STOCK MARKET WATCH, Thursday December 24

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday December 24, 2009

Bush Administration Officials Convicted = 1
Name(s): David Safavian

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 11

AT THE CLOSING BELL ON December 23, 2009

Dow... 10,466.44 +1.51 (+0.01%)
Nasdaq... 2,269.64 +16.97 (+0.75%)
S&P 500... 1,120.59 +2.57 (+0.23%)
Gold future... 1,095 +7.80 (+0.72%)
10-Yr Bond... 3.75 +0.00 (+0.05%)
30-Year Bond 4.61 0.00 (-0.07%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie, Silver and US$

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Handy Links - Market Data and News:
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Handy Links - Videos:
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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

[Demeter]

1. Ha! Good Morning, Ozy! And Merry Christmas!

After a completely uneventful newspaper delivery, a child who did not destroy the house in my absence, and a hearty breakfast, I am STILL first rec and first poster. On a roll, here!

[ozymandius]

3. Good morning, Demeter.

:donut: :donut: :donut:

Merry Christmas to you too. I am looking forward to celebrating Newtonmas. Sir Isaac Newton's birthday is tomorrow.

Sounds like you're having a rollicking start to your day.

[ozymandius]

2. Market Observation

Sector Rotation
Mid & late-stage cyclicals positioned for the next phase of this cyclical bull market
BY CHRIS PUPLAVA

A key tenant to profitable investing is being in the right areas at the right time. For example, during the highly inflationary 1970s the best performing sectors were basic materials and energy (commodities) while inflation-sensitive sectors such as financials and consumer discretionary performed poorly. In the 1990s there was the advent of the Internet and a technological revolution and the returns from the technology sector were far above the other S&P 500 sectors. However, investing in technology this decade has led to disappointment as the sector was working off rich valuations that built up during the prior decade as the technology bubble burst.

The above examples illustrate how long term macro fundamentals shape various sectors performance relative to other sectors and the broad market. In addition to broad fundamental factors there is a typical pattern seen in how various sectors perform throughout the different periods of the business cycle, and rotating one’s investment capital to the sectors that are poised to perform the strongest during each phase of the business cycle has shown to lead to superior returns and led to the advent of sector rotation investing.

Sector rotational investing was mainly conducted by investment professionals but is now practiced by a wider audience, thanks to investment books on the topic and the advent of exchange traded funds (ETFs) that mimic the performance of the ten S&P 500 sectors. The Bible for sector investing was written by Standard & Poor’s Sam Stoval who wrote Sector Investing in 1996. Based on Sam Stoval’s observations of the ten different S&P sectors response to the business cycle, John Murphy from StockCharts.com created a sector rotational model that highlights which sectors perform best during the stock market and business cycle. As stocks discount economic news in advance the stock market cycle (red area) leads the economic cycle (green area) by an average of six months as seen below.

-see chart-

As seen in the sector rotational model above, the consumer cyclical (consumer discretion) and technology sectors typically perform the best after the conclusion to a bear market and are later followed my mid-cycle (industrials) and late-cycle (basic materials and energy) sectors. The defensive consumer staples and health care sectors often perform best just as the economy is peaking. This stylized cycle this year has played out exactly as the model suggests and is a near perfect replay of the 2003 stock market bottom in which the early cyclicals like technology and consumer discretionary outperformed the mid and late stage cyclicals such as energy and industrials.

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

[ozymandius]

4. Today's Reports

08:30 Initial Claims 12/19
Briefing.com 465K
Consensus 470K
Prior 480K

08:30 Continuing Claims 12/12
Briefing.com 5200K
Consensus 5170K
Prior 5186K

08:30 Durable Goods Orders Nov
Briefing.com 1.2%
Consensus 0.5%
Prior -0.6%

08:30 Durable Goods Orders ex Auto Nov
Briefing.com 0.3 %
Consensus 1.1%
Prior -1.3%

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

[ozymandius]

29. weekly unemployment data is in

Here is a link to the press release.

SEASONALLY ADJUSTED DATA

In the week ending Dec. 19, the advance figure for seasonally adjusted initial claims was 452,000, a decrease of 28,000 from the previous week's unrevised figure of 480,000. The 4-week moving average was 465,250, a decrease of 2,750 from the previous week's revised average of 468,000.

The advance seasonally adjusted insured unemployment rate was 3.9 percent for the week ending Dec. 12, unchanged from the prior week's unrevised rate of 3.9 percent.

The advance number for seasonally adjusted insured unemployment during the week ending Dec. 12 was 5,076,000, a decrease of 127,000 from the preceding week's revised level of 5,203,000. The 4-week moving average was 5,233,000, a decrease of 90,000 from the preceding week's revised average of 5,323,000.

The fiscal year-to-date average for seasonally adjusted insured unemployment for all programs is 5.673 million.

UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 561,902 in the week ending Dec. 19, an increase of 6,492 from the previous week. There were 719,615 initial claims in the comparable week in 2008.
The advance unadjusted insured unemployment rate was 4.1 percent during the week ending Dec. 12, an increase of 0.2 percentage point from the prior week. The advance unadjusted number for persons claiming UI benefits in state programs totaled 5,385,774, an increase of 193,030 from the preceding week. A year earlier, the rate was 3.4 percent and the volume was 4,594,820.

[ozymandius]

37. Here's the raft of numbers from Briefing.com

08:30 Initial Claims 12/19
Actual 452K
Briefing.com 465K
Consensus 470K
Prior 480K

08:30 Continuing Claims 12/12
Actual 5076K
Briefing.com5200K
Consensus 5170K
Prior 5203K
Revised from 5186K

08:30 Durable Goods Orders Nov
Actual 0.2%
Briefing.com 1.2%
Consensus 0.5%
Prior -0.6%

08:30 Durable Goods Orders ex Auto Nov
Actual 2.0%
Briefing.com 0.3%
Consensus 1.1%
Prior -0.7%
Revised from -1.3%

[ozymandius]

5. Oil rises above $77 after US crude supply drop

SINGAPORE – Oil prices extended gains above $77 a barrel Thursday in Asia as a larger than expected drop in U.S. crude supplies fueled investor optimism that consumer demand is improving.
.....

The contract rose $2.27 to settle at $76.67 on Wednesday after the Energy Department's Energy Information Administration said U.S. crude inventories fell 4.9 million barrels. Analysts had expected a drop of 2.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
.....

In other Nymex trading in January contracts, heating oil rose 0.82 cent to $2.02 while gasoline gained 1.03 cents to $1.98. Natural gas jumped 6.8 cents to $5.89 per 1,000 cubic feet.

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

[ozymandius]

6. Ahead of the Bell: Fall in (natural) gas reserves expected

NEW YORK – The Energy Department on Thursday is expected to report a draw of 171 billion to 175 billion cubic feet of natural gas storage inventories for the week ended Dec. 18., according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

http://news.yahoo.com/s/ap/20091224/ap_on_bi_ge/us_natural_gas_ahead_of_the_bell_1

The report will be released at 10:30 ET.

[ozymandius]

7. Obama 'entirely dissatisfied' with jobless rate

WASHINGTON (AFP) – US President Barack Obama said Wednesday he is "entirely dissatisfied" with the level of US unemployment and cannot congratulate himself on his first year in office between the jobless rate is so high.

"I am entirely dissatisfied with where we are right now in terms of jobs, and the fact that families out there on the eve of Christmas are still really worried," Obama said in an interview with public television station PBS.
.....

The president noted that his administration faced an unusually tough set of challenges.*

http://news.yahoo.com/s/afp/20091224/ts_alt_afp/uspoliticsfinanceeconomyunemployment

---

*Ya think?

[Tansy_Gold]

10. Let's see. Water is still wet.

If the man had the slightest clue as to what CAUSES joblessness -- hint, Barry: it's corporations that ship the jobs overseas/across the border so the CEOs and stockholders can make more money off the slave labor they now employ -- he might have a chance of fixing it.

Follow the money.



Tansy Gold, taking a break from the furious assault on the last commissioned holiday gift. . . . .

[Demeter]

23. One Has to Wonder Who Is Writing His Material

or preparing his briefing papers. Can anybody be that divorced from the common herd? Other than the Goldman drones?

Did you know? Lieberman has a nickname--Joe the Bummer! Courtesy of a guest on NPR's Wait-Wait.

[ozymandius]

8. Americans increase spending, but not on new homes

WASHINGTON – Americans are starting to spend a bit more money, but not enough to power a strong economic recovery.
.....

Americans' income, meanwhile, ticked up at the fastest rate in six months last month, though the 0.4 percent increase was less than economists expected. That reflected a $16.1 billion increase in wages and salaries, helped by last month's drop in unemployment.

But consumers are still worried about job security, and that weighs on decisions about big purchases like new homes.

The 11 percent slump in new home sales from October's pace shows that consumers are taking their time following an extension of a deadline for first-time buyers to qualify for a tax credit. The incentive, worth up to $8,000, was set to expire at the end of November. But Congress pushed back the date to April 30 and expanded the program to include current homeowners who move.

http://news.yahoo.com/s/ap/20091223/ap_on_bi_go_ec_fi/us_economy

---

In terms of healthy economic activity, new home sales are far more important than existing home sales. So suffice to say: these numbers are not good. This is probably as good as these stats are going to get as we look toward 2010.

[54anickel]

43. So are we buying more cheap shit from China to drive up the trade deficit again? Oh, yeah and

Merry Christmas everybody!

Funny thing about this paragraph - something that's in the best interest of people (paying down debts) is looked upon as bad news for the markets. The world is upside down.

"People are continuing to pay down their debts, and they remain concerned about their financial futures and whether they will have jobs," said Sal Guatieri, an economist at BMO Capital Markets. "Santa's toy bag won't exactly be brimming with goodies this year, but at least he will show up, unlike last year."

[TheWatcher]

9. So, Now That Goofy Has Promised Us The Jobs Will be Back by Spring

http://news.yahoo.com/s/ap/20091223/ap_on_bi_ge/us_geithner_economy

(This was no doubt posted here Yesterday, but I have just now seen it)

I can think of no better way to Praise our Lord and Savior than to break into song:

(This is a re-post for anyone who missed it in LBN this morning)

Springtime For Geithner

SPRINGTIME for Geithner and Bernanke

(deet da deet deet)

Goldman Is Happy And Gay
The Fed Is Printing At A Faster Pace
Employment Continues To Debase

SPRINGTIME For Geithner And Bernanke

(deet da deet deet)

Winter For The Poor and Middle Class

SPRINGTIME For Geithner And Bernanke

Come On Banksters, Go Into Your Dance

(Stormtroopers Citi, BOA, JPM, Wells Fargo): "We Were Feeling Down And Out, but Then The Fed Just Bailed Us Out"

(Stormtrooper Ben): "Don't be Stupid be A Smarty, Tow The Line Of the Corporatist Party"

(CNBC Dancing Girls)

(Big Finish)

SPRINGTIME For Geithner And Bernanke

Recovery Is Here Now, We Swear.

Jobs Falling from the Sky Today
Propaganda will make it all OK

SPRINGTIME For Geithner And Bernanke

The Dow Jones Is Soaring Once More

SPRINGTIME For Geithner And Bernanke

Now All That We Need Now
All That We Need Now

All That We Need Is Another WAR!!!!!!!!!!!!!!!!!!!!!!!



The Shell Game Continues

And We The People Are The Mark.

Merry Christmas Marketeers.

And God Help Us All.

Viva Recovery!

[ozymandius]

11. Well done!

So Tiny Timmy is making predictions. He should know better than to open his piehole about such things.

[DemReadingDU]

17. They have their excuse. Never saw it coming.

Everything looks good to them, all the manipulations are working. So when the downturn comes, and it will, they never saw it coming.

Extend and pretend, until it stops.

[rfranklin]

31. Except that we now know that Goldman was priming the pump for disaster...

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x73810

[ozymandius]

33. CR: Extend and pretend. Fail and flail.

As HAMP Fails, Treasury Flails

From Bloomberg: Homeowners Get More Time for Home-Loan Modifications

Mortgage servicers must give U.S. homeowners more time before kicking them out of the government’s loan-modification program ... Servicers can’t cancel an active Home Affordable trial modification scheduled to expire before Jan. 31 for any reason other than property eligibility requirements, according to a posting today on a government Web site. ...

“The Treasury Department believes that this further guidance and associated requirements will provide more certainty and transparency regarding the final determination of eligibility for borrowers in trial modifications,” Meg Reilly, a department spokeswoman, said in an e-mailed statement.

Extend and pretend. Fail and flail.

more at CR - including Treasury's blithering response.

[Demeter]

24. Thanks for posting that parody

would have hated to have missed it.

[ozymandius]

12. Fannie, Freddie Executives Get Big Payday

...
The Federal Housing Finance Agency approved compensation plans for Fannie Chief Executive Michael Williams and Freddie CEO Charles Haldeman Jr. Those packages are expected to be in a range of $4 million to $6 million, people familiar with the matter said. The companies are expected to spell out pay details for their top executives in securities filings Thursday morning.

The Christmas Eve announcement is likely to provoke a fresh round of controversy concerning the federal government's role in propping up the two companies. Taxpayers have pumped more than $100 billion of capital into both firms to keep them from collapsing amid huge losses stemming from falling home prices and mortgage defaults.
.....

Government and company officials struggled with another issue: It was difficult to tie compensation to the firms to long-term performance, because the long-term picture for the companies remains unclear. These decisions could prove controversial, because the Obama administration has urged many companies to tie executive pay to long-term performance.

http://online.wsj.com/article/SB126161634214403629.html

---

Once again, "less bad" is the "new good."

[Tansy_Gold]

13. "Controversial" my ass.

The execs will get their money, a few minor and easily dismissed pundits will excoriate them, and in a week or so it will be as if it never happened.





Tansy Gold, goin' back to work

[hamerfan]

14. Lemme see if I've got this correct...

The worse you run a company, the better compensated you are. Is that about right? :crazy:

[ozymandius]

16. I have years of observation to support my belief that running a company into the ground

is part of the job description.

[ozymandius]

15. Folks, please remember what happens at this time of year even in the worst of economic climates.

The markets will attempt to stage a Santa Claus rally. If stock valuations remarkably improve then brokers and fund managers will receive their year-end bonuses. It happens every year - with last year being the least successful Santa Claus rally in all the years I've shepherded the SMW.

This rally has struck some as being incredulous since the detailed stats are feeble and market sentiment is based on some financial writers' hyperbole.

[Roland99]

21. Shoulda bought oil stocks a week or so ago. Nearly $10/bbl rise in a week???

[ozymandius]

22. One would still need to rely on selling those stocks to mark a profit.

Stockpiles of oil and gasoline normally go down this year for structural and market conditions. Structurally: refineries shift from automobile fuel production to heating oil production. This causes refineries to drop their productive capacity while modifications are being made to the equipment. There will be a draw on gasoline stocks to the tune of about 8 to 9 million barrels per day here in the U.S. under any circumstances.

I would expect the rally to fizzle when new economic data is released in early to middle January.

[Roland99]

42. Oh, I wouldn't have been holding onto them for very long.

The thought of day trading entered my mind several years ago.

Thankfully, though, it made a quick exit!

[Demeter]

47. 10,500 Looks Like You Got It

[ozymandius]

18. Schumer Says Feinberg Should Recover ‘Outrageous’ AIG Bonuses

Dec. 24 (Bloomberg) -- President Barack Obama’s compensation overseer should be given the power to recover the “outrageous” bonuses of American International Group Inc. executives who failed to return them to the company as promised, Senator Charles Schumer said.

.....
Schumer, a New York Democrat, said he’d like Kenneth Feinberg, Obama’s special master on executive pay, to try to recover the money and he’d give him legislative or regulatory authority if it doesn’t already exist.

.....
AIG, which received a $182.3 billion U.S. government bailout, ignited a backlash after giving about $165 million in March to employees of its AIG Financial Products unit, which has been blamed for pushing the company to the brink of collapse.

In the wake of the bonus revelations, some Senate Democrats proposed imposing a 70 percent tax on all companies getting U.S. bailout money.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aY1fPrx6HAtU&pos=4

---

If there is any decency left in our government - Schumer's words will be put into action post haste.

[Tansy_Gold]

26. I'm not gonna hold my breath.

Are you?

[ozymandius]

27. That would be counterproductive.

Take any news released this week, the slowest bidness week of the year, with a pinch of salt. It is a curiosity for me if this story makes the leap past 12/31/09.

[Tansy_Gold]

28. Actually I take MOST news

with more than a pinch of salt.

Usually there is solid, rational, logical, reality-based analysis right here that makes sense out of the nonsense spewed from officialdom.

Thank the good goddess for SMW!


Happy Holiday, Ozy and crew!



TG

[ozymandius]

32. And to you, Tansy.

I hope your holiday activity provides a respite from the regular assaults to common sense.

As for reality-based analysis: I recall the story about how Nobel Laureate and recently deceased Paul Samuelson came to the field of Economics. He, as an undergraduate at (of all places) the University of Chicago, stumbled into a classroom quite by accident while the lecture was in mid-stream. He stayed long enough to become ensnared in the subject. He enrolled in economics courses and was quite struck, nearly dumbfounded, when the perceptions in the classroom did not reflect what conditions were clearly evident outside the window.

So I concur that the information that is imparted here is of tremendous worth - perhaps even more than dry statistics can relate - to express the human conditions that have created our economic realities. A small conversation with a shop owner, really anyone on the front lines of the economy, can yield tremendous insight.

[ozymandius]

19. Senate Passes Measure to Overhaul Health-Care System (Update2)

The Senate voted 60-39, with all Democrats and two independents backing an $871 billion measure that would extend coverage to tens of millions of uninsured Americans. Republicans opposed the legislation, saying it would raise taxes, widen the federal deficit and hurt private companies such as Hartford, Connecticut-based Aetna Inc.
.....

The Senate and House must now work together on a compromise between their two versions, a process that Democrats want to finish before the president’s State of the Union address in late January or early February. Negotiations will center on the different tax proposals in each measure, provisions on abortion and a new government-run insurance program that’s included in the House bill and not the Senate’s.
.....

Minnetonka, Minnesota-based UnitedHealth Group Inc. and other health insurers would get millions of new customers, also a benefit for companies such as medical-device maker Medtronic Inc. of Minneapolis and drugmaker Pfizer Inc. of New York. At the same time, their industries would face billions of dollars in new fees.

Health-insurer stocks rallied earlier this week after the Senate bill cleared its first procedural hurdle. Changes from an earlier version, including a one-year delay in the planned fees and the lack of a competing new government insurance program, or public option, boosted the shares. The six-member S&P 500 Managed Health Care Index jumped 2.9 percent on Dec. 21.

http://www.bloomberg.com/apps/news?pid=20601087&sid=as9wHSx3akak&pos=8

[ozymandius]

20. Should Investment Firms Bet Against Their Clients? (like Golden Sacks did?)

from The Big Picture

“The simultaneous selling of securities to customers and shorting them because they believed they were going to default is the most cynical use of credit information that I have ever seen. When you buy protection against an event that you have a hand in causing, you are buying fire insurance on someone else’s house and then committing arson.”

-Sylvain R. Raynes, structured finance expert at R & R Consulting

Should investment banks make bets against their own clients? How about when they create new synthetic products, sell that to their clients, and then make bets that their own products will collapse?

Those questions get a once over from Gretchen Morgenson and Louise Story in a long, front page piece in the NYT.

Of course, front and center in this mess is Goldman Sachs. Their PR people must be putting in big overtime hours these days.

Goldman points out that the C.D.O.’s were made to satisfy client demand for such products (at least for those folks who had an optimistic view of the housing market). Further, Goldman says their clients knew they might be taking the other side of bets against the mortgages that underlay the securities. GS’ last defense: Buyers of synthetic mortgage C.D.O.’s were well financed, sophisticated investors.

more at links above including a nice graphical representation at The Big Picture...

[ozymandius]

25. More about this from Naked Capitalism

Goldman, Deutsche, and the Destructive Use of Synthetic CDOs Come Into Focus

....
Zuckermann contends that (John) Paulson went to Wall Street to create synthetic CDOs so Paulson could short subprime. Paulson was open about his intention: he wanted to create the deal (by funding the equity tranche, typically 4-5%) and go short the ENTIRE deal, that is, buy all the CDS used in the synthetic CDO (well probably not all; even subprime CDOs had to have a certain potion be less drecky stuff). This was an out and out plan to toast the party on the other side, particularly since the party funding the equity layer had (at a minimum) veto rights (which in this case could be used to exclude better quality exposures!).

Bear Stearns, ironically, thought the Paulson plan did not pass the smell test, but Deutsche and Goldman were eager. Paulson was responsible for creating $5 billion in synthetic CDOs, but in the end this was not his main mechanism for shorting the subprime.

To the New York Times article. It’s good yet odd. It does signal very clearly the destructive potential of synthetic CDOs. It presents Goldman’s synthetic CDO program as first a way to lay off its exposures, later a way to get short for fun and profit. It has a graphic that shows a sampling of deals. Reading between the lines, it looks as if the authors are on the Goldman-AIG trial, but going where the story and their sources take them, which was into the bigger question of the use of synthetics...

..official investigations are honing in on the key question:

One focus of the inquiry is whether the firms creating the securities purposely helped to select especially risky mortgage-linked assets that would be most likely to crater, setting their clients up to lose billions of dollars if the housing market imploded.

Yves here. Um, exhibit one is the Zuckermann book…I cannot believe Paulson gave out so much ammo to critics, and that no one in the officialdom (yet) seems to have decided to make use of it.

---

Much more detail and lengthy analysis at the link...

[DemReadingDU]

30. Arizona Governor Jan Brewer: "We face a state fiscal crisis of unparalleled dimension"

12/24/09 Arizona Governor Jan Brewer: "We face a state fiscal crisis of unparalleled dimension"

If you did not know Arizona was having immense budget problems, you do now. Here is Arizona Governor Jan Brewer on the Arizona Crisis of "Unparalleled Dimension".
click to read related articles...
http://globaleconomicanalysis.blogspot.com/2009/12/arizona-governor-jan-brewer-we-face.html


12/23/09 Arizona's Coming Government Collapse - from Governor Jan Brewer

Dear Fellow Arizonan,

We face a state fiscal crisis of unparalleled dimension – one that is going to sweep over every single person in this state as well as every business and every family.

That is why I held an emergency cabinet meeting yesterday morning where I outlined for our state’s elected leaders and business leaders the ills our state faces. As I told them yesterday, we ARE faced with some of the worst days in our 97-year history.

We can debate how we got here, but we CANNOT remain paralyzed in our efforts to address the situation. We must set aside partisan politics and face the problem head on.

We must accept that we ARE where we ARE.

So here’s the TRUTH:
· The state has a budget deficit for the current fiscal year of $1.5 billion.
· Next fiscal year, 2011 -- a budget year that begins in just six months -- is even worse. Next year’s budget deficit stands at $3.4 billion. As of today -- right now, that MUST change.

Even though my Administration has already cut $1 Billion in state government spending, we must redouble our efforts to create a leaner, more fiscally responsible Arizona.

I have asked all 90 members in the State Legislature to cooperate by submitting a reasonable plan. On behalf of citizens across our state, I expect them to become active participants in the budget process.

This problem did not happen overnight.
· Five years of spending nearly doubled state government.
· The economic recession has reduced state revenues by almost 40 percent in just 3 years.
· Population growth in school children, university students, health care and welfare populations and inmates in our state prisons has fundamentally ruled out simplistic solutions like rolling the state budget back to levels from five, six, or more years ago.
· Federal and voter mandates prevent us from touching nearly two-thirds of the state budget.
· And procrastination, denial, and lack of will have allowed these problems to fester.

We must solve these problems and we must solve them now.

and more...
http://www.resistnet.com/forum/topics/arizonas-coming-government?xg_source=activity

[ozymandius]

35. Jeebus! That is dire.

As if my voice mattered in Arizona, I would suggest doing what FDR did in 1933: throw anything against the wall and see what sticks. Review who is incarcerated for what. Maybe release non-violent inmates. Step up efforts to create legions of civil service jobs. The money has to come from somewhere. That "somewhere" tends to be the government. And where will the state government get the money since it is constitutionally forbidden to run a deficit? That's the $3 billion question.

[DemReadingDU]

36. It isn't just Arizona...

California, Nevada, Florida, Michigan, Ohio. I've lost track, but it wouldn't surprise me that majority of states (and cities & towns) have money issues than those that don't.

:(

[ozymandius]

39. California has the worst issues. Goobernor Schwarzenegger is scratching his head,

wondering what to do.

Georgia, my home state, has plenty of issues from falling tax revenues too.

But you're right: more states, cities and towns have money problems than those that don't.

[Hugin]

45. I find myself wondering how much of this is due to the States buying wrongly rated Bonds and CDSs.

I would think there is a direct line between those toxic investments and these huge budget shortfalls. $3.4 Billion is a HUGE amount of money... More than I could reasonably expect is spent on State programs in a single year. So, I can only conclude it's being spent elsewhere, like it's being tossed into the Wall Street Black Hole (WSBH) to keep some political butts out of the guillotine clink.

Please, keep in mind, one of the major players in the S&L crisis was none other than McCain (R-AZ).

[Tansy_Gold]

41. What's NOT on the table is taxes

Brewer is a wingnut, and much of the Arizona legislature is composed of wingnuts, the nuttier the better.

This is why I was soooooooo angry when Obama pulled Napolitano out for homeland insecurity: we desperately needed a Dem voice in our state and we had one in Napolitano.

Arizona has prospered over the past half century -- since the arrival of affordable air conditioning -- on developement. Under no circumstances were developers EVER to be taxed any more than absolutely necessary. They weren't expected to fund schools or public facilities in the developments. Etc. Etc. Etc. (Please note that former AZ Dem chair and frequent candidate for high office, Jim Pederson, made his money as a developer.)

The housing boom of 2000-2005 could have brought a lot of money into Arizona's coffers but it didn't. And "property tax relief" is practically the state motto.

Brewer wants to cut services, but it's not part of the puke agenda to consider that cutting services hurts the poor and working classes. THEY DON'T FUCKING CARE.

One of the reasons (there are many) that schools in Arizona suck is because it's one of the most accommodating states for charter schools, where the for-profit corporations that stand behind the non-profit operators suck millions and millions and millions from the public schools -- and spend as little as possible on the actual task of education.

Don't get me wrong -- I love Arizona, but it sure ain't for the political climate.

Brewer is an idiot asswipe in the mold of Linda Gray and Barbara Blewster and some of the other morons who have had a big hand in running this state for the past two decades: Evan Mecham was the norm, not an aberration.


Tansy Gold

[DemReadingDU]

34. Sprott Calls The Fed "A Ponzi Scheme"

12/23/09 Sprott Calls The Fed "A Ponzi Scheme" As Half A Trillion In Treasury Purchasers Are Unaccounted For

"As we have seen so illustriously over the past year, all Ponzi schemes eventually fail under their own weight. The US debt scheme is no different. 2009 has been witness to spectacular government intervention in almost all levels of the economy. This support requires outside capital to facilitate, and relies heavily on the US government’s ability to raise money in the debt market. The fact that the Federal Reserve and US Treasury cannot identify the second largest buyer of treasury securities this year proves that the traditional buyers are not keeping pace with the US government’s deficit spending. It makes us wonder if it’s all just a Ponzi scheme." Eric Sprott

http://www.zerohedge.com/article/sprott-calls-fed-ponzi-scheme-half-trillion-treasury-purchasers-are-unaccounted


PDF link to Sprott's paper

December 2009
Is it all just a Ponzi scheme?
By: Eric Sprott & David Franklin

So to summarize, the majority buyers of Treasury securities in 2009 were:
1. Foreign and International buyers who purchased $697.5 billion.
2. The Federal Reserve who bought $286 billion.

3. The Household Sector who bought $528 billion to Q3 – which puts them on
track purchase $704 billion for fiscal 2009.

Amazingly, we discovered that the Household Sector is actually just a catch-all category.
It represents the buyers left over who can’t be slotted into the other group headings. For
most categories of financial assets and liabilities, the values for the Household Sector are
calculated as residuals. That is, amounts held or owed by the other sectors are subtracted
from known totals, and the remainders are assumed to be the amounts held or owed by
the Household Sector. To quote directly from the Flow of Funds Guide, "For example, the
amounts of Treasury securities held by all other sectors, obtained from asset data
reported by the companies or institutions themselves, are subtracted from total Treasury
securities outstanding, obtained from the Monthly Treasury Statement of Receipts and
Outlays of the United States Government and the balance is assigned to the household
sector." (Emphasis ours)10
So to answer the question - who is the Household Sector?
They are a PHANTOM. They don’t exist. They merely serve to balance the ledger in the
Federal Reserve’s Flow of Funds report.
more...
http://www.zerohedge.com/sites/default/files/Sprott%20December.pdf


added bold, and fixed title

[Festivito]

38. Debt: 12/22/2009 12,095,072,597,209.16 (DOWN 4,170,429,515.40) (Tue)

(Debt seems to jump up then drop slowly maybe up a little and down a little for days--repeat. A good Christmas eve to all.)

= Held by the Public + Intragovernmental(FICA)
= 7,736,047,177,964.39 + 4,359,025,419,244.77
UP 2,618,578,973.78 + DOWN 6,789,008,489.18

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 308-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.73, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain another American, so at the end of the workday of the report, there should be 308,271,198 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $39,235.17.
A family of three owes $117,705.51. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 32 days.
The average for the last 22 reports is 3,841,402,499.72.
The average for the last 30 days would be 2,817,028,499.80.
The average for the last 32 days would be 2,640,964,218.56.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 57 reports in 83 days of FY2010 averaging 3.25B$ per report, 2.23B$/day.
Above line should be okay

PROJECTION:
There are 1,125 days remaining in this Obama 1st term.
By that time the debt could be between 13.6 and 17.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
12/22/2009 12,095,072,597,209.16 BHO (UP 1,468,195,548,296.08 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,185,243,593,697.40 ------------* * * * BHO
Endof10 +0,814,625,442,163.27 ------------* * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/02/2009 -000,337,841,945.81 ---
12/03/2009 +002,787,837,042.67 ------------*********
12/04/2009 +000,210,551,232.36 ------------********
12/07/2009 -000,125,073,651.86 --- Mon
12/08/2009 +000,060,968,077.60 ------------*******
12/09/2009 +000,189,524,372.49 ------------********
12/10/2009 +012,264,233,958.36 ------------**********
12/11/2009 +000,041,027,768.14 ------------*******
12/14/2009 -012,123,818,214.95 - Mon
12/15/2009 +058,799,676,220.27 ------------**********
12/16/2009 +000,348,253,057.33 ------------********
12/17/2009 -036,492,539,788.22 -
12/18/2009 +000,710,260,980.35 ------------********
12/21/2009 -000,155,813,757.66 --- Mon
12/22/2009 +002,618,578,973.78 ------------*********

28,795,824,324.85 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

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

(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=4196196&mesg_id=4196223

[Festivito]

54. Debt: 12/23/2009 12,102,603,428,507.74 (UP 7,530,831,298.58) (Wed)

(Debt seems to jump up then drop slowly maybe up a little and down a little for days--repeat. Good Christmas day and all days to all.)

= Held by the Public + Intragovernmental(FICA)
= 7,736,506,773,971.40 + 4,366,096,654,536.34
UP 459,596,007.01 + UP 7,071,235,291.57

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 308-Million person America.
If every American, man, woman and child puts in $3.24 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.73, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain another American, so at the end of the workday of the report, there should be 308,279,838 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $39,258.5.
A family of three owes $117,775.49. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 4,125,661,229.28.
The average for the last 30 days would be 3,025,484,901.47.

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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 58 reports in 84 days of FY2010 averaging 3.32B$ per report, 2.29B$/day.
Above line should be okay

PROJECTION:
There are 1,124 days remaining in this Obama 1st term.
By that time the debt could be between 13.6 and 17.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
12/23/2009 12,102,603,428,507.74 BHO (UP 1,475,726,379,594.66 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,192,774,424,996.00 ------------* * * * BHO
Endof10 +0,837,650,775,280.24 ------------* * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/03/2009 +002,787,837,042.67 ------------*********
12/04/2009 +000,210,551,232.36 ------------********
12/07/2009 -000,125,073,651.86 --- Mon
12/08/2009 +000,060,968,077.60 ------------*******
12/09/2009 +000,189,524,372.49 ------------********
12/10/2009 +012,264,233,958.36 ------------**********
12/11/2009 +000,041,027,768.14 ------------*******
12/14/2009 -012,123,818,214.95 - Mon
12/15/2009 +058,799,676,220.27 ------------**********
12/16/2009 +000,348,253,057.33 ------------********
12/17/2009 -036,492,539,788.22 -
12/18/2009 +000,710,260,980.35 ------------********
12/21/2009 -000,155,813,757.66 --- Mon
12/22/2009 +002,618,578,973.78 ------------*********
12/23/2009 +000,459,596,007.01 ------------********

29,593,262,277.67 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

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

(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=4197406&mesg_id=4197510

[ozymandius]

40. Markets are open for bidness.

9:45
Dow 10,488.36 21.92 (0.21%)
Nasdaq 2,278.09 8.45 (0.37%)
S&P 500 1,123.73 3.14 (0.28%)
10-Yr Bond 3.764% 0.016
NYSE Volume 201,254,265.625
Nasdaq Volume 71,332,109.375

09:40 am : Stocks open slightly higher, as futures indicated. All ten sectors are posting a gain, though none are veering much from the unchanged mark -- the largest gainer is financials, up 0.6%.DJ30 +22.69 NASDAQ +5.71 SP500 +3.18

[Roland99]

44. Merry Christmas, SMW denizens!

I'm off to the airport in a few to celebrate a Merry Christmas, myself!

:hi:

[ozymandius]

49. I hope you enjoy your holiday, Roland.

Safe trip too. See you on the return.

:hi:

[Dr.Phool]

46. Ho Ho Ho......

Film at 11:00.

[ozymandius]

50. Wha...?

[UpInArms]

52. Merry Christmas anyway, Ozy! (and all the other SMWers!)

[ozymandius]

48. at the close

Dow 10,520.10 53.66 (0.51%)
Nasdaq 2,285.69 16.05 (0.71%)
S&P 500 1,126.48 5.89 (0.53%)
10-Yr Bond 3.807% 0.059
NYSE Volume 1,424,009,375
Nasdaq Volume 631,723,437.5

1:00 pm : The major indices posted modest gains to close at fresh 52-week highs following a holiday-shortened session in extremely light volume.

Thursday marked an extremely slow session, as expected, as many market participants were off their desks as they took an extended weekend ahead of Christmas. A total of 287 mln shares exchanged hands on the NYSE, well below the one year average of 1.4 bln. Buying interest was broad-based, with nine of the 10 sectors posting a gain. Tech outperformed with a gain of 1.0%, while healthcare underperformed, closing near the unchanged mark.

There was a dearth of corporate items, but there were two key economic releases.

On a positive note, weekly initial jobless claims dropped by a larger-than-expected amount to 450,000 from 480,000 in the prior week. This beat the consensus estimate of 470,000 and was the lowest level since fall 2008. While the labor market remains weak, the trend in jobless claims has been heading in the right direction.

Separately, November durable goods orders rose 0.2% month-over-month, which was worse than the economist consensus of 0.5%. But durable goods orders excluding aircraft rose 2.0% month-over-month, which was better than consensus of 1.1%. The latter data point also saw a positive revision to a decrease of 0.7% compared to the original reading that showed a decline of 1.3%.

As a reminder, the market is closed Friday for Christmas.DJ30 +54.03 NASDAQ +16.05 SP500 +5.86 NASDAQ Adv/Vol/Dec 1645/597 mln/932 NYSE Adv/Vol/Dec 2141/287 mln/781

[mullard12ax7]

51. Merry Xmas to Fannie and Freddie execs getting 4-6 million dollar bonuses

Meanwhile, people are abandoning their homes with no hope of ever getting out of debt. It was so nice of the Obama admin to also give corrupt banks 80% of what houses used to be worth in a criminally inflated market so the banks now have no reason whatsoever to refi anyone.

Oh, and congrats to every health insurance company that can continue to steal money from everyone every month, now with a government seal of approval. Also, congrats to the 40,000 more cannon fodder troops being sent to kill civilians and sheep herders, hopefully not having to torture anyone as that's just so unseemly.

Most of all I'd like to wish a merry Xmas to Tim Wood, a greedy fat ass liar who called me and 1000s of others "conspiracy theory loons" and got paid to do it. He's iconic of our entire country now, a dumb shit who recites stereotypes as he's incapable of thinking for himself, much less thinking of the greater good or society as a whole.

[hamerfan]

53. Merry Christmas, everyone!

Enjoy the day and thanks very much for all your hard work and insight on this board. It's truly appreciated.
hamerfan
PS... mullard12ax7, I really like your screen name! (or should I call you ECC83)?
:D