STOCK MARKET WATCH, Wednesday March 10

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday March 10, 2010

Bush Administration Officials Convicted = 2
Name(s): David Safavian, James Fondren

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

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

AT THE CLOSING BELL ON March 9, 2010

Dow... 10,564.38 +11.86 (+0.11%)
Nasdaq... 2,340.68 +8.47 (+0.36%)
S&P 500... 1,140.44 +1.94 (+0.17%)
Gold future... 1,122 -2.20 (-0.20%)
10-Yr Bond... 3.70 -0.02 (-0.46%)
30-Year Bond 4.68 -0.01 (-0.19%)

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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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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. Today's Reports

10:00 Wholesale Inventories Jan
Briefing.com -0.1%
Consensus 0.2%
Prior -0.8%

10:30 Crude Inventories 03/06
Briefing.com NA
Consensus NA
Prior 4.03M

14:00 Treasury Budget Feb
Briefing.com -$223.0B
Consensus -$221.0B
Prior -$42.6B

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

[ozymandius]

2. Oil drifts near $81 amid mixed US inventory data

SINGAPORE – Oil prices drifted down to near $81 a barrel Wednesday in Asia after a report showed mixed evidence about U.S. crude demand. ...

Oil has jumped about 17 percent since early last month on increased investor confidence in this year's global economic growth. But crude demand from the U.S., the world's largest consumer of oil, has remained sluggish.

Crude inventories jumped last week by 6.5 million barrels, the American Petroleum Institute said late Wednesday. Analysts, eyeing a cold weather spell in much of the U.S. this month, had expected a drop of 1.6 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

However, inventories of gasoline and distillates fell more than analysts expected, the API said.

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

[ozymandius]

3. World stocks little changed as China exports surge

HONG KONG – World stock markets were little changed Wednesday even as surging Chinese exports pointed to a pickup in global trade.

Asia's major indexes were mixed as many markets fluctuated for the second day in a row and European stocks opened without conviction in either direction. Oil prices hovered near $81 a barrel, while the dollar logged small gains versus the yen and the euro.

News that Chinese exports soared nearly 46 percent in February from a year earlier highlighted recovering demand as the world economy shakes off last year's recession. ...

As trading got underway in Europe, Britain's FTSE 100 was off 0.2 percent, while Germany's DAX and France's CAC-40 both added 0.1 percent. Wall Street futures suggested a flat open in the U.S. Wednesday.

In Japan, the Nikkei 225 stock average shed 3.73 points to 10,563.92.

Hong Kong's Hang Seng traded sideways, gaining 0.74 point to 21,208.29 while Shanghai's market lost 0.7 percent at 3,048.93.

http://news.yahoo.com/s/ap/20100310/ap_on_bi_ge/world_markets

[ozymandius]

4. Strong China trade data point to rise in yuan

BEIJING (Reuters) – Chinese exports and imports grew faster than expected in February, underlining the momentum behind the world's third-largest economy and reinforcing the case for a rise in the yuan.

Economists cautioned against over-interpreting the figures, which were skewed by the timing of the long Lunar New Year holiday, but said the basic message was one of gathering strength that would justify a firmer exchange rate and further policy tightening measures to nip inflation in the bud.

Exports jumped 45.7 percent in February from a year earlier, following a 21.0 percent rise in January, while imports surged 44.7 percent after record growth of 85.5 percent in January, the General Administration of Customs said on Wednesday. ...

China reported a trade surplus for February of $7.6 billion, compared with $14.2 billion in January.

Economists had expected an $8.0 billion surplus based on a 38.7 percent rise in exports and a 39.7 percent rise in imports from year-earlier levels.

http://news.yahoo.com/s/nm/20100310/bs_nm/us_china_economy

[ozymandius]

5. Bank of America to End Overdraft Fees on Debit Purchases

In a move that could bring an end to the $40 cup of coffee, Bank of America said on Tuesday that it was doing away with overdraft fees on purchases made with debit cards, a decision that could cost the bank tens of millions a year in revenue and put pressure on other banks to do the same.

Bank officials said that effective this summer, customers who try to make purchases with their debit cards without enough money in their checking accounts will simply be declined. Debit purchases account for roughly 60 percent of overdrafts at Bank of America, the nation’s largest issuer of debit cards.

Banks are bracing for a new federal rule that will require them to get permission from account holders before providing overdraft services for debit purchases and A.T.M. withdrawals. That change was already expected to wipe out billions of dollars in overdraft revenue for the banks. ...

The bank will continue to provide overdraft protection, for a fee, for checks and automatic payments, say to a biller that debits money from an account each month. Consumers who try to exceed their balance when making an A.T.M. withdrawal are already being notified that they will be charged a $35 overdraft fee if they choose to proceed. ...

But as reports surfaced of customers incurring hundreds, even thousands, in overdraft fees, often for purchases of just a few dollars like a cup of coffee, regulators and lawmakers stepped in. As of July 1, the Federal Reserve will require that banks obtain a customer’s consent before they can charge them overdraft fees for A.T.M. transactions and debit purchases; many banks now automatically enroll customers.

http://www.nytimes.com/2010/03/10/your-money/credit-and-debit-cards/10overdraft.html

[Hutchewon]

6. Thanks for expending the time and effort doing this every morning

Ozzy-

I just wanted to say thank you for doing this every business day. I know it is no small feat to do this so steadfastly.

I have been reading this thread everyday for at least a year if not longer. For me, you are performing a great service. I have learned my from reading this every day. Some of the knowledge I have gained I am currently using to fight some of the vampire capitalism occurring in my City.

I am an early riser, I get up at 5am EST. Consequently, I am often one of the first recommenders of the thread.

Thanks,

Hutchewon - The Phantom recommender

[ozymandius]

7. Thank you very much.

I really appreciate you saying so, Hutchewon. Honestly - I have often wondered who is waiting for me to open the doors so early in the morning. There have been several things going at once lately. So my posts have not been as numerous and not accompanied with as much commentary. Nonetheless I hope the choices made as to which stories to post have offered you some sense of the gestalt of our economic environment.

:hi:

[DemReadingDU]

20. Ozy, you do a great job, Thanks!

While I also get up early, 5am, that is the time I do my P90X exercise routines. Some things just have to take precedence, or they wouldn't get done.
:P

[ozymandius]

8. Budget squeeze sours jobs picture

State and local governments are collectively the nation's biggest source of jobs, together employing almost 15 times as many Americans as Wal-Mart. ...

But another ugly state budget season is coming up, which will mean more belt-tightening for local governments -- and another source of pressure for an already anemic jobs market recovery.

State tax revenue dropped a record 11% in the year ended in September, the Center for Budget and Policy Priorities estimated this week. New taxes and fees will raise less than half that amount. ...

Layoffs aren't the first choice of governments seeking to balance their budgets. A survey conducted late last year by the Center for State and Local Government Excellence found two-thirds of respondents had stopped hiring and almost as many had put a freeze on raises. Less than half had resorted to job cuts, however.

But the size of budget shortfalls is making cuts inevitable. A thousand state workers in South Carolina could lose their jobs if the legislature enacts a pending budget proposal, the Columbia State reported. Cutbacks are pending in Virginia, Georgia and many other states.

http://money.cnn.com/2010/03/09/news/economy/states.cutbacks.fortune/index.htm

---

My school district is looking at the possibility of cutting the school calendar by ten days and furloughing teachers. Georgia, on the whole, faces a $1 billion+ budget deficit (that must be closed) for the next fiscal year. Georgia has a grossly regressive income tax (only the first $7001 of income is subject to taxation) and that the corporate tax rate is capped at 4.9%. Action on the fore-mentioned items will need to be taken to keep from eating our economic seed corn through massive layoffs and cutbacks. I suspect other states other than California face the same dilemma.

[Zynx]

10. Georgia taxes all income.

http://swz.salary.com/salarywizard/layouthtmls/swzl_statetaxrate_ga.html

It's just that the top rate kicks in very very low (at the $7,001 you said).

Also, state corporate rates are almost always flat rates.

[ozymandius]

11. Thanks for the correction/clarification.

Duty calls elsewhere. Have a nice day.

:hi:

[AnneD]

14. Morning Marketeers...

:donut: and phantom lurkers;) well Ozy, It's offical. Bad teachers (and the unions that represent them) have replaced Al quida as the most dangerous threat to the US.

www.newsweek.com/id/234590

I have seen only a few more concentrated efforts (the run up to the Iraq war). This is nothing more than TBTB on both parties to union bust one of the last strongholds and inject the business model into education. And if you want to take the heart out of someone-take an honest person with a caring soul and then accuse them of being incompetent greedy money grubbing selfish thugs (gee, that fits some admin types I know). And the public is buying into this horse shit!!!!! It kicks the wind right out of teachers. THAT, is what is happening with education today. The thing that they don't say is that education levels were much better BEFORE they started improving it. Folks support your belegured teachers. This is all just one big push to break teachers-I have never seen so many folks take it so hard as this.

Happy hunting and watch out for the bears.

[Tansy_Gold]

17. G'morning Anne, Ozy, Demeter, tc, Doc, et alia

after a long rain-soaked week-end, I have most of my life back. I took Mother to the airport yesterday and she called about 7:00 p.m. to say she was home. Whew!

there may be additional political news in the family as my son-in-law contemplates a run for congress.

i'll be spending the last few days of my "vacation" finishing a variety of projects around the house so I should have time to check in on SMW now and then. I've fallen behind on following the news, so bear with me while I cztch up.



Tansy Gold, overrun with weeds (not THAT kind!) after a very rainy Arizona spring

[Demeter]

31. Welcome Back, Tansy

We were supposed to get rained on, but it looks like the jet stream blew it all away. Still, it's been in the 50's...

[CatholicEdHead]

21. Yes it is AnneD

Even up here the state GOP is just going after the state teacher's union left and right. The feeling is there should be no union and wages should be $7-8/hr, their very hard work is not taken into account by the GOP faithful.

[TalkingDog]

29. Scabs and adjuncts

I grew up in the South where Union is a dirty word. I never bought into the propaganda. But I also realized that sometimes an organization (of any type) will become so invested in it's own continuance that it loses the initial impetus to work only for the members.

The Spousal Unit grew up in Pittsburgh. His maternal family was full of Union folk and his paternal family full of middle management and the assorted clergy. he falls to the Union side of things.

We have both taught at University and when we moved back to the South, I took on adjunct work at a local college while applying for more permanent positions. Adjunct work is half the pay and literally twice the classes with no bennies, and that's if you are lucky. The "unlucky" get one class a semester. With a semester to semester contract for all adjunct.

After I'd done this for a year or so, we began discussing how the college was making out by hiring professionals like me for a song. The Spousal Unit offhandedly said: Yeah, adjunct work is basically SCAB labor.

I've never taken another adjunct position, because 1) I agree with him. 2) By continuing I'm basically condoning what they do. (and I don't)

[Dr.Phool]

35. A scab is the lowest life form on earth.

My father was a case study in contradictions. He was born in the West Virginia coal country. He had a strong union ethic, and background. If you've seen the movie "Matewan", he said that his father kicked the living shit out of the character in the movie, who was the company spy, on the front steps of the Logan County courthouse.

He moved to Cleveland for work, and eventually became the Chairman of the Brotherhood of Locomotive Engineers local. He was, and still is a strong union supporter. But, he's also a fundie and a Republican.

After that he retired, and moved to South Carolina. Him and my mom were driving up north for a visit, and they stopped in a Hardee's in North Carolina for a bite to eat. The textile unions had a strong organizing drive going in a mill there. At the Hardee's, the plants management had gathered all the preachers from the surrounding areas for free food, and instructions on how to keep their flocks from voting for the union.

You would have thought that the cognitive dissonance would have set in by then. But, it didn't. Now at 81, he's finally starting to catch on.

[Joe Chi Minh]

42. "I grew up in the South where Union is a dirty word." I begin to understand a bit better

why a young Russian poster to Club Orlov can have concluded that the further South he went the more mad he found the people to be. The thing is though that he loves the US and its people.

[DemReadingDU]

23. Breaking the teacher unions , then it will be

next, breaking the unions for police and firemen. The goal is to get rid of all unions.

[Demeter]

30. My grandmother Taught Grade School in Detroit

She retired in the 60's. She inspired me not to go into teaching--although I did a short stint as a gypsy at colleges in NH and MA. Didn't matter--still an undervalued job.

[mbperrin]

36. I hate the teacher-bashing! I teach, but before that, I worked in banks

for a decade, the oilfield in a management position for a decade, then owned a small construction company for another ten years. My spouse, a consulting psychologist, suggested teaching to me.

I was a National Merit Scholar who attended Texas A&M on a full ride scholarship. My GPA for my MAEd is 3.96. I have former students who are at the London School, Stanford, and elsewhere. I also have two who were killed in the useless war in Iraq, as well as several in prison.

I teach in one of the poorest areas of Texas, with a punitive school board and a horrible atmosphere. Their recent decision to raise the cost of prescriptions to employees will mean that we will pay $5,000 more this year for medications than last year; our $500 step raise is a bit low to cover that, as well as discontinuing a program where each teacher had $250 to spend for supplies for the year.

None of those other jobs were anywhere nearly as challenging, nor as satisfying, as teaching. It's the hardest work I've done, and I never will understand why TPTB think money doesn't matter. It matters in everything else: want a bigger, better vehicle? Spend more money. Want a bigger better house? Spend more money? Want to go on a bigger better longer vacation to exotic places? Spend more money. Want to go a fancier restaurant for a better meal? Spend more money.

Yet somehow, any problems with education are caused by spending TOO MUCH money! To get more education, they recommend spending less money. Wow.

[wordpix]

38. agree - AND I challenge any teacher-basher to teach in the public schools

Get up early enough to make it to work by 7:30 or 8 am. Teach all day with up to 30 students in a class, maybe 140-150 students/day. Plan lessons and teach those who are several grade levels behind, along with quick studies consistently ready to zoom ahead. Come home to grading papers, lesson planning (again, for students with wide discrepancies in skills and knowledge), writing comments, emails and phone calls to parents and colleagues. Keep all those grades and averages straight. Be called on the carpet by parents for "losing" their child's homework assignments when the kids insist they did every scrap of homework every day and it's the teacher's fault they got no credit for work not turned in.

Yes, teacher-bashers need to do the job to really learn what they're bashing about.

[AnneD]

40. My daughter is in college....

but she got a great education in public school (except Science-too soft). But if push came to shove-I would home school my child before I would send her to schools TPTB are planning. I at least taught her to think for herself. Hell, I taught her to read before she got to kindergarten. I remember my mother being My first teacher too. We played school every day and she taught me my colours, numbers, simple sums, and letters. She has a phenomenal mind and learned to read at 4 but was unable to teach me how to read. But later, she diagnosed my mild dyslexia (before they even had a name for it)and helped me over come it.

I had an old fashioned 1st grade teacher that taught phonics, this despite the fact that the school district had thrown out phonics for some cockamamie site word memorization method of learning to read. Thank God this teacher had seniority and a principal that respected her. She gave me the missing clue to my learning to read. The principal told my Mom that her kids may have come out of the first grade reading a bit below the site word kids but that when the kids hit 3rd grade (and really began to read unknown words) their grades really soared. It was so important that I remembered and was able to teach my daughter how to read. Once you have reading down pat, the whole world is open to you.

Not everyone has the patience or skill to do it, but I feel that I could (and did). The bottom line, if you want a better school, be a better parent. Be involved and start seeing your teacher for what she really is, your partner and team mate (the more time she has taught, the more she might know).

[tclambert]

12. States and cities pay for teachers, police, firefighters, prison guards, and road workers

Here in Michigan, we have annual budget fights that go something like this: 1) The democratic governor suggests painful cuts and tax increases to balance the budget. 2) The Republicans in the State Senate scream about the taxes and claim all we have to do is eliminate government waste, but don't say where that supposed waste is to be found. 3) The two sides waste months arguing pointlessly. 4) A week or two before a budget must be passed, the Republicans finally suggest where to cut state spending, always falling short of balancing the budget by a significant amount, and always, always including massive cuts in education, police, firefighting, prisons, and road maintenance. Turns out in their eyes essential services look like wasteful spending.

The last step 5) is come election time, the Republicans will run on platforms of improving education, reducing crime, and fixing the roads, while cutting taxes. And no one ever questions their obvious error in arithmetic.

[ozymandius]

9. Grayson Offers Medicare Buy-In Bill, Makes Impassioned Speech

When Rep. Alan Grayson (D-Fla.) first became a father, his health insurance company refused to pay for the birth of the child, and Grayson had to pay $10,000.

Grayson told the House that story Tuesday during an impassioned and personal speech urging fellow lawmakers to support legislation that would allow Americans to buy into Medicare. Grayson introduced a four-page bill Tuesday that would make that a possibility. He asked would-be opponents to grant Americans the option to buy into the same health care plan that the federal government already offers.

Grayson: Isn't it time that we finally did something good for America? Isn't it time that we gave all Americans the right to buy into a public plan like this? Isn't it in fact past time that we did something like that and what's the harm? I say to those people on the other side of the aisle, if you don't want to buy into the public option, that's fine. But don't prevent me and my family and the ones who I love from doing the same. Let us have our alternative. And remember, remember what you said so many times before. You say the government can't do anything right. Well let's see. Let's see right now. Let's let people buy into the public option, this bill.

http://www.huffingtonpost.com/2010/03/10/grayson-offers-medicare-b_n_492831.html

video of Grayson's speech on the House floor follows...

[tclambert]

13. I like this guy Grayson.

Compared to him the other Democrats look like scared little mice. If the Democrats had a propaganda operation like Fox News, he'd be a big star.

[Demeter]

15. They Aren't Mice; They Are "Honest Politicians"

An honest politician is one who, when he is bought, will stay bought.

Simon Cameron
US financier & politician (1799 - 1889)

Interesting guy, Lincoln's War Secretary--that's when the Corporations made their first moves on the government...Appointed secretary of war in 1861, he was soon dismissed for showing favouritism in awarding army contracts.

http://bioguide.congress.gov/scripts/biodisplay.pl?index=c000068

http://www.answers.com/topic/simon-cameron

http://maley.net/transcription/sketches/cameron_simon.htm

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

http://www.mrlincolnswhitehouse.org/inside.asp?ID=85&subjectID=2.

http://www.famousamericans.net/simoncameron/

http://millercenter.org/academic/americanpresident/lincoln/essays/cabinet/286

This guy belonged to every party in existence during his lifetime. "Cameron eventually left the Democratic Party over the issue of slavery, joined the Republicans, and headed back to the Senate" where he was behind that Missouri Compromise. "He had a reputation of abandoning and manipulating the Democratic party for his own interests. In 1857, Thad Stevens decided to help return Cameron to the Senate as a Republican where he was serving when he sought the Republican presidential nomination in 1860."

He finally found his home in the GOP, for which he was eminently suited! Example: Consider this other famous quote of his:

"I am tired of all this sort of thing called science here... We have spent millions in that sort of thing for the last few years, and it is time it should be stopped." (on the Smithsonian Institution, 1861)

[Roland99]

19. I'm almost tempted to move a bit to be in his district!

:)

[Warpy]

39. I donated the second he showed up on my radar

quite a number of months ago. I did have ties to Florida so I don't feel like a complete carpetbagger.

I don't have deep pockets, but I am putting my money where it has a chance of doing some good.

I'm pleased to say both my Senators signed on to the public option through reconciliation effort. I sent one of them a nasty email and got a very nice email in return, not at all like a form letter, that addressed some of the concerns I had, a day after he signed on. I'm impressed. Finally.

[Roland99]

43. He'll be getting a donation from me in the VERY near future.

[UpInArms]

16. dollar watch

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

Last trade 80.621 Change +0.029 (+0.04%)

Oil, Gold May Decline as Monthly US Deficit Hits Record

http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/commodities/2010-03-10-0939-Oil__Gold_May_Decline_as.html

Oil and gold prices may decline amid expectations for a sharp increase in borrowing costs as the US Treasury’s monthly budget statement shows the largest monthly shortfall since records began nearly 33 years ago.

Commodities - Energy

Oil May Break Support as Monthly US Deficit Hits Record

Crude Oil (WTI)       $81.25       -$0.24      -0.29%

Prices have pulled back from resistance at $82.23 to find support at a rising trend line established from the bottom in early February, with a break lower exposing $77.53. The percent-change correlation between the WTI contract and the MSCI World Stock Index has strengthened to 0.78, reflecting the increasing influence of risk trends. European shares and US index futures are going nowhere fast, leaving crude without a clear catalyst heading into the Wall St open. The US Treasury’s monthly budget statement may prove to be the most significant item on the calendar, with expectations calling for a monthly shortfall of -$222 billion in February – the largest since records began nearly 33 years ago. This send crude lower as investors bet that the unprecedented borrowing that will be required to finance the US’ public deficit will send borrowing costs sharply higher, snuffing crude demand along with overall economic growth. The US Department of Energy’s Weekly crude inventory and MBA Mortgage Applications figures are also on the docket.



Commodities - Metals

Gold, Silver to See Sellers Return on US Debt Outcome

Gold       $1122.73       +$0.88       +0.08% 

Gold prices found support at a rising trend line established from February’s swing low and rebounded to re-test support-turned-resistance at $1125.13. As with oil, the US monthly budget figures may weigh heavily on prices if they prove to fuel expectations of a sharp increase in borrowing costs that bears down on inflation. A break below the trend line will initially target the $1100 figure.

Silver       $17.31       +$0.06       +0.32% 

The outlook for silver is largely in line with its more expensive counterpart, with traders’ eyes trained on the US monthly budget statement. Prices have rebounded from support just below the $17.00 to re-test resistance near the previous swing high at $17.51, with a turn lower form here initially looking to challenge $16.86.



...more...

Daily Sound Bites 03.10

http://www.dailyfx.com/forex/fundamental/article/daily_sound_bites/2010-03-10-1223-Daily_Sound_Bites_03_10.html



...more...

[Demeter]

32. SOME People Can Borrow $$$ for Nothing

and buy oil and gold. And they are. You know who they are, too...the Corporate Fraudsters, the Bailout Babies.

[Festivito]

18. Debt: 03/08/2010 12,546,372,001,879.73 (UP 1,668,072,527.18) (Mon)

(Up a littly tiny bit. Up a lot lately. Debt seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. Good day all.)

= Held by the Public + Intragovernmental(FICA)
= 8,061,258,419,021.54 + 4,485,113,582,858.19
UP 260,238,586.47 + UP 1,407,833,940.71

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 309-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: $9.71, ABOUT TEN BUCKS for a 1B$ 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 308,927,838 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 $40,612.63.
A family of three owes $121,837.89. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 28 days.
The average for the last 20 reports is 9,923,452,367.40.
The average for the last 30 days would be 6,615,634,911.60.
The average for the last 28 days would be 7,088,180,262.43.
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$/day.
There were 107 reports in 159 days of FY2010 averaging 5.95B$ per report, 4.00B$/day.
Above line should be okay

PROJECTION:
There are 1,049 days remaining in this Obama 1st term.
By that time the debt could be between 14.0 and 20.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/08/2010 12,546,372,001,879.73 BHO (UP 1,919,494,952,966.65 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 +0,636,542,998,368.00 ------------* * * * * * * * * * * * * * * BHO
Endof10 +1,461,246,505,687.55 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/16/2010 +030,097,605,306.92 ------------********** Tue
02/17/2010 +000,408,694,886.67 ------------********
02/18/2010 +015,224,901,067.79 ------------**********
02/19/2010 +000,114,262,910.59 ------------********
02/22/2010 -000,206,249,204.22 --- Mon
02/23/2010 +000,404,218,476.39 ------------********
02/24/2010 -000,081,552,792.52 ----
02/25/2010 +034,823,775,896.06 ------------**********
02/26/2010 +007,974,774,874.74 ------------*********
03/01/2010 +088,256,071,194.67 ------------********** Mon
03/02/2010 +000,051,419,206.42 ------------*******
03/03/2010 +001,678,102,940.09 ------------*********
03/04/2010 +034,416,128,156.63 ------------**********
03/05/2010 -000,074,542,156.87 ----
03/08/2010 +000,260,238,586.47 ------------******** Mon

213,347,849,349.83 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/
DUer primer on National debt

(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=4299321&mesg_id=4299329

[Festivito]

41. Debt: 03/09/2010 12,552,703,515,296.83 (UP 6,331,513,417.10) (Tue)

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

= Held by the Public + Intragovernmental(FICA)
= 8,061,801,246,857.28 + 4,490,902,268,439.55
UP 542,827,835.74 + UP 5,788,685,581.36

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 309-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: $9.71, ABOUT TEN BUCKS for a 1B$ 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 308,936,478 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 $40,631.99.
A family of three owes $121,895.97. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 28 days.
The average for the last 20 reports is 10,161,819,127.92.
The average for the last 30 days would be 6,774,546,085.28.
The average for the last 28 days would be 7,258,442,234.23.
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$/day.
There were 108 reports in 160 days of FY2010 averaging 5.95B$ per report, 4.02B$/day.
Above line should be okay

PROJECTION:
There are 1,048 days remaining in this Obama 1st term.
By that time the debt could be between 14.0 and 20.2T$.
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)
03/09/2010 12,552,703,515,296.83 BHO (UP 1,925,826,466,383.75 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 +0,642,874,511,785.10 ------------* * * * * * * * * * * * * * * * BHO
Endof10 +1,466,557,480,009.76 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/17/2010 +000,408,694,886.67 ------------********
02/18/2010 +015,224,901,067.79 ------------**********
02/19/2010 +000,114,262,910.59 ------------********
02/22/2010 -000,206,249,204.22 --- Mon
02/23/2010 +000,404,218,476.39 ------------********
02/24/2010 -000,081,552,792.52 ----
02/25/2010 +034,823,775,896.06 ------------**********
02/26/2010 +007,974,774,874.74 ------------*********
03/01/2010 +088,256,071,194.67 ------------********** Mon
03/02/2010 +000,051,419,206.42 ------------*******
03/03/2010 +001,678,102,940.09 ------------*********
03/04/2010 +034,416,128,156.63 ------------**********
03/05/2010 -000,074,542,156.87 ----
03/08/2010 +000,260,238,586.47 ------------******** Mon
03/09/2010 +000,542,827,835.74 ------------********

183,793,071,878.65 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/
DUer primer on National debt

(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=4300693&mesg_id=4300902

[Demeter]

22. 6 Theories On Why the Stock Market Has Rallied Posted by Washington

http://www.nakedcapitalism.com/2010/03/guest-post-6-theories-on-why-the-stock-market-has-rallied.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


There are at least 6 theories about why the stock market has rallied some 70% off its lows a year ago, even though nothing has been done to actually reverse the financial crisis.

What The Dumb Money Believes

The dumb money believes what CNBC and their trusty stock churner … er, broker … says: that the government has fixed the economy but it just has to “kick in” (and that unemployment is just a lagging indicator, nothing important. See this, this, this and this).

Therefore, these folks believe that stocks are hugely undervalued, and that if they buy while most people are still afraid, they’ll make a killing when the market goes to the moon.

(Note: Obviously, I believe this is a bear market rally which will eventually fizzle out. If the bulls are instead right, then that will make me the dumb money. But I think it much more likely that the rally will change direction in the not-too-distant future.)

Temporary Juice

Others believe that it is the quantitative easing, low rates, bank bailouts, stimulus spending, and other portions of the “wall of money” which the feds have thrown at the economy are creating a temporary pump to the stock market.

But they think that – when the spigot is turned off – the market will tank.

The Situation is Inflation

Others believe that – regardless of continued loose monetary and fiscal policy or real stock valuations, we’re in for some serious inflation.

Stocks tend to perform well during inflationary periods.

For more on inflation versus deflation, see this.

Machines Run Amok

Tyler Durden explains that all of the stock market gains have occurred after hours when mystery buyers purchase stock futures in low volume environments (and see this).

Vincent Deluard – a strategist for TrimTabs Investment Research (25% of the top 50 hedge funds in the world use TrimTabs’ research for market timing) – said last month:

We’ve never seen this before – such a huge rally, and the little guy is out.

Some argue that it is high-frequency trading or momentum-chasing trading algorithms doing the buying, and that the market will tank when they change their game.

Fed Futures

Others argue that the government is itself buying stock futures.

Some believe that the Feds aren’t buying, but that they have intentionally showered the big banks with money, and encouraged the banks to buy. In other words, they argue that the Feds are indirectly promoting a stock market rally.

Fraud Central

Karl Denninger believes that the market has rallied due to the systemic, fraudulent overvaluation of assets.

As Denninger wrote yesterday:

A reader wrote the FDIC to ask about allegations of fraudulent valuations. This was their response:

That’s the value the bank had them on their books on their year-end financials, but the true value is much less. It is similar to someone in Las Vegas saying that their house is worth $300,000 because that’s what they paid for it three years ago, but the reality is, if they had to sell it in today’s market, they’d only get $250,000 for it. The FDIC has to sell assets in today’s market…

Or tomorrow’s market.

The simple fact of the matter is that there it is, right in front of you.

A raw admission that the banks are carrying these loans at dramatically above their actual value.

Yes, this means that essentially all balance sheets must now be considered fraudulent, and thus the valuations assigned by the market to them are also fraudulent.

Extending this to the stock market as a whole you now have a market that is intentionally overvalued as a direct and proximate consequence of fraud, permitted and endorsed by the government, of somewhere between 25-40%.

Now you know why the market rallied off the SPX 666 lows to where it is now. 1139 (where we are now) * .60 (a 40% haircut) = 683.40, or awfully close to that 666 bottom.

Of course this “valuation” expressed in the market can only be maintained for as long as the fraud is. If the ability to maintain that fraud is lost for any reason then values will instantly collapse back to reflect reality.

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

SEE THE LINK TO GET THE REFERRED ARTICLES, AND Leave a comment about why you think the stock market has rallied, and how long you think the rally will continue.

PS: I'D GUESS ALL OF THE ABOVE

[DemReadingDU]

25. All of the above!

and when TPTB think they have suckered in the masses, they will pull out the rug, leaving the suckers holding empty bags.

[TalkingDog]

24. D1 vs D2 (updated) With more scary charts than you can shake a stick at.

(in the words of a young friend of the family who did not grow up in the South: But why would you want to shake a stick at them?)

http://voxeu.org/index.php?q=node/3421

An updated version of last years update on the original and ongoing discussion

[DemReadingDU]

27. Thanks! I remember them from last year

I can't imagine this rally we are in, will continue for another year. So already looking forward to next years analysis.

[UpInArms]

37. what's the deal with Sweden?

[Demeter]

44. They Lost Their Shirts in Central Europe

[Demeter]

26. The fake stress tests by Edward Harrison

http://www.nakedcapitalism.com/2010/03/the-fake-stress-tests.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

About a month ago I wrote a post called “The coming wave of second mortgage writedowns” the gist of which was that the big four banks (Citi, JP, BofA, and Wells) had a shed load of exposure to now worthless second mortgages. With many first mortgages now hopelessly underwater, it stands to reason that second mortgages on those same properties have zero value.

The big four are certainly well aware of this problem and are looking for ways to extend the wherewithal of underwater borrowers and pretend they don’t need to take losses on these loans. On paper, these companies are very well capitalized. However, in the real world, the likely losses they must eventually take on loans already on their books would probably render them insolvent. This is what I hinted yesterday in my post on the stress tests.

I said:

I would say the stress tests were a mock exercise to instil confidence in the capital markets. This was important first and foremost because it would induce private investors to pay for bank recapitalization instead of taxpayers. But it was also important for the economy as a whole as the sick banking sector was dragging the whole economy down. The key, however, is that the tests were a mock exercise. Despite the additional capital, banks are still hiding hundreds of billions of dollars in losses in level three, hold to maturity, and off balance sheet asset pools. If asset prices fall and/or the economy weakens, all of this subterfuge would be for nought.

-Geithner: jusqu’ici tout va bien:
http://www.creditwritedowns.com/2010/03/geithner-admits-stress-tests-were-an-enormous-gamble.html

And when I use the phrase ‘mock exercise,’ by mock, I mean fake. Mike Konczal has done a remarkable job of putting these two concepts – the worthless second mortgages and the stress tests – together.

He writes in a recent post:

Let’s talk specifics: Last June I made a DIY Stress Test, using values reversed-engineered from the public documents, where you could play around with the values online or download an excel spreadsheet yourself (it’s still one of my favorite blogging items). The backbone of the overview of results, page 9 from the Federal Reserve’s document, looks like this:



I’m going to isolate the four largest banks Frank questioned about second-liens, along with their loses as they’ve legally sworn to being accurate during the stress test:



Again, this is data as reported to the government by the major banks during the stress test of 2009. So what’s going on here? The four major banks have about $477 billion in junior liens, either in the form of a second mortgage or a home equity line of credit. If you go to the Fed Funds data online, you’d see that there’s about a trillion dollars of 2nd/Juniors out there, so the four major players have about half the market.

The four major players each report that they expect to have a 13-14% loss on these items under an “adverse scenario”, with Citi reporting a 20% loss under an adverse scenario. That means of the $477bn, $68.4 bn is junk that’ll never be collected on. This, combined with all the other expected losses (see the link to the stress test for the rest) meant that the four biggest players needed around $53bn to be raised.

Notice how Frank’s letter, and pretty much anyone you’d speak to who isn’t working for the four largest banks, assume that second liens in the country aren’t worth 86% of their value (for a 14% loss). You see in Frank’s letter “no economic value.” Huh. Well, that’s a problem.

Let’s look at these values again, assuming that the expected total loss would be 40%, and then 60%:



So the original loss from second-liens, as reported by the stress tests, was $68.4 billion for the four largest banks. If you look at those numbers again, and assume a loss of 40% to 60%, numbers that are not absurd by any means, you suddenly are talking a loss of between $190 billion and $285 billion. Which means if the stress tests were done with terrible 2nd lien performance in mind, there would have been an extra $150 billion dollar hole in the balance sheet of the four largest banks. Major action would have been taken against the four largest banks if this was the case.

See what I mean by fake? The point is this whole charade is transparent to anyone who actually runs the numbers. Yet, you have people like John Cassidy spreading disinformation in the New Yorker, writing puff pieces of zero negative value with drivel like this:

Other critics dismissed the tests as a sham, arguing that the economic assumptions underpinning them were too benign. As the tests unfolded, however, it became evident that the government’s loss projections were quite high, and that many banks would be forced to raise considerable sums of money—in some cases, more than ten billion dollars.

Baloney. Run the numbers like Mike did, John; and then you wouldn’t make such asinine comments. Of course the stress tests were a sham. They were a confidence trick to raise more capital and buy time for the banks to earn yet more still. The point was to allow the banks to ease into their losses. And that’s exactly what’s been happening for the past year.

The problem with the stress tests, however, is they gave the banks a way to get from under the yoke of the government’s TARP program. The banks said, “look, we are now well-capitalized even in the worst case scenario of the stress test. We want out of TARP.”

This is bad for three reasons.

* The big banks all paid back $25 billion in TARP funds. Smaller banks like Northern Trust paid back $10 billion or less. That’s hundreds of billions of capital that they all could have as a buffer against losses. Some of them raised additional capital to replenish the coffers. Nevertheless, net-net, we had less banking capital in the system after the repayments than before.
* Banks free of TARP paid out a lot of cash in bonuses that could have gone to shoring up their capital base. Every dollar paid in cash compensation to staff is a dollar less of capital. Had these banks been under TARP, they would have been forced to pay lower bonuses – if only for this year.
* The lower capital – and the fact that banks know that having renewed capital problems would mean the end of the line for them – means that banks are less likely to lend freely. They understand that now is the time to husband capital. Heads would roll if a big bank or super regional which had repaid TARP had another capital shortfall.

The real question is: why is the Obama Administration running victory laps, unrolling the ‘Mission Accomplished’ banner on the credit crisis, as Mike Konczal describes it? I suspect this is just a political stunt to provide cover in the mid-term elections to somehow demonstrate that the Democrats fixed the problem which the Republicans created.

I think it could backfire if only because the underemployment rate is still 17%. Nobody wants to hear the “I saved the economy routine” when they’re unemployed and losing their home.

[Demeter]

28. Are Capital Restrictions On Their Way to Becoming Respectable in Some Circles?

http://www.nakedcapitalism.com/2010/03/are-capital-restrictions-on-their-way-to-becoming-respectable-in-some-circles.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


We’ve had (depending on when you define the starting point) at least two decades of a concerted push by the US towards more open capital markets (no doubt based not simply on the belief that the Anglo/Saxon model was superior, but also on the notion that US financial firms would come out on top).

Many orthodox economists will concede that restrictions on capital flows and trade can be beneficial for developing economies, but would not endorse them for mature ones. Yet the Panglossian faith in wide open capital markets airbrushes out a few inconvenient considerations. One is that the extensive historical dataset constructed by Carmen Reinhard and Kenneth Rogoff shows a strong correlation between high levels of cross border capital flows and bank crises. Two is that high levels of international money flows poses more than a wee problem of national sovereignty. How do nationally based financial regimes regulate firms with global operations?

The Financial Times reports on a move afoot in the EU that will restrict investors in the EU from putting funds in private equity firms outside the EU, and also restricting the ability of foreign investors to buy European companies (frankly, as someone who has worked on more than a few cross border deals, a good business generally has no trouble finding domestic buyers. If local/regional players, who presumably have an information advantage by knowing the local market, won’t stump up for a particularly business, why should an offshore investor do better? Yes, there are always exceptions, but one needs to be plenty wary).

Reader Swedish Lex noted:

In parallel with the Greece/Goldman/default swaps/hedge fund vampire night dinners, etc., the EU is slowly advancing on the proposal to regulate hedge funds and private equity firms (and their managers).

The industry has spent vast recources over the past year in trying to water down the draft legislation, which was not entirely brilliant to start with. What seems to elude the industry is that all the bad press feeds back into the legislative process. Most of the 736 Members of the European Parliament had a vague understanding of this aspect of the financial industry to start with and, probably, believe that it has significantly contributed to the financial crisis. The very bad PR for hedge funds and over-leveraged and job slashing PE firms over the past weeks are hardly helping the industry.

What I find silly is that the Industry, in its efforts to convince the Parlamentarians, and the other relevant EU Institutions, are using the same bad old arguments like if you regulate in Europe, it will scare off investment and the pensions of ordinary people are jeopardized. Well yes, the EU does not welcome trashy short-term cancerogenus cash spreading from Cayman funds run by math nerds that design real nukes one day and their financial equivalent the next.

There will be a compromise in the end, but it is too early to say what it will be. Greece etc. could continue to have an interesting influence on the debate.

From the Financial Times:

Europe risks building a protectionist wall between itself and the global private equity industry if plans for a sweeping overhaul of regulation in the sector go ahead, some of the world’s biggest institutional investors have warned.

The warning from the International Limited Partners Association, representing 220 of the biggest pension funds, endowments and sovereign wealth funds, comes at a sensitive time with European Union lawmakers and member states close to agreeing new rules

Investors based in the EU could be barred from investing in private equity funds based outside the 27-country bloc, said the ILPA, whose members have more than $1,000bn (£667bn) invested in private equity worldwide.

In addition, the proposed regulation could “severely disturb” many of the world’s biggest private equity groups by depriving them of access to EU investors, while in turn reducing foreign investment into EU companies.

“Not only will EU investors have reduced access to non-EU private equity managers, there exists a real concern that the proposal will effectively close Europe off from the capital solutions . . . that comprise the global private equity industry,” it said.

Yves here. The chutzpah is breathtaking. Foreign firms are trying to bully EU officials? This is a great way to win friends and influence people. So what if they are severely disturbed? Europe functioned before there ever was a PE industry, and from what I can tell, its hotbed of innovation, the German Mittelstand, does not have much traffic with PE investors.

The idea that what is good for the private equity industry may not be good for the average citizen appears not to have occurred to these operators. Tone-deaf behavior like this ILPA letter is only good to feed the already high suspicions of about whether financiers have any social conscience.

[Demeter]

33. No One’s Issuing Credit—Why Are Auerback and Parenteau?

http://www.nakedcapitalism.com/2010/03/guest-post-no-one%E2%80%99s-issuing-credit%E2%80%94why-are-auerback-and-parenteau.html

By John Ryskamp, an attorney and author of The Eminent Domain Revolt

Why, in their article on Latvia’s austerity budget, are Marshall Auerback and Robert Parenteau giving Latvia credit for warm, fuzzy feelings? Especially in the context of Draconian cuts? It’s because Auerback and Parenteau don’t know what they want—their emotions are not grounded in any articulated policies. So they sound friendly. But are they friendly?

Let’s take a look. Maybe they just haven’t got their terms straight. For example, they say: “Mainstream economics insists that one path to full employment is via lower wages.” No, that’s not mainstream economics—that’s police state economics. That’s simply liquidation. They seem blithely unaware that since the power structure in America decided the suburbanization binge was over—that our suburban cow had ceased to be a profit center and had turned into a cash guzzler—America is no longer a paying proposition. So power is taking its flunkey, Uncle Sam, out of government.

That’s liquidation: power is withdrawing government from American society—and right on cue, the rest of the world is following suit, including Latvia.

Memories are short—and sometimes, even truncated. Just because World War II cut short Mellonesque liquidation, don’t for a minute buy the argument that somehow it wasn’t still policy right through the Roosevelt Administration—or that it isn’t always waiting in the wings, asserting itself all the time against countervailing forces (we shall return to those forces).

Liquidation is what is going on in Latvia. There is no attempt to achieve full employment or any other level of employment. Check out liquidation’s repertoire of techniques:

1. monetization
2. cartelization
3. currency race to the bottom gambits
4. credit contraction
5. induced supply chain collapse

and that’s just a very few of them—including, of course, shrinking the budget. The problem is that we don’t have a SINGLE academic study of liquidation as a sociopathology. When and why is each technique picked up and put down by liquidation? We just don’t know. Indeed, according to a supply chain management professor in the UK, to whom I put this question, there is no academic study of supply chain deterioration.

Power goes to power. Power is the assumption AND deduction of power. Power is the means AND the end of power. So Andrew Mellon would have had us believe, and when the going gets tough guess what? We believe it. They seem to have swallowed it in Latvia, and in the United States. I see no evidence of tax strikes, uprisings or any organization revolutionary movement, calling liquidation what it is. The protests are as vague and helpless as the implied protests of Auerback and Parenteau. We must toughen our minds.

Look what Auerback and Parenteau say is the motive of the powerful in Latvia (and their superiors elsewhere). They say the policy of power is to “internally deflate.” This is imprecise. Latvia is liquidating, but also somehow the policy is to maintain full employment. Huh? For them, Latvia is acting “under the mistaken assumption that the was inviolable,” and then they go on to cite the numerous problems with a currency peg.

But it’s not a problem if liquidation is your goal, and looting the population is one way you go about it. I don’t think the powerful in Latvia were under any assumption, mistaken or otherwise, about a currency peg. It is a liquidation technique, a technique for looting—it is not tenable to believe it is invoked without knowing why it exists and what it does.

They call a “hidden assumption”—unknown to the powers in Latvia which provoked collapsing labor costs and prices—the idea that “a debt deflation spiral does not do the host country in as domestic private incomes are deflated.” It is not credible that anyone in a position to invoke a collapse in income, demand and prices, does not know the point of these gambits. It is liquidation. Nor do Auerback and Parenteau show any evidence that the powerful in Latvia share their concerns and are simply naïve, or wrongheaded.

Look at the other thoughts they put in the heads of the powerful in Latvia: “Policy makers have tied both their hands and their feet behind their backs so that markets could work their self-adjusting magic.” Where is the evidence that the powerful in Latvia believe there is such a thing as a market, much less that it is self-adjusting? There is none. Indeed, all the evidence Auerback and Parenteau put forward is that the powerful in Latvia are putting forward all the liquidationist tricks put forward under any police state, Mussolini, Hitler, Stalin—you name it.

There is nothing magical, and no mystery, about a police state. What is mysterious is constantly imputing benign motives to people when the evidence shows they are carrying out police state acts.

Here’s another one: “In each of these nations, if the private sector is retrenching already, and the public sector tries to retrench on top of that, unless a massive swing in foreign trade can be accomplished, policy makers are unwittingly inviting falling private nominal incomes and private debt distress into the picture as they reverse fiscal stimulus.” Perhaps the problem with this notion is that Auerback and Parenteau regard as stimulus, bailing out bankrupt Ponzi schemes. Co-conspiring is stimulus? A new definition of the word “stimulus,” to quote the guy in Rules of the Game. But then, I guess if you believe it isn’t, then the logical conclusion is that those who promote “stimulus” are capable of doing things “unwittingly.”

In short, Auerback and Parenteau impute good faith where all the evidence shows there is only liquidation. Why? Because they’re soft on rights. Almost everyone else is, too. The day we gave the political system near absolute power over facts (we did it here in 1937 with West Coast Hotel v. Parrish), and thereby denied ourselves any rights, we let the political system define all the terms. In return for a middle class existence, we surrendered our right to find out the facts. It’s called “health and welfare.” We let the political system decide that. We are not allowed to intervene as individuals.

So we haven’t really inquired into the facts, and we’ve sort of lost the ability to inquire into the facts. Auerback and Parenteau are examples of this. It sounds like their approach tolerates “some” liquidation, “some” level of unemployment. They don’t really understand that the countervailing force to power, is rights. For example, the authors of the U.S. Constitution see only two forces. They see the police state (which wanted to hang them all), and important facts.

Important facts are unchanging facts of human experience, facts which history has demonstrated, are robust and resilient in the face of attempts to affect them. For the Founders, these facts included protected speech. For us—or at any rate, for those of us who have persisted in factual investigations—these facts also include housing, liberty, maintenance, education and medical care.

When important facts are defended, power weakens; when important facts are not defended, power strengthens. That’s the sum total of the Constitution. How can you defend important facts against assault, when you can’t provide the evidence that they are important, because you don’t know that the issue is importance?

Police states know perfectly what important facts are—and they hate them. Does that put you, reader, in the crosshairs? Gee, d’ya think?

It would clarify the thinking of Auerback and Parenteau, and clarify our response to what they write, if they could tell us with regard to two facts they consider so important in their article—income and employment—whether they think those are important facts as defined above.

I think they are indicia or aspects of maintenance, and I think maintenance turns back attacks by interrelating maintenance with income and employment—and also with housing! And also with protected speech! The maintenance of important facts—which, according to this analysis, is what the law does, and only what it does—is a complex, ongoing venture which requires vigilance—political, and intellectual and observational vigilance.

If you practice this vigilance, you really see what Latvia is doing, even according to the generous (naïve?) interpretation of Auerback and Parenteau. It is saying that income and employment are goals, not facts. It is saying that income is maintained by destroying income, and employment is maintained by destroying income. In short, complete nonsense. The evidence shows that income and employment ARE facts, are important facts, not goals, and not policy.

This is why I say that the only response to liquidation, is individually enforceable rights. And that’s why I wrote the New Bill of Rights. It says:

No individual shall be involuntarily deprived of liberty;
No individual shall be involuntarily deprived of housing;
No individual shall be involuntarily deprived of maintenance;
No individual shall be involuntarily deprived of medical care;
No individual shall be involuntarily deprived of education.

If this was the law in Latvia, could the cuts described by Auerback and Parenteau, occur? No.

Is this a laundry list of worthy goals, a grab bag of ideals? No. It is the progress we have made—exercising the individually enforceable rights we have—toward investigating the facts of human experience. We have pretty conclusively demonstrated, with regard to the facts above, that they are important facts.

You only have to understand the issue, to find that this process of evaluation is continually going on. For example, is property an important fact. It may interest you to know that the investigation is inconclusive so far. Also, we are revisiting the settled principle that an exercise of religion is an important fact. Who knew?

If you want to see a perfect example of this investigation going on with respect to a fact—from an initial point of view that it should be left to politics, to a point of view that individuals have control over it—look at the new right to education in the state of New Jersey. I suggest you go to www.edlawcenter.org, to understand the exacting—but exactly vital—process we have to go through, in order to fight liquidation.

OKAY TANSY AND ANNED--HERE'S ANOTHER PLANK FOR THE PLATFORM!

[Demeter]

34. The Empire Continues to Strike Back: Team Obama Propaganda Campaign Reaches Fever Pitch

http://www.nakedcapitalism.com/2010/03/the-empire-continues-to-strike-back-team-obama-propaganda-campaign-reaches-fever-pitch.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29


I’ve seldom seen so much rubbish written by people who ought to know better in a single day. Many able people have heaped the scorn and incredulity on three articles, one a piece on Rahm Emanuel slotted to run in the Sunday New York Times Magazine, another an artfully packed laudatory piece on Timothy Geithner by John Cassidy in the New Yorker and a more even handed looking one (I stress “looking”) in the Atlantic.

Ed Harrison has skillfully shredded parsed the Geithner pieces . Simon Johnson thrashed the New Yorker story. A key paragraph below:

"The main feature of the plan, of course, was – following the stress tests – to communicate effectively that there was a government guarantee behind every major bank or quasi-bank in the United States. Of course this works in the short-term – investors like such guarantees. But there’s a good reason we usually don’t guarantee all financial institutions – or act happy when other countries do the same. Unconditional bailouts lead to trouble, encouraging reckless risk-taking and undermining responsible governance. You can’t run any form of reasonable market system when some big players hold “get out of bankruptcy free” cards."

Banking expert Chris Whalen was so disturbed by the numerous distortions in the New Yorker piece that he had already fired off a long letter to the editor by the time I pinged him, with these starting paragraphs:

"Jack Cassidy tells us that “Timothy Geithner’s financial plan is working—and making him very unpopular.” Unfortunately this is completely wrong. Cassidy’s comment just illustrates why the New Yorker has fallen into such obscurity, namely because it is more Vanity Fair than its vivacious sibling and unable to perform critical journalism.

In fact, the banking system is continuing to sink under bad loans and even worse securities losses. Telling the public that the banks are “fixed” is irresponsible. Unfortunately this false perception is widespread, including among major media such as CNBC and also with a number of my clients in the hedge fund world."

And from Marshall Auerback, who had a ringside view of the aftermath of the Japanese bubble:

"Cassidy’s article brings to mind a retort by Chou En Lai when he was asked about the success of the French Revolution. He said, “It’s too early to tell”. Yet here we have John Cassidy from the New Yorker and Joshua Green from The Atlantic both making the assumption that the Geithner plan “worked”. This whole line about “taxpayers to recover bailout money” is based on an accounting fraud, because accounting abuses are the primary means by which TARP recipients have repaid bailout money — putting us at greater risk. That may seem paradoxical, but the rush to repay is driven by a desire to have unrestrained executive bonuses (a very bad thing associated with far greater accounting fraud and failures — requiring future, larger taxpayer bailouts) and accounting abuses produce the (fictional) ability to repay the United States (primarily by failing to recognize existing losses). The TARP recipients weakened their financial condition, and increased moral hazard, when they rushed to repay the TARP funds. Both factors increase the risk of making more expensive future bailouts more likely."

Yves here. The reason that people who can discern clearly what is afoot are so deeply disturbed is simple, and all the comments touch on it. The campaign to defend Geithner and Emanuel, both architects of the administration’s finance friendly policies has gone beyond what most people would see as spin into such an aggressive effort to manipulate popular perceptions that it is not a stretch to call it propaganda.

This strategy, of relying on propaganda to mask their true intent, has become inevitable, given the strategic corner the Obama Administration has painted itself in. And this campaign has become increasingly desperate as the inconsistency between the Administration “product positioning” and observable reality become increasingly evident.

Recall how we got here. Early in 2009, the banking industry was on the ropes. Both the stock and the credit default swaps markets said that many of the big players were at serious risk of failure. Commentators debated whether to nationalize Citibank, Bank of America, and other large, floundering institutions.

The case for bold action was sound. The history of financial crises showed that the least costly approach is to resolve mortally wounded organizations, install new management, set strict guidelines, and separate out the bad loans and investments in order to restructure and sell them. An IMF study of 124 banking crises concluded that regulatory forbearance, the term of art for letting impaired banks soldier on, found:

"The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred…"

Shuttering sick banks is hardly a radical idea; the FDIC does it on a routine basis. So the difference here was not in the nature of the exercise, but its operational complexity.

This juncture was a crucial window of opportunity. The financial services industry had become systematically predatory. Its victims now extended well beyond precarious, clueless, and sometimes undisciplined consumers who took on too much debt via credit cards with gotcha features that successfully enticed into a treadmill of chronic debt, or now infamous subprime and option-ARM mortgages.

Over twenty years of malfeasance, from the savings and loan crisis (where fraud was a leading cause of bank failures) to a catastrophic set of blow-ups in over the counter derivatives in 1994, which produced total losses of $1.5 trillion, the biggest wipeout since the 1929 crash, through a 1990s subprime meltdown, dot com chicanery, Enron and other accounting scandals, and now the global financial crisis, the industry each time had been able to beat AND neuter meaningful reform. But this time, the scale of the damage was so great that it extended beyond investors to hapless bystanders, ordinary citizens who were also paying via their taxes and job losses. And unlike the past, where news of financial blow-ups was largely confined to the business section, the public could not miss the scale of the damage and how it came about, and was outraged.

The widespread, vocal opposition to the TARP was evidence that a once complacent populace had been roused. Reform, if proposed with energy and confidence, wasn’t a risk; not only was it badly needed, it was just what voters wanted.

But incoming president Obama failed to act. Whether he failed to see the opportunity, didn’t understand it, or was simply not interested is moot. Rather than bring vested banking interests to heel, the Obama administration instead chose to reconstitute, as much as possible, the very same industry whose reckless pursuit of profit had thrown the world economy off the cliff. There would be no Nixon goes to China moment from the architects of the policies that created the crisis, namely Treasury Secretary Timothy Geithner, Federal Reserve Chairman Ben Bernanke, and Director of the National Economic Council Larry Summers.

Defenders of the administration no doubt will content that the public was not ready for measures like the putting large banks like Citigroup into receivership. Even if that were true (and the current widespread outrage against banks says otherwise), that view assumes that the executive branch is a mere spectator, when it has the most powerful bully pulpit in the nation. Other leaders have taken unpopular moves and still maintained public support.

Obama’s repudiation of his campaign promise of change, by turning his back on meaningful reform of the financial services industry, in turn locked his Administration into a course of action. The new administration would have no choice other that working fist in glove with the banksters, supporting and amplifying their own, well established, propaganda efforts.

Thus Obama’s incentives are to come up with “solutions” that paper over problems, avoid meaningful conflict with the industry, minimize complaints, and restore the old practice of using leverage and investment gains to cover up stagnation in worker incomes. Potemkin reforms dovetail with the financial service industry’s goal of forestalling any measures that would interfere with its looting. So the only problem with this picture was how to fool the now-impoverished public into thinking a program of Mussolini-style corporatism represented progress.

How did the Administration and financial services message control teams work together?

The first was the refusal to consider investigations of any kind. Obama is widely reported to have studied the early days of Franklin Delano Roosevelt’s administration for inspiration; it would be impossible for him to miss the dramatic steps FDR took, including supporting the continuation of a Senate Banking Committee investigation into the misdeeds of the Roaring Twenties, the Pecora Commission. The Pecora Commission not only kept the bankers on the defensive, but it also did the forensic work into the abuses. It was critical to bring the nefarious practices to light to devise durable and lasting reforms.

Why were there no inquiries into how the firms that needed bailouts got themselves into a mess? This was an obvious and comparatively easy avenue of inquiry which would make a great deal of useful background accessible and identified issues for further examination. For instance, after the rescue of UBS, the Swiss Federal Banking Commission required UBS to provide an extensive report of what went wrong, and also had the bank make considerable portions of that information public, via a special report to its shareholders. Yet no US firm has been asked to make any explanation of how it managed its affairs so badly as to require extensive public support to keep from failing.

The choice here was obvious. A refusal to investigate was tantamount to a refusal to reform. A good understanding of what had happened was essential, not merely to develop sound new rules, but also to keep the industry from muddying the waters, which would be easy to do, given how complex and opaque many of the products are.

More compelling evidence of the Administration’s lack of interest in reining in the money-changers came via Treasury Secretary Timothy Geithner’s first presentation on his reform plan, which was more accurately a plan to have a plan. It was widely criticized for its sketchiness, but most observers missed the true significance. Had the Obama transition team done any serious thinking about the financial crisis? Obviously not, because you don’t need to think too hard if the game plan is to go back to business as usual to the extent possible. Geither’s presentation came nearly three weeks after Obama was sworn in, and all its initiatives were Bush/Paulson wine in new bottles: a new go at the failed idea of having the government overpay for bad bank assets; “stress tests” to put more discipline around the process of handing out TARP funds to the needy; and a mortgage modification program which pretended to be able to square the circle of saving borrowers without taking on investors in mortgage securitizations.

Geithner’s not-much-of-a-plan exemplified the second tool in the Obama campaign to sell doing as little as possible to the financiers: the Theory of Positive Thinking.
.
That notion has a proud tradition in America and was much in evidence in the run-up to the crisis. It promises that the economy will be fine as long as everyone thinks happy thoughts about it. For instance, I noted in a March 2007 blog post that while the tone of the Financial Times as of March 2007 had become generally grim, the US had become a Tinkerbell market, where valuations are held aloft by faith, and participants conspire to stoke true belief. And as the crisis wore on, other magical personages intervened. As a hedge fund manager who writes as Augustus Melmotte noted,

The market responded with enthusiasm to reports that the Tooth Fairy has agreed to acquire Lehman. The purchase price has not yet been determined and will be set by Dick Fuld wishing upon a star, clicking his heels three times, and being transported back to that magical place where Lehman still sells for over $70 per share….. Meanwhile, the SEC has announced an investigation of mean, evil, bad short-seller David Einhorn. …. Einhorn reportedly suggested that the Tooth Fairy does not exist and that wishing upon a star is not a wholly reliable price discovery mechanism. Christopher Cox, chairman of the SEC, said, “Vicious rumors attacking the Tooth Fairy will not be tolerated. Our entire financial system and indeed the American way of life depend on the Tooth Fairy and wishing upon a star…” The SEC is reportedly planning to set up re-education camps for short-sellers.

Remember that the US has an entire cable channel devoted to the Theory of Positive Thinking, namely CNBC, and a goodly portion of the financial media falls into CNBC-style cheerleading with more than occasional abandon.

Now it is true that this idea has a kernel of truth. John Maynard Keynes attributed the Depression to a change in investor “liquidity preferences,” which meant they had suddenly become very risk averse and preferred to hold cash until they felt conditions had improved, with devastating consequences for economic activity. Uncertainty can morph into a self-reinforcing downcycle. But it is one thing to use confidence boosting as a tool, quite another to regard it as a magic bullet. Merely clapping our hands all together will not cure the long-standing ailments in the economy.

Moreover, the Theory of Positive Thinking has been used, upon occasion, to suggest that conditions will only deteriorate if the public examines the financial services industry critically. It isn’t hard to see whose interests benefit from that posture.

Now it is hard to prove in a tidy way that the tone of financial press coverage had shifted suddenly, and decisively, to optimism as of early March. But many professional investors in my circle started regularly talking of cheerleading. Two Wall Street veterans, Sandy Lewis and William Cohan, weighed in on this pattern at the New York Times:

Whether at a fund-raising dinner for wealthy supporters in Beverly Hills, or at an Air Force base in Nevada, or at Charlie Rose’s table in New York City, President Obama is conducting an all-out campaign to try to make us feel a whole lot better about the economy as quickly as possible… We’re concerned that nothing has really been fixed. We’re doubly concerned that people appear to feel the worst of the storm is over — and in this, they are aided and abetted by a hugely popular and charismatic president and by the fact that the Dow has increased by 35 percent or so since Mr. Obama started to lay out his economic plans in March.

This result relied on more than mere dint of personality. A Pew Research Center study found that roughly government and businesses originated over half the economics-related news after the crisis. Obama himself “dominated” the key images and ideas. The reporting had a clear arc. The early coverage focused on the struggles over the stimulus plan and the banking industry plans, and as those faded, so did coverage of the crisis in any form. The tacit assumption was that the crisis was over, and the performance of the supposedly forward looking stock market was proof. But as anyone with a modicum of detachment could see, the market was a false positive, treating an aversion of utter disaster as an imminent return to normalcy.

The stock market has rallied over 60% from its early March lows, enabling the wounded banks to sell new equity to the public and avoid further contentious taxpayer-funded rescue measures. But the justification for the soft glove treatment of the banking classes, that what was good for them would prove to be good for everyone else, has proven to be wildly false. When the Dow levitated over 10,000, mainstream news outlets celebrated the event, with nary a mention of the continued train wreck in the real economy. As Matt Taibbi observed, “the dichotomy between the economic health of ordinary people and the traditional ‘market indicators’ is not merely a non-story, it is a sort of taboo — unmentionable in major news coverage.”

But banking boosterism has succeeded all too well, allowing Team Obama to fantasize that it can get away with creating Potemkin prosperity in lieu of waging the pitched battles needed to lay the groundwork for the real thing.

Indeed, the adoption of the Theory of Positive Thinking has virtually guaranteed that nothing will change, unless there is sufficient deterioration in the real economy or the financial markets to provide compelling counter-evidence. One example is the “paying back the TARP” charade. As the banks continued to post improved earnings, no matter how phony they were, they argued that they were now healthy and should be allowed to pay back the TARP funding that had been crucial to their survival. The reason they were so keenly motivated to do should have been reason enough to deny their request: namely, that they wanted to escape restraints on executive compensation, virtually the only demand that the government had made. But overpaying staff and keeping too little in the way of risk reserves was precisely the behavior that led to the near collapse of the financial system. Going back to business as usual would virtually guarantee more looting of major financial firm and another series of collapses.

But the Obama administration miscalculated badly. First, it bought the financiers’ false promise that massive subsidies to them would kick start a economy. But economists are now estimating that it is likely to take five years to return to pre-crisis levels of unemployment. Obama took his eye off the ball. A Democratic President’s most important responsibility is job creation. It is simply unacceptable to most Americans for Wall Street to be reaping record profits and bonuses while the rest of the country is suffering. Second, it assumed finance was too complicated to hold the attention of most citizens, and so the (non) initiatives under way now would attract comparatively little scrutiny. But as public ire remains high, the press coverage has become almost schizophrenic. Obvious public relations plants, like Ben Bernanke'S designation as Time Magazine’s Man of the Year (precisely when his confirmation is running into unexpected opposition) and stories in the New York Times that incorrectly reported some Goldman executive bonus cosmetics as meaningful concessions have co-existed with reports on the abject failure of Geithner’s mortgage modification program. While mainstream press coverage is still largely flattering, the desperation of the recent PR moves versus the continued public ire and recognition of where the Administrations priorities truly lie means the fissures are becoming a gaping chasm.

So with Obama’s popularity falling sharply, it should be no surprise that the Administration is resorting to more concerted propaganda efforts. It may have no choice. Having ceded so much ground to the financiers, it has lost control of the battlefield. The banking lobbyists have perfected their tactics for blocking reform over the last two decades. Team Obama naively cast its lot with an industry that is vastly more skilled in the the dark art of the manufacture of consent than it is.

[Joe Chi Minh]

45. Beyond the voodoo void of finance

http://www.guardian.co.uk/commentisfree/cifamerica/2010/mar/10/obama-us-banking-sector-reform

".... onshore nation". I like the sound of that.

It shouldn't end there, but charity begins at home. There is no good reason for the ultra rich to remain so, by outsourcing their corporations' work, while the populace sinks into indigence.

A greatly reduced multiple of CEO's earnings in relation to their lowest-paid employee should be enforced, as MacArthur did in Japan, after WWII.

Another Guardian article of interest, perhaps:

http://www.guardian.co.uk/commentisfree/cifamerica/2010/mar/10/alan-greenspan-inflation-china