STOCK MARKET WATCH, Wednesday, October 26, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Wednesday, October 26, 2011

AT THE CLOSING BELL ON October 25, 2011

Dow 11,706.62 -207.00 (-1.77%)
Nasdaq 2,638.42 -61.02 (-2.31%)
S&P 500 1,229.05 -25.14 (-2.05%)
10-Yr Bond... 2.15 +0.03 (+1.61%)
30-Year Bond 3.16 +0.03 (+0.89%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

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

Financial Sector Officials Convicted since 1/20/09 = 12

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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

[Pale Blue Dot]

1. Today's Reports

Oct 26 07:00 MBA Mortgage Index 10/22 NA NA -14.9%
Oct 26 08:30 Durable Orders Sep -1.5% -1.0% -0.1%
Oct 26 08:30 Durable Orders -ex Transportation Sep -0.1% 0.4% 0.0% -0.1%
Oct 26 10:00 New Home Sales Sep 290K 300K 295K
Oct 26 10:30 Crude Inventories 10/22 NA NA -4.729M

Read more: http://www.briefing.com/investor/calendars/economic/2011/10/24-28/#ixzz1bstUCccV

[Roland99]

38. U.S. durable-goods orders drop 0.8% in September (markets rejoice!)

http://www.marketwatch.com/story/us-durable-goods-orders-drop-08-in-september-2011-10-26?siteid=trackedcomment#comment6444934

Orders for durable goods fell 0.8% in September almost entirely because of lower demand for autos and commercial aircraft, the U.S. Commerce Department said Wednesday. Transportation orders sank 7.5%. Economists surveyed by MarketWatch had expected total orders to fall by 1.0%. Yet orders minus transportation rose 1.7% and orders for core capital goods, which omit the volatile defense and transportation sectors, climbed 2.4%. Core capital orders give a better read on trends in the private sector. Shipments of core capital goods, however, declined by 0.9%. The government uses the shipments data to help calculate gross domestic product. Orders for August were unrevised at a 0.1% decline.

However...

http://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf

"Inventories of manufactured durable goods in
September, up twenty one consecutive months, increased
$0.4 billion or 0.1 percent to $365.6 billion. This was at
the highest level since the series was first published on a
NAICS basis in 1992 and followed a 0.9 percent August
increase."

Markets trading on Hopium.

[Pale Blue Dot]

2. Oil rises near $94 as traders eye Europe debt plan

SINGAPORE – Oil prices rose to near $94 a barrel in Asia as traders bet Europe will announce a plan later Wednesday that helps solve its debt crisis.

Benchmark crude for December delivery was up 52 cents at $93.69 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.90, or 2.1 percent, to settle at $93.17 in New York on Tuesday.

Brent crude was up 54 cents at $111.46 a barrel on the ICE Futures Exchange in London.

Crude has soared 24 percent from $75 three weeks ago on expectations Europe will be able to contain its sovereign debt crisis. Investors will be closely watching a summit of European leaders later Wednesday for details of a comprehensive plan to limit damage from a possible Greek debt default.

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

[Demeter]

4. They better stop sniffing the petroleum products

[xchrom]

41. IMF: Mideast oil importers face economic slowdown

http://hosted.ap.org/dynamic/stories/M/ML_MIDEAST_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-10-26-09-02-40

DUBAI, United Arab Emirates (AP) -- Middle Eastern countries without significant oil resources face a sharp slowdown in economic growth as the effects of the Arab Spring reverberate across the region, the International Monetary Fund said Wednesday.

In a twice-yearly report, the IMF cut its economic growth forecast for the Mideast's oil importing countries - including Egypt and Tunisia - to just 1.9 percent this year. That is down from an earlier IMF forecast of 2.3 percent and well below the more than 4 percent growth in 2010.

The Washington-based fund predicts their growth in 2012 will also be weaker than anticipated, coming in at around 3 percent.

"Since the beginning of this year, a deterioration in the international economic outlook and the buildup of domestic social pressures have resulted in an economic slowdown in many of the region's oil-importing countries," said Masood Ahmed, the director of the IMF's Middle East and Central Asia department.

[Pale Blue Dot]

3. U.S. Stock-Index Futures Rise; Amazon Sinks as Third-Quarter Profit Slumps

U.S. stock-index futures climbed, indicating the Standard & Poor’s 500 Index will rise for the fourth day in five, amid optimism that company earnings show equities are undervalued.

Futures on the S&P 500 expiring in December gained 0.5 percent to 1,230.2 at 6:33 a.m. in New York. Dow Jones Industrial Average futures advanced 47 points, or 0.4 percent, to 11,709.

“Valuations are still supportive,” said Bill O’Neill, the London-based chief investment officer for Europe, the Middle East and Africa at Bank of America Corp.’s Merrill Lynch Wealth Management, which manages $1.5 trillion. The market is “discounting a negative economic outlook.” He maintains a “positive” position on U.S. stocks.

The S&P 500 rallied from the threshold of a bear market early in October on steps by European leaders to support banks and higher-than-estimated corporate earnings. The benchmark gauge for American equities has rallied 8.6 percent so far in October, following five months of declines. The gauge is trading at 12.4 times the estimated earnings of its companies, compared with an average ratio of 14.5 over the the past five years, according to data compiled by Bloomberg.

http://www.bloomberg.com/news/2011-10-26/u-s-stock-index-futures-rise-amazon-slides-as-profit-slumps.html

[Po_d Mainiac]

6. Reality and Amazon will have a meeting

as States start to pursue State/Local sales taxes. Lost in the fine print was a margin of 3. That's not just thin, that's unsustainable.

[xchrom]

7. what is happening w/ amazon?

i don't understand exactly what's going on w/ it.

[Demeter]

11. Reality. Amazon doesn't understand it, either

[xchrom]

12. LOL. nt

[Po_d Mainiac]

14. It's business model,

and profit structure are pretty much based on the price differential between 'brick and mortar' retailers that charge sales use tax, and internet sellers that don't.

Amazon doesn't offer anything but perhaps convenience. If they were forced to collect and thereby charge State and Local sales/use taxes, much of their offerings would be priced out of the market.

ymmv

[xchrom]

16. thanks! nt

[Fuddnik]

33. It's a little bit different.

I've bought a few things through Amazon.

Filters for my pool are typically about $30 cheaper than pool stores. $50 vs $80. Same brand.

I bought a Korg Synthesizer last year. It was $100 cheaper than Best Buy, had a better warranty, and no sales tax.
----------------------------------------------------------

But, I watched their stock price drop $42, between 4:00pm and 4:10 pm yesterday.

[Po_d Mainiac]

45. Some items are priced much better than other sources.

But not across the board. 3% is a razor thin margin, and wiped out by just a mild case of heartburn.

[Po_d Mainiac]

47. question:

Did you notice if these were drop shipped?

[DemReadingDU]

55. Drop shipped?

what is that?

[Po_d Mainiac]

66. You purchase through a retailer

but the item is shipped from either the manufacturer or a central warehouse.

Fairly common practice when dealing with bulky and/or heavy items that incur much of their final retail price due to transportation expenses. Cuts the cost by elimanating a truck ride.

kapish?

[DemReadingDU]

72. Oh, that has happened

A few years ago, I ordered a bunch of heavy rugs from JCPenney. But the rugs were shipped direct from the warehouse.
Thanks for the explanation!

[Fuddnik]

75. Yes, they were.

[Po_d Mainiac]

90. Which illustrates another problem

Mfgrs are realizing they can eliminate the middleman (in this case Amazon) and sell directly to the consumer. As agreements to exclusivity (selling via the web) through Amazon sunset their 'catalog' shrinks. Good chance in the future, when you google those filters, Amazon won't appear on the page.

[Ghost Dog]

95. You mean Google becomes, in some sense, the only middleman?

(Or similar search-engine). Hmmm.

[Roland99]

50. Same thing that happened to Netflix (or Ebay back in the dot-com days)

P/E ratios way out of whack with reality.

Stock price rising purely out of hypnotic buying and momentum.

[Roland99]

51. Some charts for AMZN

http://www.zerohedge.com/news/two-1-charts-matter-amazons-earnings-release

[Demeter]

5. A Generation of CEOs Who Don’t Know How to Raise Wages By Dean Baker (EXCEPT FOR THEMSELVES)

http://www.nationofchange.org/generation-ceos-who-don-t-know-how-raise-wages-1319553189

...We have been repeatedly told that, even though we have more than 25 million people unemployed or underemployed, businesses are unable to find qualified workers. For example, last week New York Times columnist Thomas Friedman took us to Illinois where Doug Oberhelman, the CEO of Caterpillar one of the largest companies in the country, complained that he could not find qualified hourly workers for his manufacturing facilities. Oberhelman went on to complain that he also could not find engineering service technicians or and even welders. Friedman also recounted a conversation with Chicago’s new mayor, former Obama chief of staff, Rahm Emanuel. According to Friedman, Emanual complained about "staring right into the whites of the eyes of the skills shortage." Friedman recounts a story from Emanuel about two young CEOs in the healthcare software business who claimed that they have 50 job openings today, but can’t find the people. There are many other accounts like the ones in Friedman’s column of businesses who find their growth prospects stunted by their inability to hire good workers. There are two parts to this story that should bother people.

First, in spite of all the complaints in the media about businesses not being able to find good workers, this problem doesn’t seem to show up in the data. According to the Bureau of Labor Statistics, the overall ratio of job openings to existing jobs is just 2.3 percent. This is down by almost a third from its pre-recession level. Mr. Oberhelman’s experience at Caterpillar doesn’t seem to be common among his peers; the job opening rate in manufacturing is just 2.0 percent. Even in professional and business services, the category that would likely include the workers that the software execs wanted, the job opening rate is just 3.5 percent, down by more than 25 percent from pre-recession levels...As a group employers also don’t seem to see inadequate worker skills as a problem when asked in surveys. The National Federation of Independent Businesses has been asking its members about the biggest problems they face for more than a quarter century. In the most recent survey only 6 percent listed labor quality as one of their top problems. This is up from the 3 percent at the trough of the downturn, but down sharply from the 24 percent peak reached more than a decade ago.

While the experience of CEOs cited by Friedman might appear to be atypical since it is not reflected in the data, there is another aspect to the problem that is even more disconcerting. These CEOs apparently do not know how a business is supposed to respond to the inability to find qualified workers. According to standard economics, when businesses can’t fill job openings, they are supposed to offer higher wages. If these businesses offered higher wages, then they could lure away workers from their competitors. They may also be able to attract workers from other states or even other countries. Certainly there are workers somewhere in the world who have the skills that are needed to work at Caterpillar or at software firms run by Mr. Emanuel’s friends. If these CEOs raised wages high enough, then these workers would be willing to work for their companies. However, they have not chosen to raise wages to the market clearing level for some reason and therefore can’t get the workers they want. Apparently, these CEOs do not know how to raise wages...This inability to raise wages is also reflected in the data. There is no major occupation group that has seen substantial increases in real wages over the last decade. Even college graduates as a group (excluding those with a post-graduate degree) have not seen an increase in real wages over the last decade. This indicates either there is no problem of skills shortages or that companies are increasingly being run by CEOs who do not know how to increase wages.

Since it would be rude to imply that CEOs are not being honest when they complain about the lack of skilled workers, we should assume that they don’t know how to raise wages. This is a problem that could be easily remedied. The government could offer short courses to CEOs and other top executives that would teach them how to raise wages and why this would be beneficial to their firms. These raise-waging instruction sessions should not be very expensive; even the thickest CEO could probably learn how to raise workers’ wages in a day or two. Most state and local governments could afford the cost, which should be easily repaid in stronger growth when employers learn how to address their skills shortage. Companies should not have to forego expansion and workers should not have to be unemployed just because CEOs don’t how to raise wages. The skills shortage problem can be fixed.

I HOPE MR. BAKER CAN GET HIS TONGUE OUT OF HIS CHEEK IN TIME FOR HALLOWE'EN. IT'S IMPOSSIBLE TO EAT CARAMELS IN THAT POSITION...

[xchrom]

8. it's morning. it's Hump Day -- i start looking for the Weekend...

:donut:

[Demeter]

9. A Fire Sale for Arsonists: The “Revised” Bank Mortgage Settlement Still Stinks By Richard (RJ) Esko

http://www.nationofchange.org/fire-sale-arsonists-revised-bank-mortgage-settlement-still-stinks-1319552563

Imagine that a group of arsonists was terrorizing your town. First they'd buy insurance on a stranger's home, then they'd show up with a blowtorch and a tanker truck filled with gasoline and burn the place down. Imagine that they've burned down a thousand homes this way, ruining the lives of the homeowners - and everyone else's, too, as real estate values plunged and the local economy collapsed...Now let's imagine that the Mayor, the DA, and the Chief of Police said they've come up with a great "settlement": The arsonists will pay a small fine, and they'll never be prosecuted for arson. Plus, if they're asked very nicely, they'll also agree to provide a little help to 27 out of the 1,000 families they made homeless - although they'd control the 'help' process and the town might wind up footing the bill anyway.

And one more thing: They get to keep the gasoline truck and the blowtorch

Substitute "country" for "town" and "banker" for "arsonist," and that pretty much sums up the mortgage fraud settlement that the Administration and some Attorneys General keep trying to impose on the nation. It's a sweetheart arrangement that asks for pennies on the dollar, would only help a tiny fraction of those harmed, and would allow the wrongdoers to keep the tools of their criminal trade - making future crimes all but irresistible to the feloniously inclined.

Here are four reasons why California Attorney General Kamala Harris and her colleagues must reject this proposal: (DETAILS AT LINK)

1. Crime must be punished

2. The punishment doesn't fit the crime

3. Helping a few when many were harmed

4. Gimme back my blowtorch, pal

At the heart of the mortgage crisis lies MERS, the artificial corporation and electronic database that served as the engine of the banks' mortgage scheme. They used MERS to circumvent local taxes, and to avoid meeting their legal obligations to provide a clear chain of title for ownership of a mortgage. They also used it to buy, bundle, and sell mortgages at light speed. (More on MERS here.) It would have been impossible to do all of the trading that drove the housing bubble, or to create the financial instruments that led to the financial crisis, without using MERS. The banks could not have engaged in their massive criminal behavior surrounding the foreclosure process without MERS. And the banks would have been required to provide full legal documentation for their activities without MERS...The arsonists who burned down the real estate economy used MERS as the blowtorch. Schneiderman, Harris, and Biden should refuse to join any settlement that doesn't either shut down MERS or require massive changes in its design, legal structure, and ownership.

Conclusion: It's a fire sale for arsonists

Kamala Harris would be doing her constituents a grave disservice by considering this offer. We trust that the holdout AGs will remain holdouts once they've had a chance to review this puncture-filled trial balloon...The AGs need to hold firm on this settlement, which is still a shameful cave-in to the big banks. No principal reduction? No deal. No dismantling of the criminals' toolbox? No deal. No jail time for bank crime? No deal. The bankers are bitching about the deal, but since the alternatives include criminal prosecution they'll eventually sign it gladly. And when they do, they won't even bother washing the stink of gasoline and ashes from their clothing. These arsonists don't deserve another fire sale.

[xchrom]

10. europe: CIS countries sign trade pact

http://www.atimes.com/atimes/Central_Asia/MJ27Ag01.html

MONTREAL - The heads of government of the participating states of the (CIS) concluded a free-trade zone (FTZ) agreement last week, meeting in St Petersburg. The heads of state of Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan and Ukraine signed the document.

Armenia, Kyrgyzstan, Moldova and Ukraine are already members of the World Trade Organization (WTO), and the WTO's rules do not prohibit FTZs. Russia has been seeking WTO membership for 18 years. Accession talks are stalled by Moscow's insistence on support for agriculture and automobile production. Russia's President Dmitry Medvedev stated on the day after the signing


ceremony that Russia "can live without" WTO membership "if we are told that we are not fit for it for some reason".

The first FTZ protocol among CIS leaders was signed in 1994, and the prospect of a final agreement has perennially been headlined at CIS summits over the last decade. Azerbaijan and Uzbekistan are also CIS members but did not attend the meeting; neither did Turkmenistan, which has observer status.

In an article published by Izvestiia two weeks earlier, on October 4, Russian Prime Minister Vladimir Putin separately announced the creation of a "Eurasian Union" as a goal of Russian foreign policy during his soon-to-be presidency.

[Po_d Mainiac]

28. eye candy

[Demeter]

30. Where does that come from, Po?

Very accurate cartoon.

[Po_d Mainiac]

46. with any image on this site

simply right click the image--then click Properties, and read the URL

[xchrom]

39. ...

:rofl: that. is. awesome.

[xchrom]

42. Pressed by EU, Berlusconi reaches pension deal

http://hosted.ap.org/dynamic/stories/E/EU_ITALY_FINANCIAL_CRISIS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-10-26-08-25-23

MILAN (AP) -- Pressed hard by the EU, Premier Silvio Berlusconi averted a government collapse and reached a deal with allies on emergency growth measures in time for an EU summit on saving the euro.

Berlusconi and Northern League leader Umberto Bossi reached a compromise on raising Italy's retirement age in late-night parliament talks Tuesday - a point of disagreement that had threatened Berlusconi's leadership. His majority in parliament needs the support of the Northern League.

Berlusconi will deliver a letter detailing the emergency measures to an EU summit later Wednesday. A spokesman said the contents are reserved for summit leaders, but Italian media reported the measures include new infrastructure spending, with a push for more private investment for strategic projects, the privatization of public entities and property and simplifying rules for companies.

Changes to Italy's pension scheme had become a major sticking point, with Bossi's party refusing to risk alienating its constituency of workers from the productive north.

[Demeter]

13. Dylan Ratigan: To Be With the 99%, President Obama Must Fire Tim Geithner

http://www.huffingtonpost.com/dylan-ratigan/to-be-with-the-99-preside_b_1021972.html

In my last piece, http://www.huffingtonpost.com/dylan-ratigan/platinum-citizenship_b_1015571.html SEE BELOW

I talked about how Tim Geithner's job over the past five years has been to (a) print money, (b) give it to rich friends, and (c) deny everyone else legal and financial rights. This shows up everywhere, from the 0% you get on your savings account versus the insider information the rich get, to your lack of access to the Fed discount window. It's a symptom of bought government, which I try to expose on our show every day. I find it laughable to hear President Obama's spokesperson talking about how his campaign represents the 99%. For starters he'd have to fire Geithner, to prove he's not the leader of a bought government. After all, it is Geithner who took a system indirectly rigged to profit the 1% at the expense of everyone else, and institutionalized and formalized it during a crisis.

The reaction to my piece was explosive -- I've rarely gotten so many comments, thoughts, and questions on a single topic. So I think it's worth addressing some of them. Here are some of your questions and comments, as well as my responses.

Casino Capitalism comments:

Any time there is talk about Obama caring about the public and latching on to OWS for his re-election campaign, there is one simple point to make - how can he possibly have any credibility when he has Geithner as Treasury Secretary. That is the single biggest indictment of Obama's intentions.

This is absolutely true. I'll quote from Ron Suskind's new book, Confidence Men:

The thirteen bankers, and especially the half dozen titans from New York, returned to their corner offices that afternoon with very strong feelings about one man in Washington: Tim Geithner.


"The sense of everyone after the big meeting was relief," said one of the bankers. "The president had us at a moment of real vulnerability. At that point, he could have ordered us to do just about anything, and we would have rolled over. But he didn't--he mostly wanted to help us out, to quell the mob. And the guy we figured we had to thank for that was Tim. He was our man in Washington."

In public life, constituencies are important. Geithner now had one: the powerful but reviled leaders of the nation's largest banks. He'd have been loath to claim their backing, just as they'd have known not to be demonstrative with support. It was, after all, a bond of mutual desperation: both Geithner and his silent backers were fighting for survival. As one banking lobbyist said, "If Tim were fired, we'd be in trouble; we knew that." Of course, he'd have plenty of job offers in New York.

And here's Austin G:

Why haven't the bankers been prosecuted? The simple answer is that going after them would expose the politicians who defended them. It would hurt the false narrative that has been created that blamed the crisis on corporate greed. As if companies only recently started caring about their bottom line. Companies are expected to care about their bottom line. Maintaining that bottom line means staying in business and continuing to employ people. Money is in politics because of the heavy handed interaction the government has with business. As long as that incentive exists then so will the influence. The simple reason for that is that people are corruptible. Ultimately regulation s are only as powerful as those who are to enforce them. Many of those regulators are overseen by Congress.

Three words, Austin: GetMoneyOut.com

Progressive RG adds:

Much of this was made worse when Congress, under Republican leadership, revised the bankruptcy code to prevent discharge of student debt and to prevent "cram-down" of residential mortgages. They made it extremely difficult for real human beings to discharge debt in bankruptcy allowing corporations to do it easily.

For those who aren't familiar with cram-down, it is a provision of the bankruptcy code that allows corporations in bankruptcy to wipe out loans for more than the appraised value of the collateral. If homeowners were allowed to do this, then they could force the banks to eat the depreciated value of their homes. They would still have to go through bankruptcy and would not retain wealth, but they don't have any wealth anyway. At least cram-down would allow them to keep their homes and reduce their mortgages to the current value of the home. Think how many people could have kept their homes if they were allowed to do what corporations can do!

Just another example of Dylan's point -- there are 2 classes of citizens. And the human class is considered inferior.

Yup, that's 100% true. Let's be clear, many Democrats voted for the Bankruptcy Bill as well. And there's one other unnoticed but important part of that bill. It privileged derivatives in bankruptcy over plain vanilla loans --yet another legal advantage that created two types of money.

Barrie Cowan comments:

The most frustrating feature of complaints like Ratigan's is that he does not point out what alternative courses of action were available to whom or when.

It's all very well to blame Geithner, but he would not have lasted twenty-four hours as chair of the FRBNY if he had attempted, say, in 2006, to do any of the things we all might now see that he should have done (and what were those things, anyway?)

Ratigan does not say just what Geithner should have done, because Ratigan does not have any idea what Geithner or anyone else in authority should have done to stop the disaster or when they should have done it.

The frustrating part of this is that we seem to be without a clear alternative course of action that someone should have taken at a particular time (Example: we know that the murder would not have occurred if the shooter had refrained from shooting the victim.) Jamie Dimon's theory, namely, that these things just happen now and then, is very unsatisfying; but is there something better?

Is there any such proposition, that is, who should have done what and when should he or she have done it, currently being expressed about the Economic Crisis? Can anyone state such a proposition?

I'll start by noting that the world would be better off if Geithner had only lasted 24 hours at the New York Fed. But alas, he lasted much, much longer. Ok, what should he have done differently? Why don't we start with real capital requirements? A bank with no capital requirements (or fake capital requirements), or a CDS with no capital requirements, allows nearly infinite leverage. It tends to drive out good players from the market, and then blow up the world. From roughly the 1930s until the 1970s, there were capital requirements. And the financial system didn't go through panics and bailouts. So that's one thing.

[Demeter]

15. Dylan Ratigan: Platinum Citizenship

http://www.huffingtonpost.com/dylan-ratigan/platinum-citizenship_b_1015571.html

About a decade ago, I read an article in The Onion, "U.S. Offers PlatinumPlus Preferred Citizenship" (SEE BELOW). Apparently, Tim Geithner did too, because from 2007-2011, this is the policy framework that he designed and executed, first as President of the New York Federal Reserve, and then as Treasury Secretary. Now, unequal democracy is not a new story, in many ways it's systemic and goes back hundreds of years. But what we're going to see in part this week is how Geithner deserves special recognition as sort of this decade's champion of making this system more explicit and entrenched...What we're going to see this week, when the Government Accountability Office releases a more detailed version of an audit of the Federal Reserve's actions during that period, is more details on how this system worked. So let me give you some context on what the Fed bailouts meant, the details to match the persuasive message of the protesters in Zuccotti Park and around the world. This is first and foremost a political story. It's a story of how bought government has changed what it means to be a citizen. So if you haven't sign our petition yet at www.GetMoneyOut.com, I hope this convinces you to do so.

The overall stats of the effects of the crisis are clear - median American pay has dropped by 10% since 2007, but on the high end, the rich have never been more powerful...I'm not interested in a sob story about inequality, I want to talk about what Geithner *did*, structurally to bring about this situation. We're all aware of the two tiered political system in which protesters can be run over by police scooters but marauders in suits are put on the President's jobs council to chuckle nervously at Occupy Wall Street. But behind the political inequality lies a new order of credit allocation. Tim Geithner created a two-tiered monetary system, a kind of money they have which you can't get. He wasn't alone in doing this. Financial institutions spent hundreds of millions of dollars influencing federal officials to coalesce a bailout while politicians treated them as a special class of super Americans. But he more than anyone else in the crisis period was the central figure in the creation of our current aristocratic monetary order.

Let's start with the two types of money.

In late 2008, there were two types of people who had huge debts and depreciating collateral. Both types accrued their debts through the subprime mortgage crisis. Homeowners with fixed mortgages sat on rapidly depreciating homes in neighborhoods rife with foreclosures. Once the music stopped, they couldn't borrow against their homes at all, but if they wanted to get credit through credit cards, the interest rate could be upwards of 30%. This is sad, but it's not inherently immoral. It's what happens in a typical financial panic. At the time, bankers also had depreciating assets - they owned subprime mortgage debt, and they had fixed obligations as well. But if they wanted to borrow, the Federal Reserve and the Treasury made sure that they could as much credit as they wanted, against whatever collateral they had, for basically nothing. For instance, the Fed accepted almost $500 billion of CCC rated junk as collateral in loans. In other words, if you had a suburban tract home in the Inland Empire with a mortgage and a home equity line of credit, you were out of luck. But if you owned the debt on the home equity line of credit on that same suburban tract home home, you could have easily gone to the discount window or one of the emergency lending facilities and gotten cash with basically no interest charged.

In Group One are millions of Americans. In Group Two are Goldman Sachs, Citigroup, and big American banks, European banks like Dexia, and a whole set of others who had access to the Fed, like the the Bank of Libya, and the wives of Wall Street titans (who had set up special purpose vehicles to take advantage of Fed lending). If you lost your job in 2009, too bad. If you had some savings at the bank or you are a retiree that relies on fixed income bonds, good luck getting more than 1% on your money. But if you were a hedge fund titan who realized that Bernanke had put a taxpayer guarantee against the entire banking system, you were swept up in high stock market returns from 2009-2010...Sometimes this was even explicit; Geithner created one program in 2009, called the Public-Private Investment Program. Under this program, investors would buy toxic assets, but the government would protect them against much of the downside risk with public funds. In a deal with Citigroup, the Federal Reserve and Treasury took a little less than $300 billion of downside risk on "ring-fenced" bad assets. Oddly, there was no list of the assets when the deal was drawn up, that list would be created later. This is the equivalent of telling a friend if he lends you $25,000 now and you don't pay him back, you'll give him some of your random stuff, whatever you have lying around, later...While these institutions were pleading with federal officials for bailouts, they were filling their coffers with campaign contributions and paying millions to swarm Capitol Hill to convince officials to bail them out.

AND THEN THE SHIT HIT THE FAN...READ ON AT LINK

[Demeter]

17. U.S. Offers PlatinumPlus Preferred Citizenship (TODAY ONION, TOMORROW, NYT)

http://www.theonion.com/articles/us-offers-platinumplus-preferred-citizenship,889/

In an 86-14 vote, the Senate approved legislation Monday establishing PlatinumPlus Preferred citizenship, an exciting new program offering special benefits and discounts to select members of the U.S. "By becoming a PlatinumPlus citizen, you join an exclusive club of elite Americans," said President Clinton, who signed the bill into law late Monday. "And as part of that club, you'll be eligible for many special benefits, including tax breaks, excusal from jury duty, and vacations at special PlatinumPlus Caribbean resorts, which are off-limits to ordinary, EconoBudget citizenry. It's our way of saying thank you to our best customers...And, of course," Clinton added, "there are never any annual fees."

PlatinumPlus citizens—selected according to a number of demographic factors, including age, race and socio-economic status—will enjoy a wide variety of other benefits, including immunity from speeding tickets; separate, no-wait lines at over 50,000 post-office locations nationwide; and wider, more comfortable window seating. After just one year in the club, members can also begin earning extra votes for elections. "Wouldn't you like to earn up to five bonus votes for the next presidential election?" said U.S. Rep. Roger Wicker (R-MS), a co-sponsor of the measure. "With your new PlatinumPlus citizenship, you can." According to Wicker, those at the highest level of the new program, or "Diamond Club" citizens, will enjoy additional rewards, including a pass good for acquittal from one crime (misdemeanor or felony), a no-interest credit line of up to $500,000 and, for able-bodied male PlatinumPlus members between ages 18 and 35, excusal from the draft should a foreign war arise.

Gordon Alarie, CEO of the Dallas-based Integrated Systems Management Group, was among the first to receive a PlatinumPlus citizenship offer in the mail. "As CEO and founder of a Fortune 500 corporation, I've contributed a great deal to the U.S. over the years," Alarie said. "It's nice to know that now, with the PlatinumPlus Preferred citizenship program, I'll finally start getting something back."

Rosalyn Murcheson Biddle, a Scarsdale, NY, art collector, was also extended an offer to join. "The PlatinumPlus-only express lanes on the highways are nice, and so are the unlimited drinks," Biddle said. "But what I really like is the program's Gold Circle Premium Health Care package, which gets me access to the finest medical care anywhere. It's nice to know that if I ever get too wrapped up in a car-phone conversation and hit another vehicle, emergency workers arriving on the scene will prioritize my injuries over those of any other people who may have been hurt." Added Biddle: "The free cancer inoculations are a nice plus, too."

Clinton stressed that those not eligible for PlatinumPlus citizenship will still enjoy the many benefits of regular U.S. citizenship, including one free vote in each election, a court-appointed attorney if arrested, and a number of fully guaranteed constitutional rights, including freedom of speech and the right to bear arms. "To our nation's EconoBudget citizens, I want to assure you that you will still get the same great service from your government that you always have," Clinton said. "The postal delivery, the voting, the Social Security checks—it's all still part of the basic citizenship package. And while, yes, a few certain special privileges will be off-limits to you, that should in no way make you feel like a second-class citizen. Remember, we are all Americans here, no matter how poorly or well we are treated."

[Tansy_Gold]

35. (Tapping Dylan on the shoulder) uh, honey. . .. . .

The picture, of course, but for those of you who have forgotten what it was like, go back and read that thread from November 2008. Really read it. The whole thing.





http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=7922946#7922951

In the end, all the Bush taxes will lapse and we are back to where we were 8 years ago.


His other cornerstones is to get us out of Iraq in 16 months, a green job economy and education.


Obama seems to have a knack for it. The young newbie is the most mature person in politics.



Astute observation, Mr. Ratigan. Others were making it almost three years ago. Where you been, kid?




Tansy Gold, who's been right here.

[Demeter]

48. None of which has happened

[Tansy_Gold]

52. Oh, but they were so sure!

And I was batshit crazy.



Tansy Gold, still batshit crazy

[Demeter]

54. You are no more BSC than I am

I wasn't informed enough to be sure of anything, but I figured you could take a Democrat as his word....but even before Inauguration, the writing suddenly appeared on the wall. And now, the Democratic Party brand is forever tainted by our new, 21st century version of Richard Milhous Nixon, with Predator Drone accessory pack.

[Tansy_Gold]

56. ROFLMAO --

You have NO IDEA how long it took me to figure out what "BSC" stood for! WAAAAY too long!

But you're correct -- and I was a Republican in the Nixon days, because I'd been raised by Republicans who revered Eisenhower and respected FDR (and adored Eleanor). None of them, by the way, remain GOP toda, with the exception of a couple of uncles and one warped cousin.

I knew then Nixon was a bad seed that would sprout and produce evil fruit for the GOP and the world in general. I'm afraid to speculate about Obama. ... .



TG, still BSC after all these years and lovin' it.

[Demeter]

61. That's all right, it's a lot earlier in the day where you are

I don't see a way out, nor even a light at the end of the tunnel. If the Elite start hurting, they will take it out on the 99% as usual, instead of altering the way they approach Reality. That would take a miracle, of the Saul, struck by lightning, type, over and over and over.

There's going to have to be a lot more pain before the 99% gets off their butts. And a lot more thinking it through. I suspect that if it weren't for OWS, the thinking would never get done.

[Tansy_Gold]

65. Well, you have to remember though, that

of the 99%, only about 10% are really hurting. There are various safety nets that have avoided massive and severe poverty of the kind that leads to real revolution. We still have probably 80% employment, and that covers a lot of people. It may be underemployment, but it's above famine.

What we have are media that hype the grotesque and gruesome for political advantage, and turn the reality into the unreality and vice versa. And all the while, the panem is abundant and the circem are delivered wirelessly and endlessly. There is not yet a real reason for the masses to revolt.

That's why i've had so little faith in OWS. Unless and until it draws MASSIVE crowds that can easily overwhelm the police and other authorities, it's going nowhere. A couple thousand camped in a park? That's nothing. When it gets to be 1,000,000 camped in Central Park or Grant Park, then it's on its way. But right now, nope.

But I'm still BSC.



TG

[Demeter]

68. It's more like 25% Minimum are Hurting

but they don't have direction or purpose.

The Tea Party was never going to give them that, either. TP was designed for obfuscation and bullying and terrorizing.

OWS, on the other hand, is working on both direction and purpose.

And TPTB had better be working overtime to see that it doesn't swell to 1 million in Central Park, because then it's time for me to take up knitting at the guillotine...

[Tansy_Gold]

78. 25% are hurting, but not hurting bad enough

Look at the (violent) revolutions elsewhere and in the past -- you need a huge portion of the population who have nothing left to lose.

The US has a percentage that are desperately poor, but they are pretty much marginalized and in isolated pockets. They are not a threat to TPTB because those extremely poor have always been there and are easily contained.

It's when that kind of desperate poverty, the poverty of 1930s Appalachia or 1950s Mississippi, reaches into the rest of the country. That hasn't happened. . . . yet. The people in the various incarnations of OWS are still marginally comfortable. They haven't lost everything.

They haven't lost hope. And when they lose hope, that's when they become dangerous to TPTB.

We are a long, long, long way from that at the moment. And TPTB know that.

[AnneD]

83. I always remember the line from Jerry McQuire...

Rene tell her son, "First class use to mean you got a better meal. Now it means you have a better life."

[xchrom]

18. US consumer spending Hard times

http://www.economist.com/blogs/dailychart/2011/10/us-consumer-spending

How the economic slowdown has changed consumer spending in America

AMERICANS are spending less on clothes and eating out and more on household fuel bills and healthcare, according to data from the Bureau of Labour Statistics. Between 2007 and 2010, average annual consumer spending per unit—defined as a family/shared household or single/financially independent person—fell by 3.1% to $48,109. Average prices over this period have risen by 5.2%, so real consumer spending has fallen by almost 8%. The recession and economic slowdown have reduced buying power and consumers are tightening their belts in many ways, though spending on women’s clothes (and belts) fares slightly better than men’s. There are some positive health effects to be gleaned from the data. Real spending on tobacco products fell by 23%, probably because the price of a nicotine fix has risen by 46% between 2007 and 2010. Similarly, people are spending more on fruit and vegetables (up by 9%) and less on sugar and sweets (down by 6.5%). During the good times of 2003-06 consumer spending rose by 8.2%. In that time, Americans boozed more and bought more cushions: spending on alcohol and household furnishings increased by 19% and 13% respectively. Contrast that with 2007-10 when spending on these items fell by over 16%.

[Demeter]

26. And they wonder why OWS?

[xchrom]

27. indeed. nt

[xchrom]

19. Reforming banks The wrong numbers

http://www.economist.com/blogs/buttonwood/2011/10/reforming-banks

ANDREW Haldane, the executive director for financial stability of the Bank of England, has given many excellent speeches but his latest effort is a must-read for anyone who wants to know how we got into this current financial mess.

The speech deals with "the flaw" that so confounded Alan Greenspan, how private sector investors failed to control risks in the banking sector. The problem was not that bank executives had no skin in the game; in 2006, the managers with the largest bank stakes were Dick Fuld of Lehman Brothers, Jimmy Cayne ar Bear Stearns, Stan O'Neal at Merrill Lynch, John Mack at Morgan Stanley and Angelo Mozilo at Countywide. All lost substantial chunks of their wealth as share prices collapsed.

The fundamental problem is that tax rules (the deductibility of interest) and regulations encouraged banks to gear up their balance sheets. Effective control of the banks, however, rested with the shareholders. As Haldane puts it

Ownership and control rights are vested in agents comprising less than 5% of the balance sheet.

Thanks to limited liability, the losses of these shareholders are also constrained. In the early 19th century, liability was unlimited, prompting banks to run with much more conservative balance sheets. But that was deemed to deprive industry of much-needed capital so limited liability was brought in.

[Demeter]

20. Cash injection talks for UK nuclear plans

German consortium in talks over extra €5bn funding in exchange for a 25 per cent stake in ambitions to build a new generation of reactors

Read more >>
http://link.ft.com/r/ZE9K33/97DLVU/FDFZE/WTH80P/ZGV961/B7/t?a1=2011&a2=10&a3=26

IF GERMANY DOESN'T WANT NUKES AT HOME, THEY SHOULDN'T BE BUILDING THEM ABROAD, EITHER. IT'S NOT LIKE RADIATION RESPECTS BOUNDARIES.

[Demeter]

21. UBS defies bonus slashing in wake of scandal

Third-quarter results buoyed by one-off gains, reducing impact of trading scandal

Read more >>
http://link.ft.com/r/ZE9K33/97DLVU/FDFZE/WTH80P/B5YHX7/B7/t?a1=2011&a2=10&a3=26

[Po_d Mainiac]

22. A simple (humorous) look at bank derivatives

A Banking Primer: Understanding ‘Derivatives’
Heidi is the proprietor of a bar in Detroit. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.

To solve this problem, she comes up with a new marketing strategy that allows her customers to drink now and pay later; keeping track of the drinks consumed on a ledger (thereby granting the customers ‘loans’).
Word gets around about Heidi’s “drink now, pay later” marketing plan and, as a result, increasing numbers of customers flood into her bar. Soon she has the largest sales volume for any bar in Detroit.

snip

Fortunately though, the bank, the brokerage houses and their respective executives are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from the United States federal government.:grr:

<more at link>

http://club.ino.com/trading/2011/10/a-simple-humorous-look-at-bank-derivatives/

[Tansy_Gold]

43. Read it, folks, and the comments that follow. It's good. n/t

[xchrom]

23. There Are Only 2 Ways to Save the Economy: Innovation or Inflation

http://www.theatlantic.com/business/archive/2011/10/there-are-only-2-ways-to-save-the-economy-innovation-or-inflation/247168/

We have only two ways out of our current global economic mess: innovation and inflation. And as the saying goes, we should hope for the best (more innovation) and prepare for the worst (higher inflation).

Looking across the world, the underlying problem is that borrowers--households and governments--have taken on debt that they can't afford to pay back, given the current rate of income and economic growth. In the U.S, too many homeowners are struggling with mortgages that far exceed the value of their homes and cannot be repaid from their current incomes. In Europe, Greece and perhaps other countries have issued bonds that they cannot pay back unless growth unexpectedly skyrockets.

Down the road the same principle of matching growth to debt allows us to perceive potential financial crises to come. Young male college graduates, for example, have seen their real earnings plunge by 19% since 2000, with young female college grads experiencing a similar decline. Meanwhile education borrowing has soared, suggesting that we are on the verge of a student loan crisis, where young grads simply cannot pay back their mountain of debt.

It's not easy to explain why lenders overestimated the ability of debtors to pay. Or, rather, there are too many explanations. Some believe that complicated financial instruments obscured the true amount of debt, as in the case of the U.S. financial crisis. Others think that greedy financiers expected to be bailed out, or worse, simply didn't care. In Greece, the official numbers understated the budget deficits for many years.

[Demeter]

29. No, Prosecution and Regulation

Those are what a government does, or should be doing. If government does its job, the economic players will do theirs.

[xchrom]

34. yeah -- i went to the progressive policy website --

looks like -- but i can't be sure -- where the Rubinites landed.

[Tansy_Gold]

36. Yeah, it says nothing about the banks betting against their clients

And we all know banks have nothing to do with the economy. . . . .:sarcasm:

[xchrom]

37. no. not a damn thing. zip. zero. zilch. nada.

:evilgrin:

[Po_d Mainiac]

67. Yup, under a 'Constitutional Republic'

which we are supposed to be. The key work is 'supposed':banghead:

[Demeter]

24. Shake-up for Indian banks as savings rates are set free

Reserve Bank of India head says higher interest will encourage saving and greater financial inclusion in country

Read more >>
http://link.ft.com/r/ZE9K33/97DLVU/FDFZE/WTH80P/R3HW1P/B7/t?a1=2011&a2=10&a3=26

[Demeter]

25. Scottish gold mine receives approval

Members of the Loch Lomond National Park’s board say the opportunities for new jobs and economic growth outweigh concerns about the environment

Read more >>
http://link.ft.com/r/ZE9K33/97DLVU/FDFZE/WTH80P/FK96Y5/B7/t?a1=2011&a2=10&a3=26

OH, YOU TAKE THE HIGH ROAD, AND I'LL TAKE THE LOW ROAD...

http://www.youtube.com/watch?v=1uZ-p-tN8Gs

[Demeter]

31. Fears euro summit could miss final deal

Eurozone leaders are struggling to reach agreement on a much-anticipated deal to reverse their spiralling debt crisis

Read more >>
http://link.ft.com/r/QM42II/VLOYJJ/XBAN6/DWWMMC/OR1MFM/1G/t?a1=2011&a2=10&a3=26

[Demeter]

32. Italian government on brink of collapse

Silvio Berlusconi’s centre-right coalition government appears in danger of collapsing over EU demands for economic reform

Read more >>
http://link.ft.com/r/QM42II/VLOYJJ/XBAN6/DWWMMC/QNT43Q/1G/t?a1=2011&a2=10&a3=26

[Demeter]

49. Jean Pisani-Ferry: Europe’s leaders must start making tough decisions

----------


Days and nights, Europe’s leaders have discussed the minutiae of private-sector involvement in the Greek debt restructuring. They have immersed themselves in financial engineering with the aim of leveraging the European financial stability facility.

This is all necessary, but it’s the job of finance ministers or Treasury officials. What citizens and markets alike expect from the heads of state and government is that they do the job for which they are indispensable, and map out the political choices Europe is now screaming for.

Read more >>
http://link.ft.com/r/YIQXNN/R3BXWX/A5Q0X/TUUNNN/7AWHIO/36/t?a1=2011&a2=10&a3=26

[xchrom]

40. Ford 3Q profit falls 2 pct to $1.6 billion

http://hosted.ap.org/dynamic/stories/U/US_EARNS_FORD?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-10-26-08-09-14

DETROIT (AP) -- Ford Motor Co.'s third quarter profit dropped slightly as the company took a charge for hedging on commodities. But sales rose and the result beat Wall Street's forecasts.

Ford said Wednesday it earned $1.6 billion in the third quarter, down 2 percent from a year ago. Ford's earnings amounted to 41 cents per share. That compares with earnings of 43 cents per share in the July-September period a year ago.

Ford took a $350 million non-cash charge to reflect falling prices of some commodities like copper and aluminum. Copper prices fell 25 percent in September alone, Ford said. Ford said the charges could reverse if commodity prices rise in the future.

Without one-time items, including personnel reductions and continuing dealer payments and other costs for last year's closure of the Mercury brand, Ford earned 46 cents per share. That beat Wall Street's expectations. Analysts polled by FactSet forecast earnings of 45 cents per share.



***i'm too old -- big business taking hedges on commodities -- i suppose that's ok -- but how does any one ever figure a balance sheet w/ stuff like that going on?

[DemReadingDU]

44. Gupta Surrenders to Authorities to Face Insider Trading Charges

10/26/11 Gupta Surrenders to Authorities to Face Insider Trading Charges

Rajat K. Gupta, a former Goldman Sachs director and McKinsey & Company chief executive, surrendered to the Federal Bureau of Investigation on Wednesday morning to face charges of insider trading, the latest development in the government's multiyear crackdown on illegal activity on Wall Street.

In charging Mr. Gupta, the government will tie up one of the biggest loose ends resulting from the investigation into the Galleon Group, which began nearly five years ago at the Securities and Exchange Commission. Since then, more than two dozen people have pleaded guilty or been convicted of swapping illegal tips around company earnings and other major corporate events. Raj Rajaratnam, the Galleon co-founder, was sentenced to 11 years in prison this month for making tens of millions of dollars by trading on confidential tips.

Authorities have broadly pursued insider trading on Wall Street, exacting guilty pleas from a chemist at the Federal Drug Administration, among others, as recently as this month. While the majority of those charged have been traders and analysts on Wall Street, Mr. Gupta, 62, is the first to be implicated from the upper echelons of corporate America.

The charges are a stunning reversal of fortunes for Mr. Gupta. A native of India, he graduated from Harvard Business School and had a global profile as an adviser to some of the nation's most iconic companies. He served as a director at Goldman, Procter & Gamble and the parent company of American Airlines. In addition to his professional pedigree, Mr. Gupta was a noted philanthropist, serving in coveted posts with the Bill and Melinda Gates Foundation.

Mr. Gupta's case has been a tricky one for the government. Though his name came up repeatedly at Mr. Rajaratnam's trial, both in testimony and in secretly recorded phone conversations, the Justice Department never filed charges against him. The S.E.C. filed an administrative action against Mr. Gupta, and he countersued. The agency later dropped the civil proceedings, but reserved the right to refile the case.

On Wednesday, the S.E.C. refiled their civil action against Mr. Gupta.

more...
http://finance.yahoo.com/news/Gupta-Surrenders-to-nytimes-800495763.html?x=0&sec=topStories&pos=7&asset=&ccode=&sec=topStories&pos=main&asset=&ccode=

[Demeter]

53. New Obama Foreclosure Plan Helps Banks At Taxpayers' Expense

http://www.huffingtonpost.com/2011/10/24/foreclosure-plan-obama-harp-refinancing_n_1028554.html

The Obama administration is introducing a new program on Monday designed to lower monthly mortgage payments for more troubled homeowners. But a key new condition in the plan would shift the financial liability for refinanced loans from Wall Street banks to the American taxpayer. And by focusing on lower payments, the program does not confront what housing experts view as the core problem in the foreclosure crisis -- borrower debt that exceeds the value of one's home. Faced with the weak response to the Home Affordable Refinance Program, the Obama administration is planning to open up the program to all borrowers who owe more on their mortgage than their homes' worth, commonly dubbed being underwater, and have not missed a mortgage payment. HARP had been limited to borrowers who owed up to 25 percent more than their home is worth. More than 22 percent of all home mortgages -- or 10.9 million homes -- are currently underwater, according to CoreLogic data. Fewer than 900,000 borrowers have elected to go through HARP to date. The revised program also eliminates several fees associated with refinancing that can make the decision to refinance uneconomical for borrowers. But the potential benefit of the eliminated fees could be relatively small: If a few thousand dollars worth of fees made refinancing a bad deal for underwater borrowers, the ultimate benefits that refinancing can pose would remain limited...


The newly expanded program would expunge legal liabilities associated with mortgages refinanced through the program for the original lenders of the mortgages. Each time a bank sent a loan to Fannie and Freddie, it certified that the loan met Fannie and Freddie's safe lending criteria. But many loans sent to the mortgage giants did not, in fact, meet those criteria. Currently, when borrowers default on those ineligible loans, the mortgage giants can "put back" the resulting losses onto the banks that pushed the loans. Under the modified plan, "put back" liability at banks will be erased for any underwater mortgage that is refinanced through HARP, eliminating Fannie and Freddie's ability to sack lenders with losses in the event that the mortgage does not pan out. If borrowers go through HARP, but decide after several months that the modest monthly savings do not outweigh owing tens of thousands of dollars more than their home is worth, taxpayer-owned Fannie and Freddie will have to take the full loss. Even if the original loan was sent to Fannie and Freddie with false or fraudulent guarantees from the bank -- promises that may directly be tied to the borrower's current financial problems -- banks will be immune from liability. Fannie and Freddie plan to charge banks "a modest fee" to extinguish this liability, but the administration has yet to determine what that fee will be.

While the revised program seeks to lower mortgage payments for underwater homeowners, the program does nothing to address the core problem -- owing more than the home is worth. Though borrowers may save hundreds of dollars a month in lower payments by refinancing, they routinely owe tens of thousands of dollars more than their homes are worth, even after receiving aid. "In most cases people would probably be better off walking," said economist Dean Baker, co-director of the Center for Economic Policy and Research.

...The Home Affordable Modification Program has been a hotbed for the kind of borrower abuses that the administration is pressuring lenders to settle over.


TALK ABOUT PIGSHIT IN A POKE! OFF WITH ALL THEIR HEADS!

[Demeter]

57. As Wall Street’s Universe Collapses By Lisa Pease

HASN'T COLLAPSED YET....STILL SOME TAX MONEY IN THE NATIONAL CASH BOXES.

http://consortiumnews.com/2011/10/24/as-wall-streets-universe-collapses/

Wall Street has created a “moral” universe that elevates short-term profits into the ultimate “good,” rewarding those who can achieve them with massive bonuses. The movie Margin Call follows these players when their universe collapses...What would you do if you had knowledge of an imminent catastrophe that you had no power to stop? That was the question that inspired the new film “Margin Call” from writer/director J.C. Chandor. Based on the financial crisis of 2008, the film is a tightly paced, highly suspenseful look at the first 36 hours of a meltdown from the viewpoint of a few key people in a Lehman Brothers-like investment firm. The damage has already been done, and there’s no way to reverse it. The characters are faced with Hobson’s choices that leave little room for moral concerns...Here are a group of people who have uncritically bought into a way-of-life destined for failure, and suddenly that failure is upon them. How will they deal? What will they do? What can they do? During the course of the escalating-by-the-minute meltdown they are facing, each character finds out, in his or her own way, what they are — and are not — made of.

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

I think we all want to better understand what happened. How could the system get so broken so quickly? In that sense, the movie offers little direct information. This is not history or documentary. What this is, however, is sheer drama. I truly felt glued to the screen. My thoughts never wandered, a rarity in the movie theater these days. I really wanted to know, at every second, what would happen next. Of course, we all know what happens, eventually. But watching these people in this moment was incredibly compelling...I felt it was an accurate depiction of the mindset not only within that community but many others. Choices are made based on what’s profitable today or tomorrow and rarely with an eye to what will be best in the long-term. After viewing the film, I was reminded of Jared Diamond’s book Collapse, in which he demonstrates that short-term thinking and, particularly, cultures in which the elite separate themselves too far from the working class, lead inevitably to disaster and collapse of any given society.

The real issue is not how to deal with crises as they arise, but to see them coming and change course early enough to entirely avert them. When the elite are more closely tied to the workers, they feel the pain sooner and make appropriate course corrections. The further, however, the elite get from the workers, the more insulated they are, preventing them from seeing genuine problems until it’s too late to solve them....And the choices are the same at the personal level. By pursuing a certain way- of-life, are we alienating those we’re going to need later? By accumulating money, are we guaranteeing our future happiness? What else should we be pursuing?

“Margin Call” may infuriate you all over again, but it will also remind you of how important our current decisions are now. We still have lots of time to prevent future crises, if we look a little further down the road and give up some short-term wants for some longer-term needs.

[Demeter]

58. 2012 and the Coming Financial Crises Written by Gail Tverberg

http://oilprice.com/Finance/Economy/2012-and-the-Coming-Financial-Crises.html

A UNIVERSE OF DATA AND SPECULATION UPON IT, TOO MUCH TO SUMMARIZE OR EXCERPT. SEE THE LINK.

[Demeter]

60. Immunity and Impunity in Elite America By Glenn Greenwald

http://www.tomdispatch.com/post/175458/tomgram:_glenn_greenwald,_how_the_rich_subverted_the_legal_system/

How the Legal System Was Deep-Sixed and Occupy Wall Street Swept the Land

...It’s not that Americans suddenly woke up one day and decided that substantial income and wealth inequality are themselves unfair or intolerable. What changed was the perception of how that wealth was gotten and so of the ensuing inequality as legitimate. Many Americans who once accepted or even cheered such inequality now see the gains of the richest as ill-gotten, as undeserved, as cheating. Most of all, the legal system that once served as the legitimizing anchor for outcome inequality, the rule of law -- that most basic of American ideals, that a common set of rules are equally applied to all -- has now become irrevocably corrupted and is seen as such.

While the Founders accepted outcome inequality, they emphasized -- over and over -- that its legitimacy hinged on subjecting everyone to the law’s mandates on an equal basis. Jefferson wrote that the essence of America would be that “the poorest laborer stood on equal ground with the wealthiest millionaire, and generally on a more favored one whenever their rights seem to jar.” Benjamin Franklin warned that creating a privileged legal class would produce “total separation of affections, interests, political obligations, and all manner of connections” between rulers and those they ruled. Tom Paine repeatedly railed against “counterfeit nobles,” those whose superior status was grounded not in merit but in unearned legal privilege. After all, one of their principal grievances against the British King was his power to exempt his cronies from legal obligations. Almost every Founder repeatedly warned that a failure to apply the law equally to the politically powerful and the rich would ensure a warped and unjust society. In many ways, that was their definition of tyranny.

Americans understand this implicitly. If you watch a competition among sprinters, you can accept that whoever crosses the finish line first is the superior runner. But only if all the competitors are bound by the same rules: everyone begins at the same starting line, is penalized for invading the lane of another runner, is barred from making physical contact or using performance-enhancing substances, and so on...If some of the runners start ahead of others and have relationships with the judges that enable them to receive dispensation for violating the rules as they wish, then viewers understand that the outcome can no longer be considered legitimate. Once the process is seen as not only unfair but utterly corrupted, once it’s obvious that a common set of rules no longer binds all the competitors, the winner will be resented, not heralded.

That catches the mood of America in 2011. It may not explain the Occupy Wall Street movement, but it helps explain why it has spread like wildfire and why so many Americans seem instantly to accept and support it. As was not true in recent decades, the American relationship with wealth inequality is in a state of rapid transformation...If you were to assess the state of the union in 2011, you might sum it up this way: rather than being subjected to the rule of law, the nation’s most powerful oligarchs control the law and are so exempt from it; and increasing numbers of Americans understand that and are outraged. At exactly the same time that the nation’s elites enjoy legal immunity even for egregious crimes, ordinary Americans are being subjected to the world's largest and one of its harshest penal states, under which they are unable to secure competent legal counsel and are harshly punished with lengthy prison terms for even trivial infractions.

SO MUCH MORE AT LINK, A GOOD SUMMARY AND ANALYSIS

[Demeter]

64. Moisés Naím - Take note, America, the public is angry

The long, peaceful coexistence with income and wealth inequality is ending. Americans are now infuriated by the fact that chief executives at some of the nation’s largest companies earned around 340 times more than a typical American worker.

Read more >>
http://link.ft.com/r/BLH300/97DHJT/3CWTA/086BBV/L935MF/VU/t?a1=2011&a2=10&a3=26

[xchrom]

69. ...

:mad: indeed.

[Hotler]

73. Here let me help.

:mad: :argh: :grr: :banghead:

[Hotler]

59. k&r n/t

[Demeter]

62. I Have To Apologize to All Weekender Visitors!

For some unfathomable reason I neglected to report on bank failures the past TWO weekends. I guess that's what having something like a social life does to one's dedication. Or Alzheimers.

SO: here it is, 8 (count 'em, 8) banks in two weeks gone to dust. FDIC must have gotten some money in the new budget started this month:


Piedmont Community Bank, Gray, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank and Trust Company, Macon, Georgia, to assume all of the deposits of Piedmont Community Bank.

The two branches of Piedmont Community Bank will reopen on Saturday as branches of State Bank and Trust Company...As of June 30, 2011, Piedmont Community Bank had approximately $201.7 million in total assets and $181.4 million in total deposits. In addition to assuming all of the deposits of the failed bank, State Bank and Trust Company agreed to purchase essentially all of the assets...The FDIC and State Bank and Trust Company entered into a loss-share transaction on $163.2 million of Piedmont Community Bank's assets. State Bank and Trust Company will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $71.6 million. Compared to other alternatives, State Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. Piedmont Community Bank is the 77th FDIC-insured institution to fail in the nation this year, and the twentieth in Georgia. The last FDIC-insured institution closed in the state was CreekSide Bank, Woodstock, on September 2, 2011.


Blue Ridge Savings Bank, Inc., Asheville, North Carolina, was closed today by the North Carolina Office of Commissioner of Banks, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank of North Carolina, Thomasville, North Carolina, to assume all of the deposits of Blue Ridge Savings Bank, Inc.

The ten branches of Blue Ridge Savings Bank, Inc. will reopen on Monday as branches of Bank of North Carolina...As of June 30, 2011, Blue Ridge Savings Bank, Inc. had approximately $161.0 million in total assets and $158.7 million in total deposits. In addition to assuming all of the deposits of the failed bank, Bank of North Carolina agreed to purchase essentially all of the assets...The FDIC and Bank of North Carolina entered into a loss-share transaction on $143.2 million of Blue Ridge Savings Bank, Inc.'s assets. The Bank of North Carolina will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $38.0 million. Compared to other alternatives, Bank of North Carolina's acquisition was the least costly resolution for the FDIC's DIF. Blue Ridge Savings Bank, Inc. is the 78th FDIC-insured institution to fail in the nation this year, and the second in North Carolina. The last FDIC-insured institution closed in the state was The Bank of Asheville, Asheville, on January 21, 2011.


First State Bank, Cranford, New Jersey, was closed today by the New Jersey Department of Banking and Insurance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Northfield Bank, Staten Island, New York, to assume all of the deposits of First State Bank.

The two branches of First State Bank will reopen on Saturday as branches of Northfield Bank...As of June 30, 2011, First State Bank had approximately $204.4 million in total assets and $201.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Northfield Bank agreed to purchase essentially all of the assets...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $45.8 million. Compared to other alternatives, Northfield Bank's acquisition was the least costly resolution for the FDIC's DIF. First State Bank is the 79th FDIC-insured institution to fail in the nation this year, and the first in New Jersey. The last FDIC-insured institution closed in the state was ISN Bank, Cherry Hill, on September 17, 2010.


Country Bank, Aledo, Illinois, was closed today by the Illinois Department of Financial and Professional Regulation – Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Blackhawk Bank & Trust, Milan, Illinois, to assume all of the deposits of Country Bank.

The two branches of Country Bank will reopen on Saturday as branches of Blackhawk Bank & Trust...As of June 30, 2011, Country Bank had approximately $190.6 million in total assets and $167.5 million in total deposits. In addition to assuming all of the deposits, Blackhawk Bank & Trust agreed to purchase approximately $113.3 million of the failed bank's assets. The FDIC will retain the remaining assets for later disposition...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $66.3 million. Compared to other alternatives, Blackhawk Bank & Trust's acquisition was the least costly resolution for the FDIC's DIF. Country Bank is the 80th FDIC-insured institution to fail in the nation this year, and the eighth in Illinois. The last FDIC-insured institution closed in the state was First Choice Bank, Geneva, on August 19, 2011.


Old Harbor Bank, Clearwater, Florida, was closed today by the Florida Office of Financial Regulation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with 1st United Bank, Boca Raton, Florida, to assume all of the deposits of Old Harbor Bank.

The seven branches of Old Harbor Bank will reopen during their normal business hours beginning Saturday as branches of 1st United Bank...As of June 30, 2011, Old Harbor Bank had approximately $215.9 million in total assets and $217.8 million in total deposits. In addition to assuming all of the deposits of the failed bank, 1st United Bank agreed to purchase essentially all of the assets.

The FDIC and 1st United Bank entered into a loss-share transaction on $155.6 million of Old Harbor Bank's assets. 1st United Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $39.3 million. Compared to other alternatives, 1st United Bank's acquisition was the least costly resolution for the FDIC's DIF. Old Harbor Bank is the 81st FDIC-insured institution to fail in the nation this year, and the twelfth in Florida. The last FDIC-insured institution closed in the state was The First National Bank of Florida, Milton, on September 9, 2011.


Decatur First Bank, Decatur, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Fidelity Bank, Atlanta, Georgia, to assume all of the deposits of Decatur First Bank.

The five branches of Decatur First Bank will reopen during their normal business hours beginning Saturday as branches of Fidelity Bank...As of June 30, 2011, Decatur First Bank had approximately $191.5 million in total assets and $179.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, Fidelity Bank agreed to purchase essentially all of the assets.

The FDIC and Fidelity Bank entered into a loss-share transaction on $111.5 million of Decatur First Bank's assets. Fidelity Bank will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $32.6 million. Compared to other alternatives, Fidelity Bank's acquisition was the least costly resolution for the FDIC's DIF. Decatur First Bank is the 82nd FDIC-insured institution to fail in the nation this year, and the twenty-first in Georgia. The last FDIC-insured institution closed in the state was Piedmont Community Bank, Gray, on October 14, 2011.


Community Capital Bank, Jonesboro, Georgia, was closed today by the Georgia Department of Banking and Finance, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank and Trust Company, Macon, Georgia, to assume all of the deposits of Community Capital Bank.

The two branches of Community Capital Bank will reopen during their normal business hours beginning Saturday as branches of State Bank and Trust Company...As of June 30, 2011, Community Capital Bank had approximately $181.2 million in total assets and $166.2 million in total deposits. In addition to assuming all of the deposits of the failed bank, State Bank and Trust Company agreed to purchase essentially all of the assets.

The FDIC and State Bank and Trust Company entered into a loss-share transaction on $141.3 million of Community Capital Bank's assets. State Bank and Trust Company will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $62.0 million. Compared to other alternatives, State Bank and Trust Company's acquisition was the least costly resolution for the FDIC's DIF. Community Capital Bank is the 83rd FDIC-insured institution to fail in the nation this year, and the twenty-second in Georgia. The last FDIC-insured institution closed in the state was Decatur First Bank, Decatur, earlier today.

GET A LOAD OF THIS ONE!

The Federal Deposit Insurance Corporation (FDIC) today was appointed receiver for Community Banks of Colorado, Greenwood, Colorado, by the Board of Governors of the Federal Reserve System. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Bank Midwest, National Association, Kansas City, Missouri, to assume all of the deposits of Community Banks of Colorado.

The 40 branches of Community Banks of Colorado will reopen during their normal business hours beginning Saturday as branches of Bank Midwest, National Association. Depositors of Community Banks of Colorado will automatically become depositors of Bank Midwest, National Association...As of June 30, 2011, Community Banks of Colorado had approximately $1.38 billion in total assets and $1.33 billion in total deposits. In addition to assuming all of the deposits of the failed bank, Bank Midwest, National Association agreed to purchase essentially all of the assets.

The FDIC and Bank Midwest, National Association entered into a loss-share transaction on $714.2 million of Community Banks of Colorado's assets. Bank Midwest, National Association will share in the losses on the asset pools covered under the loss-share agreement...The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $224.9 million. Compared to other alternatives, Bank Midwest, National Association's acquisition was the least costly resolution for the FDIC's DIF. Community Banks of Colorado is the 84th FDIC-insured institution to fail in the nation this year, and the sixth in Colorado. The last FDIC-insured institution in the state for which the FDIC was named receiver was Bank of Choice, Greeley, on July 22, 2011.

[Demeter]

63. GRAND TOTAL LOSS FOR THE NATION $580.5M

in two weeks, people. Two weeks.

[DemReadingDU]

74. and where was I for 2 weeks!

that I didn't notice this slight oversight in the weekend edition
:eyes:

[AnneD]

86. But, it's onlt a flesh wound....

I can still fight....

The amount of red ink hemmoraging from FDIC account is amazing. But the most amazing part of the story Demeter, there are still banks in Georgia.

[Demeter]

89. Very True

Like the way it was in Detroit in the 60's, 4 gas stations at every major intersection....

except in Georgia, it was banks.

[Hotler]

71. Community Banks of Colorado. Hmmmmmm

Silverado Savings & loan scandal, HUD scandal, Bank failures and scandals are nothing new here in Denver. When the Savings & Loan scandal went down it cost the tax payer $500 billion. Who was pres then, poppy Bush. Who was one of the head cheese at Silverardo Savings & Loan, Neil Bush. Who was pres in 2007-08 when the bottom fell out on Wall St. Shrub. Google the savings and loan and HUD scandals here in Denver and have a good read. Things that make you go hmmmm.

[Tansy_Gold]

79. I spent nine enlightening months working for the RTC

at Lincoln Savings after Charlie Keating hollowed it out. You and I, Hotler, could swap some good stories.

If you're ever in Arizona. . . ..

:hi:

[Hotler]

96. Tansy, know anything about Schuff Steel down there?

I have been knocking on there HR door trying to find a job. They are one of the biggest steel fabricators in the country. Thanks

[Tansy_Gold]

99. Nope, not a thing.

Jobing.com says they've got an opening for a CNC Programmer.

[hamerfan]

82. Go Georgia! n/t

[xchrom]

70. asia: China minimum wage up by 21.7% despite economic cooling

http://www.bbc.co.uk/news/business-15456509

Labour costs are rising in China, with official figures showing minimum wages have grown by more than a fifth.

The average minimum wage in most of the country rose by 21.7% at the end of September, the Ministry of Human Resources and Social Security said.

This comes despite a broader economic slowdown engineered by Beijing to bring down inflation.

Rising costs may mean China will lose its edge as one of the world's cheapest manufacturing centres.

[Demeter]

76. Personally, I Think the Fault Lies in Our Stars The Onion Horrorscope

Aries

This week you'll prove that one man can make a difference when you smear bacon grease all over the stairs and escalators at the malls closest to the retirement home.

Taurus

Trouble rears its ugly head in the workplace when, simply put, they just up and fire everybody.

Gemini

Sorry to tell you this, but there's no such thing as "plus-sized" deodorant soap. Just use as much regular soap as you need to wash your enormous frame.

Cancer

Yes, you have a powerful thirst, but you won't relieve it by repeatedly drinking whiskey. In fact, that will actually dehydrate you further.

Leo

The doctors will be polite and professional when discussing your condition, but they'll joke about it later in the lounge before going home to stare at the ceiling, unable to sleep from thinking about it.

Virgo

There will be no changes of note in your life this week, which is surprising considering how easy it should be to get a bear trap off your head these days.

Libra

There aren't many people out there who can have so much sex without enjoying themselves in the least, but you always knew you were special.

Scorpio

You'll try to play both sides against each other for personal gain, proving again why you are the worst chess player ever.

Sagittarius

Your love for The Wizard Of Oz will actually come in handy when you're involved in a multiple-tractor-trailer pileup, but not for the reasons you'd think.

Capricorn

Strange, it seemed like having a harpoon gun around would be kind of cool, but every time you've used the damn thing it just leads to a lot of flensing work.

Aquarius

Usually, compromise means no one is happy.  The Missouri Compromise, however, is a great name for the mullet, a hairstyle that makes everyone happy.

Pisces

It's never too late to change your life for the better, except of course in your case, where it's almost too late to finish your poisoned coffee.

[Demeter]

77. I've been up to the navel in bleach all morning--bacon grease?

I'm not sure I even know where the mall is, anymore....

Time to go wreak havoc. See you all later!

[Fuddnik]

80. I should have been an Aries,

It sounds like fun.

[Demeter]

91. As a Dyed in the wool Aries, Let Me Assure You

I am NOT having fun, not since the age of 10.

[Ghost Dog]

81. I'm Leo.

It was when I sussed that my doctors ('therapists') didn't even have a lounge, nor anywhere else they would meet to joke or otherwise swap notes, inform each other of what they had learned about their 'clients' during the day, that I decided to make a run for freedom.

Now 'freedom' tastes like shit. Without the woman I love but I hurt due to my weakness.

[AnneD]

87. I am a Virgo.....

the bear trap is most appropriate. Thanks for the laugh. Grease huh......

[Demeter]

92. How did you get that bear trap on your head, though?

[AnneD]

100. I was following my own advice....

Happy hunting and watch out for the bears.....

[Tansy_Gold]

88. Libra here

And sadly, too true.

[Ghost Dog]

84. Merkel wins rescue fund vote after raising spectre of war

Angela Merkel, the German Chancellor, won a parliamentary vote of support for boosting the firepower of the bailout fund after raising the spectre of war in a speech in the Bundestag.
Merkel wins rescue fund vote after raising spectre of war

By Telegraph Staff and agencies

4:23PM BST 26 Oct 2011

Comments36 Comments

She told MPs: "Nobody should take for granted another 50 years of peace and prosperity in Europe ... that's why I say: If the euro fails, Europe fails.

"We have a historical obligation: To protect by all means Europe's unification process begun by our forefathers after centuries of hatred and blood spill. None of us can foresee what the consequences would be if we were to fail."

/... http://www.telegraph.co.uk/finance/financialcrisis/8850969/Merkel-wins-rescue-fund-vote-after-raising-spectre-of-war.html


Thank you Germany

By Ambrose Evans-Pritchard Economics Last updated: October 26th, 2011

272 Comments Comment on this article

Alone among EU leaders, Chancellor Angela Merkel goes to tonight’s summit in Brussels with an iron-clad mandate. It is a remarkable moment. Never before – to my knowledge – has a national parliament demanded and held a prior vote on an EU summit accord.

Had this principle been established a long time ago, we might have avoided much of the relentless Treaty creep and EU aggrandizement advanced by secret deals at the Bâtiment Justus Lipsius. Thank you Germany.

Thank you too, judges of the Verfassungsgericht, for giving the Bundestag a veto on EU encroachments on fiscal sovereignty. The court is seemingly the only tribunal willing and able to defend the liberties of European citizens against EU over-reach, and is therefore my supreme court too even as a British citizen.

Dr Merkel has won her vote. She secured an "own majority" for proposals to leverage the €440bn bail-out fund (EFSF) into the stratosphere, with the support of some very sheepish looking law-makers from posturing Free Democrats and Bavaria’s Social Christians.

/... http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100012823/thank-you-germany/

[Ghost Dog]

85. Eurozone aims to ramp up rescue fund, details deferred

BRUSSELS/ROME | Wed Oct 26, 2011 8:53pm BST

(Reuters) - Euro zone leaders intend to multiply the capacity of their rescue fund around fourfold to one trillion euros but details of how they plan to draw a line under Europe's worsening debt crisis will not be nailed until next month, sources said.

A draft statement from an emergency summit on Wednesday, obtained by Reuters, said two options were being considered to leverage the 440 billion euro (383 billion pound) fund designed to shore up heavily indebted states and thwart market attacks.

If the draft is adopted with little change, the second euro zone summit in four days will have sketched broad intentions but failed to produce a detailed masterplan to scale up the fund, recapitalise banks and reduce Greek debt to a sustainable level, despite Franco-German assurances a "comprehensive solution" would be found.

One proposal involves creating a special purpose investment vehicle (SPIV) to tap foreign sovereign and private investors, such as Chinese and Middle Eastern wealth funds, to buy bonds of troubled euro zone countries.

The other method for scaling up the European Financial Stability Facility involves using it to offer partial guarantees to purchasers of new euro zone debt. The two options could be used simultaneously and the International Monetary Fund could also help.

Euro zone finance ministers will be asked to finalise the terms and conditions in November, the statement said. An EU source said the EFSF was expected to be leveraged by something like a factor of four giving it scope of around 1 trillion euros.

/... http://uk.reuters.com/article/2011/10/26/uk-eurozone-idUKTRE79I0J920111026

[Demeter]

93. Okay, Merkel Officially Jumped the Shark There

Unless the Muslim hordes revolt due to the unrelenting bigotry of the ancient native-born, Europe isn't going to war...

[Ghost Dog]

94. Oh, just your average native European tribes

could give us all one hell of a surprise

just about any time, right now.

I don't like to repèat the gist of some of the comments I'm hearing here in Spain... for example.

[Demeter]

97. With What Army?

and what matériel? Everybody's in NATO, for starters.

[Roland99]

98. Let's Make A (Euro) Deal

http://www.zerohedge.com/news/we-have-deal


EU OFFICIAL SAYS DEAL REACHED ON GREEK DEBT-CUTTING PLAN: AP
'PRIVATE CREDITORS TO TAKE 50% CUT ON GREEK BONDS, AP SAYS
EU official, who wished to remain anonymous, tells Bloomberg that euro-area leaders are set to approve accord for 50% writedown on Greek bonds