatch) -- Lending by Chinese banks slowed in July, softening the pace of growth in the nation's broad money supply, following record loan issuance in the first half.

Data released Tuesday by the People's Bank of China showed new loans for July totaled 355.9 billion yuan ($52 billion), down almost 77% from June's 1.53 trillion yuan.

The latest figures brought total lending growth this year to 7.7 trillion yuan, a more than doubling from the first seven months of last year.

Of July's loan figure, 236.5 billion yuan went to households while 119 billion yuan went to corporations, the smallest such issuance since November 2007.

"After the blowout in June (when 1.228 trillion of net loans were extended to corporations), a sharp slowdown was always going to happen, but this may still unnerve the market and is another signal that the momentum has dissipated," wrote Standard Chartered analysts in a note Tuesday.

July's loan issuance was weaker than many expected, with consensus estimates pegging the figure at 500 billion yuan.

...more...

[ozymandius]

9. Comstock: Indebtedness May Cause Two Lost Decades

From The Big Picture:

-see chart-

When I make presentations, I use a chart showing the long term ratio of (all US, private and public) Debt to GDP. The chart above is a variation of that.

Bloomberg:

The CHART OF THE DAY shows U.S. total debt and gross domestic product since 1952, along with the ratio between them, based on data compiled by Bloomberg. The ratio rose in the first quarter to 372 percent even as household borrowing dropped for a second straight quarter, an unprecedented streak.

The U.S. is headed for “a deleveraging period” in which the amount of so-called private debt, including consumer borrowing, collapses as government borrowing explodes, Comstock wrote.

Assuming that private borrowers pay down debt at the same pace as they did in Japan after its 1980s economic bubble burst, the savings rate will climb to about 10 percent in 2018, the report said. The estimate was made in a study by the Federal Reserve Bank of San Francisco that Comstock cited. It’s more than double the 4.6 percent rate for June.

Comstocks suggest the U.S. economy may be entering into a lost decade like Japan’s economy.

[Demeter]

30. So What Does a Couple MORE Decades Matter?

We've lost time and ground since Reagan, 1980.

[ozymandius]

10. Judge Takes SEC and Bank of America Lawyers to Woodshed Over Merrill Bonus Settlement

Judge Jed Rakoff pummeled both sides, with his questions focusing on basic issues:

Who exactly knew what when?

Why were not individuals paying fines? This failure to disclose did not drop from the sky.

Why was the settlement so low? ($33 million versus $3.6 billion)

....

What is amusing but also annoying is the cluelessness of both sides. I have a bit more sympathy for the SEC, only because from what little I can tell, the agency's staff has been discouraged from taking a tough line in enforcement for a very long time. Under Arthur Levitt (1003-2001), the SEC was keen to go after certain issues (Levitt, ironically, was big on accounting, for instance), but Congress repeatedly threatened to cut the SEC budget to force Levitt to curb his efforts. The SEC during the Bush Administration was hardly a hotbed of aggressive action. It got on the dot bomb bandwagon because it was impossible not to, given Eliot Spitzer's aggressive stance.

The SEC lawyers at least seem to be embarrassed and don't try offering lame defenses.

http://www.nakedcapitalism.com/2009/08/judge-takes-sec-and-bank-of-america.html

[mbperrin]

24. We need many more like Judge Rakoff, even though he is a radical.

Personal responsibility he wants from corporate types.

Wow.

[ozymandius]

11. Stimulus Funds Bring Relief to States, but What About 2010?

NEW YORK -- As states across the country grapple with the worst economy in decades, most have cut services, forced workers to take unpaid days off, shut offices several days a month and scrambled to find new sources of revenue.

The good news is that much of the pain this year has been cushioned by billions of dollars of federal stimulus money, which has allowed states and localities to avoid laying off teachers, prison guards, police officers and firefighters.

The bad news is that for the next fiscal year, beginning in July, the picture looks even bleaker. Revenue is expected to remain depressed, even if the national economy improves. There will be only half as much federal stimulus aid available, and many states have already used up their emergency reserves.

.....

The economic picture in state capitals has looked bad since last fall, when the national economy first went into freefall and many governors called their legislatures into emergency sessions to make drastic mid-year cuts for such things as health-care services and support for public colleges and universities. But as legislatures have just completed their regular budgeting process, the extent of the fiscal disaster is only now becoming clear -- and some are already talking about additional special sessions this fall, with more painful cost-cutting ahead.

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/10/AR2009081001785.html

[ozymandius]

12. Good morning everyone.

:donut: :donut: :donut:

My day away from here is starting. I will check in periodically, as time allows, and hopefully post some more. I look forward to reading what others post about our current economic conditions.

:hi:

[Dr.Phool]

13. Good morning.

It looks a little lonely around here this morning.

[Festivito]

15. Good quiet morning to all.

Long drives ahead for me with no DU updates. I hope I can handle the time away.

[Dr.Phool]

22. Have a nice trip.

I've got one coming up soon myself.

[Festivito]

14. Debt: 08/07/2009 11,658,212,708,636.47 (DOWN 1,929,745,567.48) (Little.)

(Debt up a little, FICA debt down a bit. It's been like a calm before a storm.)

= Held by the Public + Intragovernmental(FICA)
= 7,330,163,714,788.70 + 4,328,048,993,847.77
UP 290,467,707.81 + DOWN 2,220,213,275.29

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 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: $9.77, ABOUT TEN BUCKS for a 1B$ 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 the report, there should be 307,041,542 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 $37,969.5.
A family of three owes $113,908.49. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 31 days.
The average for the last 24 reports is 5,598,735,622.77.
The average for the last 30 days would be 4,478,988,498.22.
The average for the last 31 days would be 4,334,504,998.27.
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$/day.
There were 138 reports in 199 days of Obama's part of FY2009 averaging -0.36B$ per report, -0.13B$/day so far.
There were 213 reports in 311 days of FY2009 averaging 7.67B$ per report, 5.25B$/day.

PROJECTION:
There are 1,262 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.3T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
08/07/2009 11,658,212,708,636.47 BHO (UP 1,031,335,659,723.39 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: 1,633,487,811,724.00 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
07/20/2009 +000,171,809,229.69 ------------******** Mon
07/21/2009 -000,321,987,025.18 ---
07/22/2009 +000,261,059,305.61 ------------********
07/23/2009 +010,040,233,982.08 ------------**********
07/24/2009 -000,124,358,216.07 ---
07/27/2009 +000,077,777,899.40 ------------******* Mon
07/28/2009 +000,420,333,618.55 ------------********
07/29/2009 +000,733,026,310.02 ------------********
07/30/2009 -026,031,384,097.19 -
07/31/2009 +095,534,108,940.65 ------------**********
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******
08/06/2009 -000,578,106,269.92 ---
08/07/2009 +000,290,467,707.81 ------------********

75,351,034,314.15 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,993,580,905,377.40 in last 323 days.
That's 1,994B$ in 323 days.
More than any year ever, including last year, and it's 196% of that highest year ever only in 323 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 323 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=4008440&mesg_id=4008476

[Festivito]

64. Debt: 08/10/2009 11,661,947,544,315.89 (UP 3,734,835,679.42) (Up .2B.)

(Debt up .2B$, FICA side up three and a half billion. Fixed a couple of problems points: second from last in analysis and deleted three lines from time heavy borrowing started during Bush admin which has no relevance when including mixture of Bush and Obama times.)

= Held by the Public + Intragovernmental(FICA)
= 7,330,385,850,531.73 + 4,331,561,693,784.16
UP 222,135,743.03 + UP 3,512,699,936.39

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 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: $9.77, ABOUT TEN BUCKS for a 1B$ 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 the report, there should be 307,063,142 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 $37,978.99.
A family of three owes $113,936.97. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 6,242,784,279.58.
The average for the last 30 days would be 4,578,041,805.03.
The average for the last 31 days would be 4,430,363,037.12.
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$/day.
There were 139 reports in 202 days of Obama's part of FY2009 averaging 7.39B$ per report, 5.12B$/day so far.
There were 214 reports in 314 days of FY2009 averaging 7.65B$ per report, 5.21B$/day.

PROJECTION:
There are 1,259 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.2T$.
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)
08/10/2009 11,661,947,544,315.89 BHO (UP 1,035,070,495,402.81 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: 1,637,222,647,403.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
07/21/2009 -000,321,987,025.18 ---
07/22/2009 +000,261,059,305.61 ------------********
07/23/2009 +010,040,233,982.08 ------------**********
07/24/2009 -000,124,358,216.07 ---
07/27/2009 +000,077,777,899.40 ------------******* Mon
07/28/2009 +000,420,333,618.55 ------------********
07/29/2009 +000,733,026,310.02 ------------********
07/30/2009 -026,031,384,097.19 -
07/31/2009 +095,534,108,940.65 ------------**********
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******
08/06/2009 -000,578,106,269.92 ---
08/07/2009 +000,290,467,707.81 ------------********
08/10/2009 +000,222,135,743.03 ------------******** Mon

75,401,360,827.49 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power.
Since then US borrowed $1,997,315,741,056.82 in last 326 days.

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=4010081&mesg_id=4010174

[Ghost Dog]

17. Germany Faces Credit Crunch, Mid-Sized Company Survey Shows

Aug. 11 (Bloomberg) -- Germany faces a credit crunch during a recession that may take almost two years to overcome, a survey of 700 medium-sized companies by Ernst & Young LLP showed.

Thirty-seven percent of respondents said financing through their principal bankers has become more difficult, compared with 14 percent in January, Ernst & Young said. The share of medium- sized companies reporting higher documentation and collateral requirements imposed by banks almost tripled to 38 percent from 13 percent.

“We may get hit by a wave of insolvencies if the situation doesn’t clearly ease,” Peter Englisch, a partner at Ernst & Young, told reporters in Berlin today at the report’s release. “German companies’ dependence on bank refinancing is a weakness.”

The survey adds credence to reports suggesting restrictive lending practices by banks may delay the recovery of Europe’s biggest economy. Companies want Chancellor Angela Merkel’s government to do more to help improve their liquidity situation, the survey showed.

/... http://www.bloomberg.com/apps/news?pid=20601100&sid=agkY.YBU0s_I

Considering German companies' normally close relationships with their banks, this would indicate more difficulties at companies, rather than at banks, and reflects falling EU domestic spending, which seems to be apparent everywhere but less so in France, where I've just been spending some time (Languedoc). Slow-moion trainwreck continues...

[UpInArms]

18. dollar watch

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

Last trade 79.108 Change -0.092 (-0.12%)

Wholesale Prices Expected to Decline Sharply, Euro May Follow

http://www.dailyfx.com/story/special_report/special_reports/Wholesale_Prices_Expected_to_Decline_1249966690392.html

German wholesale prices are expected to have contracted by a sharp amount in July after labor data came in significantly weaker-than-expected. Asia saw the Bank of Japan state that conditions in the country had improved after a resurgence in exports and industrial production, but failed to give any hints as to whether the bank would raise its policy rate at any time in the coming months.

Key Overnight Developments

• Australian Business Confidence Rises to Two-Year High
• Bank of Japan Says Conditions Are Improving
• China Exports Surge on Rise in U.S. Demand

Critical Levels



Euro price action remained mostly calm throughout the day after five consecutive sessions in which the currency lost value against the U.S. Dollar. Losses on the pair may be coming to an end after inching closer toward upward sloping support dating back to the lows on 06/16, 07/08, and 07/30. At the time of this publishing the British Pound

...more...

Euro / US Dollar Reversal is the Real Deal

http://www.dailyfx.com/story/topheadline/Euro___US_Dollar_Reversal_1249941681064.html

A recent divergence between the Euro futures contract and the US dollar index is just one piece of evidence suggesting that the EURUSD has reversed course. Additional evidence includes a long term cycle, wave structure at multiple degrees of trend, and recent momentum considerations.



Market turns almost always occur with divergence. The most commonly recognized divergence is momentum (such as RSI) divergence whereas a new high is not confirmed by a new high in momentum and vice versa. A different kind of divergence occurs when similar markets fail to confirm new highs or lows. Equity technicians watch the Dow Industrial average and the Dow Transportation average at potential turning points. If one index fails to confirm the other’s new high or low, then the probability of a reversal is increased. This dynamic has occurred on 3 occasions since mid 2008*.

July 2008: Euro trades above prior high set in April 2008 but USD index fails to drop below April 2008 low - USD bullish reversal

March 2009: USD index trades above prior high set in November 2008 but Euro fails to drop below November 2008 low - USD bearish reversal

Now: USD index trades below prior low set in December 2008 but Euro fails to exceed its December 2008 high - USD bullish reversal?

...more...

[UpInArms]

19. Distressed-debt deals in 2009 reach $84.4 billion: report

http://www.reuters.com/article/businessNews/idUSTRE57A0SD20090811?feedType=RSS&feedName=businessNews

(Reuters) - The total value of distressed-debt deals, where creditors use their debt positions to take ownership of troubled companies, has touched $84.4 billion this year, the Wall Street Journal said, at a pace close to double that of 2008.

The newspaper, citing data compiled by data provider Dealogic, said 140 distressed-debt deals have been struck during 2009, compared with 102 for all of 2008.

It said the deals involved every sector of the U.S. economy from auto parts maker Delphi Corp to retailer Eddie Bauer and included corporate takeovers, covering several kinds of transactions related to bankruptcies, restructurings, recapitalizations or liquidations.

The total value of distressed-debt deals in 2008 was about $20 billion, according to the paper.

[DemReadingDU]

25. Karl Denninger is a bit angry

8/10/09 Karl Denninger: DAMNIT, STOP THE LOOTING NOW!
.
.
.
Mr. President, Ben Bernanke, Tim Geithner, and Members of Congress:

Exactly who in the hell do you think you work for? More to the point, what part of the following don't you get?


That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.


You learned this stuff right? You all swore an oath - to uphold The Constitution against all enemies foreign and domestic. You're aware that The Constitution came about as a direct and proximate cause of the document cited above, yes?

Your duty is not to uphold The Robbing, Thieving Bankers - it is to uphold THE CONSTITUTION.

It is pretty damn clear to this commentator that what our "banking industry", by its own words and actions over the last five years, DEMONSTRATED THAT IT IS A DOMESTIC ENEMY OF THE NATION AND CONSTITUTION OF THE UNITED STATES!

Do those of you in Washington understand that robbery at this grand scale cannot work and must not be allowed to continue? Do you understand that "Pax Romana" was brought down by this very same sort of corruption? Do you understand that we are absolutely dependent on CHINA and JAPAN to fund our operating credit requirements in The Federal Government, and that should they give us the finger The Federal Budget would implode by 50% overnight?

IF THAT HAPPENS HOW WILL YOU FEED THE PEOPLE?

Do you understand that these frauds and thieves are not the Chinese and Japanese, nor the Saudis? That they have the money, and we need to borrow it? That they have oil, and we need to buy it? That they are not stupid and that eventually they will tire of the lying, thieving and political misdirection, and if they do before you clean up this crap our nation is absolutely, irretrievably and without question SCREWED?

I love my country, but today, I fear for her future.

WAKE UP AMERICA.

STOP THE LOOTING AND START PROSECUTING.

full text...
http://market-ticker.denninger.net/archives/1317-DAMNIT,-STOP-THE-LOOTING-NOW!.html

[Demeter]

31. Amen!

[tclambert]

46. And break up the "too big to fails!"

[DemReadingDU]

26. Bloomberg: Treasurer Fear of Credit Freeze Seen in Cash Hoarding

8/10/09 Treasurer Fear of Credit Freeze Seen in Cash Hoarding

Two years after credit markets seized up and caused the worst financial crisis since the Great Depression, companies are hoarding the most cash in at least a decade.

“Every action we take or contemplate taking is measured by its impact on our balance sheet and liquidity,” Mark Jacobs, the chief executive officer of Houston-based RRI Energy Inc., told analysts and investors on Aug. 3. The company sold its Texas retail electricity business and the Reliant brand name in May, helping triple cash and equivalents from a year earlier to 18 percent of assets, according to data compiled by Bloomberg.

Even as government reports show that the first global recession since World War II may be easing, corporate treasurers are raising cash as fast as they can, wary of losing access to capital. Corporate defaults reached 10.7 percent worldwide in July, the highest since 1991, according to Moody’s Investors Service. Credit markets that started to freeze in August 2007, have now triggered more than $1.5 trillion in writedowns and losses at the world’s biggest financial institutions.

Cash and short-term investments accounted for about $1.98 trillion, or 8.2 percent, of assets at the end of the second quarter for companies in the Standard & Poor’s 500 index, up from about $1.6 trillion, or 6.4 percent, a year earlier, Bloomberg data show. Cash reached a record $2 trillion in the first quarter, 8.3 percent of assets.

‘Cash is King’

“Cash is king,” said Paul Kasriel, the chief economist at Northern Trust Corp. in Chicago. “Businesses are in survival mode right now.”

full text...
http://www.bloomberg.com/apps/news?pid=20601109&sid=aiaPcxn9NpYk

[FarCenter]

27. Cash and rebuilding of balance sheets is a good thing

Businesses with cash can finance their own operations and expansions and not depend on the CITs, GE Capitals and the whole shadow banking system of selling Collaterized Loan Obligations to foreign banks and investors.

[DemReadingDU]

32. Exactly!

And that's what people should be doing...saving and paying off debts.

They shouldn't be trading their good running paid-off 'clunker' for a new car by going into debt for 5 more years. Just nuts. Unless, they can pay cash for the new car.

[tclambert]

47. Where are they finding cash to hoard?

Damn, I better check under my mattress. Maybe they found my hoard.

[DemReadingDU]

60. LOL

mine is hoarded in the mattress

[AnneD]

33. Morning Marketeers.......

:donut: and lurkers. I have been out of pocket and on my new job for the last few days. The kids haven't arrived yet (Aug 24th is when school starts for kids). Already I feel 100% better and realize I made a good move. I am finally getting some good job karma going. The school is 'in the hood' and while some folks may not think it is a good place to work-I have always liked it because 1)I can make a real difference in these kids life 2)my services are really appreciated. The fact that we have a great principal and the staff is warm and friendly is just icing on the cake. I can see myself retiring out of this school. That is the good news.

I had something disturbing happen to me yesterday when I went to get gas. I had 13 bucks on me and I was going to get $13 dollars worth. I man came around and very cautiously and slowly started talking to me (he was tall muscularly built middle aged black man)and said-ma'am, I am sorry to trouble you but I am suppose to start a job tomorrow, but I have to come up with $25 that I owe for our room. That's my wife over there (he pointed to a woman and a mid size SUV packed with stuff).
I was listening and thinking about his story and then he said- ma'am. These hands are use to working, not asking for a hand out (they did indeed look rough and calloused). I'm embarrassed that my wife has to see me do this.

Well, at that point I was reaching into the coin purse. If I wasn't so low on gas-I would have given him the ten, but I did give him the three and hoped he could get more. I am a hard case when it comes to pan handling-but I think there was some truth to the story. He offered to pump my gas for me but I told him that it was ok-I had been there too-where $25 dollars just have well been $250.

So was I taken or are times so bad that good people are having trouble. I wished him luck on the new job and his wife thanked me for helping. I went in and was grateful I could pay for my gas and had just had a good meal.

[Hugin]

37. Here's one way to look at it, AnneD.

Would you rather give $3 to 4,000,000 people and hope they'd put it to good use? (Which, I'm sure a large percentage would.) or
Give 1 (one) corrupt CEO $12,000,000 which would arguably never see the light of day again? (In spite of the Supply-side Trickle-down Theory's claims.)

[AnneD]

38. Money, like manure......

works best when spread about.

[tclambert]

48. I think that's the Texas version of Ecclesiastes 11:1

"Cast your bread upon the waters, for after many days you will find it again."

Is it wrong if I like the Texas version better than the Bible?

[AnneD]

53. Not by me.......

;-)

[SidneyCarton]

63. It's very common where I live in Riverside CA.

The gas station near the University is next to a motel often used by transients. Being a starving student who often has only enough to fill the tank, it's not often I can help, but it is heartbreaking. Seeing those men, I think of my own wife and child and think "There but for the grace of God, go I."

[Demeter]

34. Well, We Have Reached the End of the First Act, It Seems

When the typical theatrical show has two acts, in the first one everything gets as bollixed up as possible, desperate plans are made and implemented, and in the second act, we see if they can pull themselves out of their mess and live happily ever after.

So, everyone who makes a living by guessing (economists, politicians, banksters) is guessing that Bernanke has saved us from a Greater Depression, that this is as bad as it will get, and that by mid-term elections everything will be hunky-dory, oh, and the Health Insurance will fly without a Public Option, too.

Even Paul Krugman is saying this! (to quote Dave Barry: I am NOT making this up!)


Do we believe them?

-------------------------------------------

Averting the Worst By PAUL KRUGMAN
Published: August 9, 2009

So it seems that we aren’t going to have a second Great Depression after all. What saved us? The answer, basically, is Big Government.

Just to be clear: the economic situation remains terrible, indeed worse than almost anyone thought possible not long ago. The nation has lost 6.7 million jobs since the recession began. Once you take into account the need to find employment for a growing working-age population, we’re probably around nine million jobs short of where we should be.

And the job market still hasn’t turned around — that slight dip in the measured unemployment rate last month was probably a statistical fluke. We haven’t yet reached the point at which things are actually improving; for now, all we have to celebrate are indications that things are getting worse more slowly.

For all that, however, the latest flurry of economic reports suggests that the economy has backed up several paces from the edge of the abyss.

A few months ago the possibility of falling into the abyss seemed all too real. The financial panic of late 2008 was as severe, in some ways, as the banking panic of the early 1930s, and for a while key economic indicators — world trade, world industrial production, even stock prices — were falling as fast as or faster than they did in 1929-30.

But in the 1930s the trend lines just kept heading down. This time, the plunge appears to be ending after just one terrible year.

So what saved us from a full replay of the Great Depression? The answer, almost surely, lies in the very different role played by government.

Probably the most important aspect of the government’s role in this crisis isn’t what it has done, but what it hasn’t done: unlike the private sector, the federal government hasn’t slashed spending as its income has fallen. (State and local governments are a different story.) Tax receipts are way down, but Social Security checks are still going out; Medicare is still covering hospital bills; federal employees, from judges to park rangers to soldiers, are still being paid.

All of this has helped support the economy in its time of need, in a way that didn’t happen back in 1930, when federal spending was a much smaller percentage of G.D.P. And yes, this means that budget deficits — which are a bad thing in normal times — are actually a good thing right now.

In addition to having this “automatic” stabilizing effect, the government has stepped in to rescue the financial sector. You can argue (and I would) that the bailouts of financial firms could and should have been handled better, that taxpayers have paid too much and received too little. Yet it’s possible to be dissatisfied, even angry, about the way the financial bailouts have worked while acknowledging that without these bailouts things would have been much worse.

The point is that this time, unlike in the 1930s, the government didn’t take a hands-off attitude while much of the banking system collapsed. And that’s another reason we’re not living through Great Depression II.

Last and probably least, but by no means trivial, have been the deliberate efforts of the government to pump up the economy. From the beginning, I argued that the American Recovery and Reinvestment Act, a k a the Obama stimulus plan, was too small. Nonetheless, reasonable estimates suggest that around a million more Americans are working now than would have been employed without that plan — a number that will grow over time — and that the stimulus has played a significant role in pulling the economy out of its free fall.

All in all, then, the government has played a crucial stabilizing role in this economic crisis. Ronald Reagan was wrong: sometimes the private sector is the problem, and government is the solution.

And aren’t you glad that right now the government is being run by people who don’t hate government?

We don’t know what the economic policies of a McCain-Palin administration would have been. We do know, however, what Republicans in opposition have been saying — and it boils down to demanding that the government stop standing in the way of a possible depression.

I’m not just talking about opposition to the stimulus. Leading Republicans want to do away with automatic stabilizers, too. Back in March, John Boehner, the House minority leader, declared that since families were suffering, "it’s time for government to tighten their belts and show the American people that we ‘get’ it." Fortunately, his advice was ignored.

I’m still very worried about the economy. There’s still, I fear, a substantial chance that unemployment will remain high for a very long time. But we appear to have averted the worst: utter catastrophe no longer seems likely.

And Big Government, run by people who understand its virtues, is the reason why.

FRANKLY, I'M NOT CONVINCED. ASIDE FROM SHIFTING ALL POSSIBLE BALLAST TO THE OTHER SIDE OF THE "USS ECONOMY" TO TRY TO KEEP HER LEVEL, NOTHING HAS BEEN DONE ABOUT THE MANY HOLES IN HER HULL. NOR HAVE WE LEFT THE ICEBERG ZONE. OR BAILED, EVEN. THE PUMPS ARE IDLE AND UNMANNED.

WHAT KIND OF LEVEL OF DENIAL IS THIS? WE WILL NEED NEW TERMS FOR IT.

I think I'll have to use Sondheim's "Into the Woods" for Friday's theme. The irony would be too much.

[AnneD]

39. Actually, Voltaire's Candide is a better choice.....

after all, this is the best of all possible worlds.






http://en.wikipedia.org/wiki/Candide

[tclambert]

50. If you are suggesting this is NOT the best of all possible worlds,

are you ready to recommend that we fire God?

Wanted: Deity. All powerful, all knowing. Competency in economics a plus.

[AnneD]

57. Voltaire (and I)...

was sarcastic when he say it is the best of all possible worlds. Candid is a classic worth the read. I read it at a very tender age (14) and I always remembered it. Time for a re-read though.

[Demeter]

54. Candide Might Suit Iraq Better

Candide dealt with reality of war-torn Europe.

Into the Woods deals with fairy tales...and the results of actions taken or not taken.

[AnneD]

58. It was the Lisbon earthquake and

ensuing tsunami that got him to put pen to paper. But the sarcastic tone he set is the antidote to all the happy talk rah rah blow smoke up your skirt economic news we are getting these days. For Iraq and Afghanistan and all the stop loss-Catch 22.

[tclambert]

49. I completely agree with Krugman on this one.

I hardly ever completely agree with anyone. I think you mostly agree with him, too. He did say the economy is fragile, and it is way down from where it should be. Nine million jobs short of where it should be. That would take 3 good to great years to make up. Maybe more because the population keeps growing.

I agree with you that we are still in the "iceberg zone." But I disagree about the pumps and the bailing. The TARP bailout wasn't the most efficient way to save the "too big to fails," but it sure looks like they're saved. The stimulus package is just starting to get going, but it is already showing positive results. The Cash For Clunkers program worked better than anyone expected. Krugman says the stimulus has already saved or created 1 million jobs. That's at least a million better than McCain/Palin would have done. (Oh, man, the idea of a McCain/Palin administration. :scared: )

[Demeter]

55. I'd Rather Save People Than Institutions

It's just my personal foible. And those Too Big to Fails are just whistling past the graveyard, hoping to keep the rigged game going. They will fail, and fail within Obama's 8 years (I do think that he will be re-elected, if only for the lack of alternatives, and Howard Dean's gentlemanly manners.)

[Demeter]

35. CIT delays report, could have to file for bankruptcy

http://news.yahoo.com/s/nm/20090811/bs_nm/us_cit_filing_2

NEW YORK (Reuters) – Troubled lender CIT Group Inc (CIT.N) said on Tuesday it has delayed filing its second-quarter report with regulators and said if it could not complete its debt tender or arrange other financing, it would file for bankruptcy.

CIT is still reviewing assets and businesses that it may sell as well as the related valuation adjustments that must be included in the quarterly report, it said in a filing with the U.S. Securities and Exchange Commission.

New York-based CIT, which last month secured $3 billion in emergency funding from bondholders, has been battling to restructure its debt and avoid bankruptcy.

The company has launched a tender offer for its outstanding $1 billion floating-rate notes due August 17. In a filing on Tuesday, it said if this offer were successful, it would use the proceeds from its emergency funding to complete the tender and make the payment on the August 17 notes.

The 101-year-old lender had already postponed its results, originally expected on July 23, while arranging the emergency funding. It said last month it expected a second-quarter loss of more than $1.5 billion.

Shares in the company slipped slightly to $1.46 in premarket trading, down from $1.48 on Monday.

NOT LOOKING GOOD--STILL HOPING FOR A BAILOUT, IT SEEMS.

[Demeter]

36. Treasurys up before auction of 3-year notes

http://www.marketwatch.com/story/treasurys-up-before-first-auction-of-refunding-2009-08-11?siteid=yahoomy

NEW YORK (MarketWatch) -- Treasury prices advanced on Tuesday, pushing yields down for a second day, before the government kicks off $75 billion in debt sales with a record sale of three-year notes.

The auction is the first leg of the Treasury Department's quarterly refunding, traditionally its largest debt sales.

Yields on benchmark 10-year notes, which move inversely to prices, declined 8 basis points to 3.69%. A basis point is 0.01 percentage point.

Two-year-note yields declined 6 basis points to 1.18%.

Treasury yields reached a two-month high on Friday after data showed the U.S. economy lost the fewest jobs in July in almost a year. Stocks jumped on the news but have headed lower since, with investors reconsidering exuberance over an economic recovery that most economists expect to be tepid and slow.

"Treasurys continue to find buyers as higher yields have brought out investors at the same time that stocks are giving back their gains," said Kevin Giddis, managing director of fixed income for Morgan Keegan & Co.

In recent trade, the Standard & Poor's 500 Index fell about 1.3%.

Bids on the $37 billion in three-year notes are due at 1 p.m. Eastern Time.

The securities to be sold during the session yielded 1.83% in early trading, according to RBS Securities. That's "very near the cheap end of the one-month range," said William O'Donnell, head of Treasury strategy at the firm, which is one of 18 primary government-securities dealers required to bid at Treasury auctions.

The government will also sell a record $23 billion in 10-year debt on Wednesday and $15 billion in 30-year bonds on Thursday, also the largest ever.

The Treasury restarted monthly sales of three-year debt in November, after a 16-month absence. The move is part of a plan to spread out the growing amount of debt it needed to sell to finance a bevy of government stimulus programs, and central-bank activities to ease strains in financial markets and cushion the economy's slowdown.

The government also began issuing 10- and 30-year bonds more frequently to spread out issuance, and it now effectively sells both securities monthly.

Bonds remained up after the Federal Reserve Bank of New York bought $2.704 billion in Treasurys on Tuesday, after a short delay in the release and closing time.

The Fed has been fairly consistent in repurchasing similar amounts of debt in a given maturity range throughout its buyback operations. The past two times the Fed bought from this sector, it purchased $3 billion and $3.2 billion.

Dealers submitted to the Fed $11.32 billion in debt maturing between 2026 and 2039.

The U.S. central bank has purchased more than $250 billion of the $300 billion in U.S. debt it promised in March to buy in an effort to keep borrowing costs, particularly for companies and homebuyers, affordable.

The program's future is one of the main things about which investors will look for more guidance after the Federal Open Market Committee's two-day monetary-policy meeting, which began Tuesday.

Analysts expect the central bank to allow its program of buying Treasurys to expire when that amount is reached, likely sometime next month. See previous story on Fed buybacks. LINK AT ARTICLE

Analysts predict little change to Fed officials' statements about leaving interest rates unchanged for some time. The federal-funds rate, the target overnight lending rate between banks, has remained at a range of zero to 0.25 percentage point since December.

Treasurys were also supported by data from the Labor Department showing second-quarter productivity jumped 6.4% and unit labor costs fell 5.8%, indicating a lower risk of inflation. See more on productivity data.

"The massive increase in productivity growth that we anticipate and the consequent decrease in unit labor costs should make less daunting the Federal Reserve's difficult task of bringing an end to the economic recession without setting the stage for future inflation," wrote Joe Liro, an economist for Stone & McCarthy Research.

[tclambert]

40. Fannie Mae now over $1 per share.

Volume very heavy today. Who is buying so many shares of Fannie Mae?

I'm not complaining. My micro-investment is now in the black. It's just weird. The share price has doubled in about a week.

[TheWatcher]

42. Glad you are doing well with it, but keep CLOSE Eye on it tclambert.

You know that this isn't weird or real, it is large scale manipulation and it has a purpose.

Get out at the top on that one, if you can.

It's been a good play on your part so far, but be wary of The House.

You are playing in a Casino, not a real Market.

[tclambert]

51. I don't play short term. That's not where players like me have a window of opportunity.

The short term belongs to those manipulators. But they don't tend to look at the 3 to 5 year outlook. They can't. They have to maintain liquidity and profitability in the short term, like THIS QUARTER, or less. If I sold today, I'd be up 28% on paper, less after broker's fees. But I'm looking for investments that have the potential to double or triple.

Ford, for example. (I missed that opportunity, darn it.) February 20th, Ford was at $1.58. Today: $7.82. That's almost a factor of FIVE!

I did buy some Forever Stamps, though.

[mullard12ax7]

43. Oh it's just good ole American investors who recognized a great company

There's no manipulation going on and even if there was, why not get a piece of the action yourself? We all have families to feed, so what if we invest in companies full of frauds and criminals, who cares! War is a great investment too, we've got Israel, Iraq, Iran, Afghanistan, N. Korea; all kinds of enemies real or invented but again, who cares! Show me the money!

[tclambert]

52. Can I invest in Obama Death Panels?

Sarah Palin says that's a growth industry.

[Demeter]

56. Bernanke, Would Be My Guess

He's buying everything.

With Any Luck, this continuing disaster will take out the Federal Reserve, along with the Too Big to Fails.

[Ghost Dog]

59. Wall Street weighed down by financial stocks

NEW YORK (Reuters) - Stocks fell on Tuesday after a prominent banking analyst warned the sector's fundamentals have yet to improve, and an unexpectedly large drop in wholesale inventories raised worries about an economic recovery.

Financial stocks, which had gained about 25 percent in the last month, tumbled after Rochdale Securities analyst Richard Bove painted a gloomy outlook for the banking industry. He said bank stocks are trading on "fumes," and he expects a short-term pull-back in their stock prices.

"Banks aren't out of the woods yet," said Kevin Kruszenski, Head of Listed Trading at KeyBanc Capital Markets in Cleveland.

"There are some worries about additional equity that needs to be raised. The market is going to have a hard time moving meaningfully higher without them," Kruszenski said.

The drop in wholesale inventories in June, which was nearly double expectations, suggests that businesses remained skeptical about a return in demand.

/... http://www.reuters.com/article/wtUSInvestingNews/idUSTRE57325J20090811