STOCK MARKET WATCH, Friday March 20

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday March 20, 2009

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

AT THE CLOSING BELL ON March 19, 2009

Dow... 7,400.80 -85.78 (-1.15%)
Nasdaq... 1,483.48 -7.74 (-0.52%)
S&P 500... 784.04 -10.31 (-1.30%)
Gold future... 958.80 +69.70 (+7.84%)
30-Year Bond 3.61% +0.04 (+1.12%)
10-Yr Bond... 2.60% +0.06 (+2.53%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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Read more: du

[ozymandius]

1. Market WrapUp

In Search of a Higher High
BY MARTIN GOLDBERG, CMT

The definition of a bull market is a market that is trending up. In technical analysis terms, an uptrend consists of a series of higher lows and higher highs. The current rally has run for 8 (practically) consecutive trading days so far. Is it a bear market rally? Well, its a bear market, and its a rally. So far it can only be called a bear market rally. This is not to say that we haven't seen The Bottom, because in technical terms there is no way of knowing for sure now whether we have seen it. However, one important piece of supporting evidence to suggest that the market has gone from bear to bull is the definition itself. In this article, the sector charts that are close to making higher highs are featured. If these higher highs are achieved, then it is very likely that a new bull market is here and the leadership of the new Bull Market will come from these leading sectors.

A scan of the 3-year weekly charts within most lagging sectors shows pretty much the same chart throughout. That is, of severely down trending price action followed by a massive 8 day rally. Typical of such action is the chart of the financial services ETF, shown below. Here you see a deep and decisive downtrend followed by a sharp rally that does not (yet) refute the overall trend, which is still down. The most profitable way to play this rally would have been to hop aboard the most troubled sector and ride it for at least 8 days. In the case of the financial services sector, a gain of over 30% in less than 8 days was achieved.

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

[ozymandius]

2. no goobermental reports today n/t

[Roland99]

18. No news is good news, eh?

Everyone have a happy Friday and a fun weekend.

[ozymandius]

3. Oil drifts back as trader reasses outlook

SINGAPORE – After surging above $51 a barrel the previous day, oil prices drifted back Friday in Asia as traders reevaluated expectations for renewed crude demand amid persistent uncertainty about the global economy.

Benchmark crude for April delivery fell 67 cents to $50.94 a barrel by afternoon in Singapore on the New York Mercantile Exchange. Prices climbed $3.47 on Thursday to settle at $51.61.

With the April contract set to expire Friday, most of the trading had shifted to the contract for May, which was down 37 cents to $51.67.

.....

Oil has been bolstered this week by news the U.S. Federal Reserve plans to buy $1.25 trillion of government bonds and mortgage-backed securities. The announcement sent the dollar down on worries the plan would expand dramatically the money supply and stoke inflation. Oil contracts are often used by investors as a hedge against inflation and a weakening dollar.

.....

In other Nymex trading, gasoline for April delivery fell 0.33 cent to $1.43 a gallon, while heating oil was steady at $1.36 a gallon. Natural gas for April delivery was steady $4.18 per 1,000 cubic feet.

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

[ozymandius]

4. Oil prices reach new high for 2009 as dollar falls

NEW YORK – A weakened dollar and evidence that OPEC has significantly slowed production sent oil prices soaring to new highs for the year Thursday.

"I think we'll see higher oil prices for a while," said Michael Lynch, president of Strategic Energy & Economic Research. "There's an expectation that the market has bottomed out."

.....

Gas prices increased 1.3 cents a gallon overnight to a new national average of $1.933 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Pump prices are 2.7 cents a gallon cheaper than a month ago and $1.346 a gallon cheaper than last year.

Analysts rushed to buy crude after the Federal Reserve announced late Wednesday it would buy long-term government bonds, a measure that's expected to jolt the economy with lower rates on mortgages and other consumer debt.

The Fed also said a $1 trillion program to jump-start consumer and small business lending could be expanded to include other financial assets.

http://news.yahoo.com/s/ap/20090319/ap_on_bi_ge/oil_prices

[UpInArms]

21. May crude down 79 cents to $51.26 a barrel on Globex

01. May crude down 79 cents to $51.26 a barrel on Globex
8:26 AM ET, Mar 20, 2009

[ozymandius]

5. Asian markets mixed on worries about US inflation

HONG KONG – Asian stock markets were mixed Friday as investors turned cautious amid worries the U.S. Federal Reserve's latest move to combat recession in the world's largest economy will lead to rampant inflation.

Trade was lackluster in most markets, with Tokyo closed for a holiday, as the region closed out one of its strongest weeks this year with a whimper.

Sentiment took a hit after Wall Street's rally petered out Thursday. U.S. investor euphoria over the central bank's aggressive $1.2 trillion plan to buy government bonds and debt securities gave way to fears the new spending could water down the dollar's worth and lead to higher prices across the board.

....

Hong Kong's Hang Seng led Asia's declines, falling 297.41 points, or 2.3 percent, to 12,833.51, and Australia's benchmark S&P/ASX 200 stock index lost 0.4 percent to 3,465.8. Taiwan's benchmark sagged 1.5 percent.

Stocks in mainland China rose for a fifth day, with the Shanghai Composite advancing 0.7 percent to 2,281.09. South Korea's Kospi climbed 0.8 percent to 1,171.04. Trading will reopen in Tokyo on Monday.

Markets in the Philippines and Thailand also rose.

http://news.yahoo.com/s/ap/20090320/ap_on_bi_ge/world_markets

[ozymandius]

6. Wall Street Shudders as Lawmakers Take Aim at Pay

Finance executives scrambled Thursday to react to a bill that would gut the current Wall Street compensation system.

Many bank officials were caught off-guard by the depth of public ire against Wall Street bonuses, and the passage of a bill by the House that would tax many of those bonuses by 90% at firms that received at least $5 billion in federal bailout funds. No brokerage firms or banks were immediately willing to go on the record with a view on the measure.

A leading finance group, the Securities Industry and Financial Markets Association, was in consultation with a constitutional-law expert about the bill's legality, according to a person familiar with the matter. But it, too, chose not to make a statement.

.....

Banks have thousands of employees who make more than $250,000 per household, the level at which the tax would take effect, pay experts say.

http://online.wsj.com/article/SB123750749608290323.html?mod=googlenews_wsj

---

We hear again the argument of this legislation's overall effect of driving away the "brightest and the best" from Wall Street finance firms and, thus, crippling firms that have been managed better. I suppose closer scrutiny is warranted to gauge the veracity of this statement. However, on its face, it is difficult for me to feel any sympathy over these events.

[rfranklin]

9. If they are truly that bright perhaps they can go somewhere...

where they actually apply those smarts and do something productive.

[tclambert]

22. On Leno last night, Obama said:

"We need a smart kid coming out of school, instead of wanting to be an investment banker, we need them to decide they want to be an engineer, they want to be a scientist, they want to be a doctor or a teacher."

When he said engineer, I did a woo-hoo because my son and one nephew are brilliant engineers. Both work on designs for hybrid vehicles.

Scientists, doctors, and teachers are OK, too, I suppose.

[antigop]

69. The smart kids I know are avoiding engineering like the plague--too many jobs outsourced

These kids aren't dumb. They see their parents, uncles, and aunts losing their jobs and don't want to go anywhere near an engineering career.

[tclambert]

74. Here's the thing. If we let engineering go to China and India,

we create a horrible national security risk as well as economic risk. The real wealth of America comes far more from the efforts of engineers (= inventors), than from investment bankers. Telephones, automobiles, airplanes, computers, televisions, light bulbs, refrigerators, etc. have more to do with building the wealth of nations than any kind of financial derivatives.

And what happens at some future date when our relationship with one of these engineering powerhouses sours? We could become technologically a second class world power. We haven't yet. It's not too late. We still lead, or are near the lead, in several fields. It is important strategically that we keep a certain amount of engineering expertise in-country. This is a case where the national interest may not coincide with the desire of "free" market global corporations.

Can I hear a "fuck the corporations" from the congregation?

[Demeter]

78. If We Let Economics Go to India and China

We'd be free of Friedman, Reaganomics, trickle-down, the Laffer curve,....Paulson, Geithner, Summers and....

Helicopter Ben!

[Dr.Phool]

85. My former business partner is an engineer and a planner.

They put him in charge of solving the O-ring problem on the shuttle, after Challenger.

He's looking for work overseas, because there is none here.

[Demeter]

12. Why a 5 Billion Trip Level?

Surely One Billion would have been significant enough. I can't believe we're tossing around billions like they were potato chips.

Should be anything over $50k.

[radfringe]

17. driving away the "brightest and the best" from Wall Street finance firms

considering the economy and unemployment as a whole - seems to me these "best/brightest" should be paying the company to retain their jobs...

if one of these dim lightbulbs leaves AIG - where are they going to go?

regarding the furor over the "bonus babies" - although Congress is addressing the issue, I can't shake the feeling that "cake" is being served to placate the masses

[saigon68]

19. That's some "cake" alright

I especially like the arrogance of----

"If we don't pay the (contractual) bonus we will be sued " argument.

Oh yes, sue in Federal Court assholes! At the rate civil cases come up for trial in Federal Court, or are settled, this trial should take place in 2020 or so--- Maybe later.

[bread_and_roses]

28. If they're so bright how did "puclic ire" catch them "off-guard?"

Talk about drinking the cool-aid - I guess they all believed all those commercials showing them as Masters of the Universe! striding about the globe "making deals! creating "wealth!" We're supposed to scrabble gratefully in their wake for the dropped coin, tugging at a forlocks as they pass.

[Demeter]

34. The Public Doesn't Exist to These People

we are rats, confined to squalid places.

[tclambert]

75. "The people are revolting." "You said it. They stink on ice."

[4dsc]

38. Actually, rightie believes this is unconstitutional

Rightwingers are all over this as being unconstitutional.. To bad its been used before I believe I heard the other day.. So let them whine..

[Demeter]

40. The Way this Bill Was Broadened Out (which I totally Support)

I believe it WILL be Constitutional, and it puts all those bad boys on notice that they can't pull their usual tricks any more.

[Hugin]

47. If the word 'tax' bothers them, it can always be called a 'fee'.

The Bankers know all about jacking fees without any notice or reason.

[mbperrin]

49. "THOUSANDS of employees who make more than $250,000 per household"?

Funny, because on March 19, 2009, thousands of JP Morgan Chase employees reported the following median pay:

Personal banker $32,808
Branch manager, banking $54,912
Assistant branch manager banking $35,600
Business analyst, finance/banking $58,723
Vice president and branch manager, banking $60,508
Associate, investment banking $87,390
Project manager, banking $67,568


http://www.payscale.com/research/US/Employer=J.P._Morgan_Chase_&_Co./Salary


Of course, if mom and dad and little Suzie were all employed as associates in investment banking at the median, their income would be $250,000 or more....

I usually just lurk here on SMW and WEE and really enjoy the facts and analysis found here. Thought I'd just wet my feet a bit this morning.

[Hugin]

55. They're playing the averages.

Trying to make it seem the Big Bad Gooberment is after the little people.

It's pretty sad really... Remember the treatment Saddam got trying to hide behind 'human shields' and babies?

Did you see the stupid Wal-Mart bonus article yesterday? Same game... I'll be asking my Wal-Mart operatives if they get any of that $2 Billion as a bonus. I'm not holding my breath on it, tho.

Make no mistake... This act is directed toward the top bonuses. Not the median earners.

:hi: Glad you decided to chime in!

[tclambert]

76. Are you implying that financial executives got their math wrong?

And it's only dozens of employees who might be affected? C'mon, if they were that bad at math, why, the financial markets could crumb . . . hmmm.

[ozymandius]

7. FedEx profit dips; more cuts ahead

Despite gaining new customers from the shrinking U.S. presence of DHL and lower fuel prices, the world's two largest package-delivery companies are battening down the hatches as they prepare for even worse weak global economic conditions.

FedEx ( FDX) said it will cut more jobs and trim wages again, after reporting its third-quarter profit tumbled 75 percent to $97 million, or 31 cents per share, on 14 percent less revenue of $8.14 billion.

http://www.miamiherald.com/business/nation/story/958860.html

[ozymandius]

8. 13 Bailed-Out Banks Failed to Pay Taxes

Thirteen of the largest recipients of the government's massive bailout failed to pay more than $220 million in federal taxes, congressional investigators said yesterday, prompting a new round of accusations that banks were abusing the financial rescue program.

The Internal Revenue Service said late yesterday that a portion of the money had been paid back since congressional investigators gathered their information. Still, many in Congress were furious, noting that firms with the largest tax liabilities owed $113 million and $102 million.

"This is shameful. It is a disgrace," said Rep. John Lewis (D-Ga.), chairman of the House Ways and Means Committee's oversight subcommittee, which examined the IRS data. "The American people are fed up, and they are fired up. And they are not going to take it anymore."

.....

The tax data were released yesterday after Lewis's committee asked the IRS for tax information on the 23 largest recipients of the $700 billion federal bailout.

IRS officials cautioned that the tax data represent a snapshot and said there could be many reasons recipients have not paid. They said that major corporations are constantly audited and therefore the amounts of taxes due fluctuate.

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/19/AR2009031901456.html?hpid=sec-business

[ozymandius]

10. U.S. Economy: Leading Indicators Index Declines 0.4%

March 19 (Bloomberg) -- A measure of the economy’s future performance dropped and the number of Americans collecting unemployment benefits surged to a record, evidence the recession is deepening as policy makers try to unfreeze credit markets.

The Conference Board’s index of leading indicators, a gauge of the economy’s direction over the next three to six months, fell 0.4 percent in February, less than forecast. Manufacturing in the Philadelphia area shrank for the 15th time in 16 months, a Federal Reserve report showed, and the Labor Department said 5.47 million Americans are getting jobless benefits.

....

Today’s figures underscore the picture of a worsening economy that provided a backdrop for the Fed’s meeting this week, when the central bank pledged to buy as much as $1.15 trillion in assets to pump more money into the banking system. Chairman Ben S. Bernanke forecasts an economic recovery in 2010 as long as policy makers take sufficient action.

....

The leading index was forecast to drop 0.6 percent, according to the median of 60 economists in a Bloomberg News survey. Estimates ranged from a decline of 1.1 percent to no change. The Conference Board also revised January’s reading to a gain of just 0.1 percent, down from a previously estimated increase of 0.4 percent.

http://www.bloomberg.com/apps/news?pid=20601087&sid=avKAB.3FrW5M&refer=home

[Festivito]

11. Debt: 03/18/2009 11,034,225,094,391.03 (DOWN 8,328,877,059.44) (Small.)

(Small move, mostly FICA down.)

= Held by the Public + Intragovernmental(FICA)
= 6,742,241,452,096.13 + 4,291,983,642,294.90
UP 237,422,838.19 + DOWN 8,566,299,897.63

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 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.8, ABOUT TEN BUCKS for a 1B$ 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 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,998,715 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,059.71.
A family of three owes $108,179.13. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 11,633,300,914.01.
The average for the last 30 days would be 8,143,310,639.81.
The average for the last 28 days would be 8,724,975,685.51.
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$/day.
There were 40 reports in 57 days of Obama's part of FY2009 averaging 0.75B$ per report, 0.59B$/day so far.
There were 115 reports in 169 days of FY2009 averaging 8.78B$ per report, 5.97B$/day.

PROJECTION:
There are 1,404 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 23.3T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/18/2009 11,034,225,094,391.03 BHO (UP 407,348,045,477.95 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,009,500,197,478.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/26/2009 +048,048,940,708.92 ------------**********
02/27/2009 +000,306,718,307.89 ------------********
03/02/2009 +074,163,317,993.12 ------------********** Mon
03/03/2009 +000,498,419,440.82 ------------********
03/04/2009 +000,625,214,862.41 ------------********
03/05/2009 +006,943,273,604.61 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********

211,434,402,498.34 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,369,593,291,131.96 in last 181 days.
That's 1,370B$ in 181 days.
More than any year ever, including last year, and it's 135% of that highest year ever only in 181 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 181 DAYS NOT 365.

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

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3789909&mesg_id=3790507

[UpInArms]

65. US CBO revises FY 2009 deficit to $1.8 trln-source

http://www.reuters.com/article/bondsNews/idUSN2049806720090320

WASHINGTON, March 20 (Reuters) - U.S. congressional analysts are expected on Friday to forecast even more red ink than expected, a record $1.8 trillion deficit for fiscal 2009, which could complicate President Barack Obama's efforts to pass his $3.55 trillion budget plan for 2010.

The Congressional Budget Office is expected to project a $1.8 trillion deficit for the fiscal year that ends Sept. 30 and then forecast a drop to $1.4 trillion for fiscal 2010, a source familiar with the numbers told Reuters.

Since taking office in January, the Obama administration has been shoveling billions of dollars out the door in a bid to reverse a steep downward spiral in the U.S. economy and prop up the struggling financial system.

The massive deficit forecasts come after Obama submitted in February his $3.55 trillion budget plan for fiscal 2010, which includes huge new programs to address healthcare and curb greenhouse gas emissions.

His plan has drawn fierce Republican criticism for its massive new spending and tax increases on the wealthy.

In January the CBO forecast almost $1.2 trillion in red ink for fiscal 2009 and $703 billion for fiscal 2010, but that came before the $787 billion economic stimulus package Congress passed to kick-start the ailing economy.

...more...

[Festivito]

93. Debt: 03/19/2009 11,039,686,130,898.10 (UP 5,461,036,507.07) (Still small.)

(Small moves, although who would not like to have a spare four or five billion dollars.)

= Held by the Public + Intragovernmental(FICA)
= 6,746,328,587,056.90 + 4,293,357,543,841.20
UP 4,087,134,960.77 + UP 1,373,901,546.30

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 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.8, ABOUT TEN BUCKS for a 1B$ 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 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,004,886 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,076.83.
A family of three owes $108,230.49. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 11,317,340,417.78.
The average for the last 30 days would be 7,922,138,292.45.
The average for the last 28 days would be 8,488,005,313.34.
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$/day.
There were 41 reports in 58 days of Obama's part of FY2009 averaging 0.72B$ per report, 0.59B$/day so far.
There were 116 reports in 170 days of FY2009 averaging 8.75B$ per report, 5.97B$/day.

PROJECTION:
There are 1,403 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 22.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/19/2009 11,039,686,130,898.10 BHO (UP 412,809,081,985.02 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,014,961,233,985.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/27/2009 +000,306,718,307.89 ------------********
03/02/2009 +074,163,317,993.12 ------------********** Mon
03/03/2009 +000,498,419,440.82 ------------********
03/04/2009 +000,625,214,862.41 ------------********
03/05/2009 +006,943,273,604.61 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********

167,472,596,750.19 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,375,054,327,639.03 in last 182 days.
That's 1,375B$ in 182 days.
More than any year ever, including last year, and it's 135% of that highest year ever only in 182 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 182 DAYS NOT 365.

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

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3792013&mesg_id=3792047

[Demeter]

13. Good Morning, Ozy, Boys and Girls!

Excellent cartoon. Toles knows how to spotlight the absurdity. Wonder if anyone's done a job on the printing of dollars, or the unpaid corporate tax issue yet....

Even though my head is clearing from the cold, it still feels exploded by yesterday's pronouncements. This isn't the world I was born into and grew up in. Somebody stop the world, I want to get off.

[ozymandius]

15. Good morning, Demeter.

:donut: :donut: :donut:
Since my classroom subject deals with a lot of this mess - I try to assert some brazen honesty that was barely evident when I came through school. Today's youth will live in a radically changed world from the one we were told to expect.

I am glad the cold is clearing up. Please try to get some rest.

[Tansy_Gold]

27. As a boomer who grew up in those "better times" we too often reference,

I would like to point out what I see, in retrospect, as one of the most glaring deficiencies of an otherwise decent public education --

No instruction whatsoever in comparative economic systems. Now, understand that I never took a class in economics per se, but the virtual indoctrination in capitalism via government class, US and state constitution tests and preparation therefor, US and even world history, current events, etc., offered many opportunities to discuss other systems at least to the point that the reasonably intelligent student would come away with some basic understanding of what how democracy and fascism and totalitarianism operate within capitalist, socialist, and communist economies. All we ever got was "US perfect, Russian commies bad." I remember one class in world geography where our study of Asia required us NOT to take any notice of the big huge China on the map; "China" really meant "Taiwan." So in other words, we studied nothing about the real China at all.

If it weren't for Pearl Buck, Paul Muni, and Luise Rainer, most of us wouldn't know anything about "the sleeping giant" at all.

And once again, I must publicly thank my marvelous (and gone much too soon) fifth grade teacher, Patricia Quast, for introducing our remarkable class to Tchaikowsky's 1812 Overture and explaining it. If nothing else, we came out of that class with some idea that there was more to Russia than Khrushchev and the threat of nuclear annihilation.

it's amazing, really, what teachers can do.

:yourock:


Tansy Gold, who probably should've been one

[Demeter]

33. Growing Up in Detroit As I Did

we got a hint of the labor struggles--the unionization efforts, the backlash. Hell, there were live and powerful unions then! They couldn't erase or conceal the fact that Management had the only story.

[Hugin]

35. One piece of my Public Education really stands out to me in current times.

Way back, (before color was invented) I had a section in High School on Mortgages, Finance, and Taxes... It was a required course to graduate. Also, it was a fairly aggressive class with very little pulp.

I, until very recently, took it for granted that everyone had had a similar class. Boy, was I wrong!

I've found almost nobody else who was required to take these topics. I still have some friends I graduated with and NONE of them are suffering as much from the current Economy as those I know who weren't required to take a similar course.

[Demeter]

41. Where Was This, Hugin? City and State and Time?

[Hugin]

44. I'll tell you the time... It was a year prior to Reagan.

:o

Hmm... That explains it. A year later the 'Dumbing' began. This does argue that it was a conscious decision by TPTB to kill the Middle-Class.

:tinfoilhat:

The exact locale is irrelevant, except to say it was a solidly 'Middle Class' area. Eh, now? Not so much.

Edit to add: Even though the class was fairly mathematical it was taught through the Social Studies Department and not Home Economics or Math.

[Demeter]

45. Did You Know Reagan Was Shot 69 Days into His First Term?

Poppy wanted it over fast. I was just researching Reagan, thought I'd make a point of this in these Post-Conspiracy days.

[Hugin]

46. Very interesting.

You know, I remember exactly where I was and what I was doing when I heard the news.

My Mom and I had walked to town for some exercise. On the way back it started snowing humongous flakes of wet snow. We'd ducked into a local department store to call Dad to come pick us up. Mom took the opportunity to look at some fabric and we were back in that section when the attack was announced over the radio playing on the store intercom system.

Odd how I remember these things.

[ozymandius]

14. FDIC Closes Sale of Indymac, Loses $10.7 billion - OUCH!

From the FDIC: FDIC Closes Sale of Indymac Federal Bank, Pasadena, California

The Federal Deposit Insurance Corporation (FDIC) has completed the sale of IndyMac Federal Bank FSB, Pasadena, California, to OneWest Bank, FSB, a newly formed Pasadena, California-based federal savings ...

IndyMac Federal sustained losses of $2.6 billion in the fourth quarter 2008 due to deterioration in the real estate market. The total estimated loss to the Deposit Insurance Fund is $10.7 billion.

a bit more at Calculated Risk

This amazing loss was brought to you by some of Wall Street's Brightest and the Best®

[Demeter]

16. Congrats, I Guess

At least now it's someone else's pocket.

[UpInArms]

20. dollar watch

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

Last trade 83.778 Change +0.688 (+0.89%)

Role and value of U.S. dollar set to fall: Asia think tanks

http://www.reuters.com/article/newsOne/idUSTRE52I1OM20090319

TOKYO (Reuters) - The role of the U.S. dollar as the key global currency will decline after the financial crisis, and its value may also weaken due to America's current account deficit, officials at some of Asia's top think tanks said.

But Asia, which is heavily invested in U.S. assets, hopes any decline in the dollar will be gradual to avoid further shocks to financial systems, the officials said on Thursday.

"The dollar's role will gradually be shifted," Zhang Yunling, director of Institute of Asian and Pacific Studies at Chinese Academy of Social Sciences, told a news conference in Tokyo after a meeting of Asian research groups.

"China hopes to have a stable and gradual transition rather than a radical revolution," he added.

The dollar logged its biggest daily fall against a basket of currencies in more than two decades on Wednesday as the U.S. Federal Reserve said it would buy long-term Treasuries.

The Fed move stirred worries that the U.S. would spew dollars into global markets, leading to an oversupply of the world's main reserve currency.

...more...

Dollar steadies, eyes steepest weekly fall in 24 years

http://www.reuters.com/article/usDollarRpt/idUSLK21991720090320?sp=true

LONDON, March 20 (Reuters) - The dollar inched higher on Friday, but was still on track for its biggest weekly drop in 24 years against a basket of currencies as investors feared the Federal Reserve's plans to buy longer-term government debt would undermine the value of the world's main reserve currency.

The euro reversed earlier gains, easing back from above $1.37 as investors booked profits on this week's sharp rally and some cited concerns about weaker euro zone members.

The dollar has fallen over 5 percent against the basket of currencies this week, heading for its biggest weekly decline since 1985.

A fall of 5.2 percent at the close later on Friday would also make this week's dollar plunge the biggest since 1973 when the Bretton Woods system of fixed exchange rates was finally abandoned.

"Although it's too early to say it's a turning point, the Fed's decision to go down the QE (quantitative easing) route may be the first step of things stabilising and finding a bottom. The recession will still be prolonged and deep but it's a step in the right direction," said Christian Lawrence, an FX strategist at RBC Capital Markets.

The dollar has tended to rise in recent weeks along with falls in global appetite for risk as investors retreated to U.S. assets still seen as the safest bet as the global economy tanks.

...more...

[UpInArms]

23. Dollar poised for big weekly tumble

http://www.marketwatch.com/news/story/Dollar-poised-big-weekly-tumble/story.aspx?guid=%7B87DB45F9%2DE29A%2D4AE6%2D8EEE%2DECEF23BE43E5%7D

LONDON (MarketWatch) -- The U.S. dollar rebounded Friday but remained in line for a huge weekly loss against major rivals following the Federal Reserve's decision this week to massively pump up the supply of dollars in a bid to jumpstart the economy and avert a deflationary spiral.

Commodity currencies, as well as the euro, are among the week's biggest beneficiaries after investors and traders rushed into gold and other commodities following the Fed's decision to begin aggressively purchasing Treasury bonds and other debt.

The Norwegian krone has been among the top performers in the wake of the Fed move, with a total gain of 7.7% versus the dollar, wrote strategists at Lloyds TSB.
The Norwegian krone dipped 0.3% Friday to trade at 6.348 per dollar, but began the week near 6.840.

Meanwhile, the euro appears to have regained a tight relationship with movements in the gold price after European Union finance ministers gave a cold shoulder to U.S. calls for increased stimulus spending, noted Simon Derrick, chief currency strategist at Bank of New York Mellon.

Since March 9, the euro had rallied around 7.9% versus the dollar, compared to a 7.4% rise in the price of gold over the same period, he said, in a research note.

"Given that the volatility of the gold price typically runs at over twice that of , this is real testament to the single currency's changing status," Derrick said. "It appears that once again the euro really is as good as gold."

...more...

[Ghost Dog]

24. More debt: A curious solution to a credit crisis

By Pedro Nicolaci da Costa - Analysis

NEW YORK (Reuters) - A nagging question haunts U.S. government efforts to revive a dormant financial system: Can a crisis that started because of excess credit be solved with more debt?

...

Yet the refrain out of Washington places a lot of credence on the ability of debt to revive the country's economy. U.S. Treasury Secretary Timothy Geithner was only the latest to proclaim what has now become an official mantra. Without credit, which he and others call the "lifeblood" of the economy, you can kiss recovery hopes goodbye. Federal Reserve Chairman Ben Bernanke, justifying the massive help the central bank has offered to financial institutions, made his own case: "This disparate treatment, unappealing as it is, appears unavoidable. Our economic system is critically dependent on the free flow of credit."

Detractors of this view argue that it offers an overly convoluted approach. The problem, they say is much simpler. "We need to get jobs and incomes flowing, not credit," said Randall Wray, research director at the Center for Full Employment and Price Stability, in Kansas City, Missouri.

INSECURITIZATION

That is certainly not the prevailing view among policy-makers. Indeed, a huge part of the Treasury's economic rescue plan is based on reviving securitization. This is the process by which everything from real estate and auto loans to credit cards and student debt gets repackaged into bonds and is then sold on to investors in a secondary market. This worked wonders during the boom of the past couple of decades, leading to rapid capital formation that underpinned a huge rise in lending. But when the music stopped, many investors were left looking for an empty chair as these products of financial "innovation" proved ruinously difficult to value.

Given this history, Wray, also a senior fellow at the Levy Economics Institute, said asset-backed bonds are the problem, not the solution. "We need to kill off securitization and go back to banking -- loan officers and underwriting."

This is not to say that government policies have no role in ameliorating the economic conditions generated by the crisis. Indeed, experts widely agree that the public sector must enlarge its role during a time of crisis to ensure that the underlying momentum of the economy does not screech to an abrupt halt. But many believe this greater involvement is best undertaken at the fiscal level, by enacting policies that directly boost employment rather than hoping for the onward flow of credit to eventually trickle down into the labor market.

...

Prudent lending is a good thing. If creditors have cut back, it is because the risks associated with an environment of turbulence dictate that they should.

"In truth, not all economies run on credit. In a legitimate economy, it is not credit that fuels spending and investment, but simply income and savings," said Peter Schiff, president of Euro Pacific Capital in Darien, Connecticut. "That American families now routinely rely on credit to make every-day purchases is a habit that needs to be broken and not encouraged."

James Poterba, the MIT economist who now heads the influential National Bureau of Economic Research, agrees that there is some inconsistency in the advice given by experts. "As economists, the policy prescription we're making is to say we need to get people out there to spend and to help boost the economy," he said. "At the same time, I know personally, I feel it is a good time to be saving more and to be trying to be rebuilding some of those assets."

...

Still, it remains to be seen whether the appetite for such bonds will even exist in a world where risk-aversion is so pervasive. The burden of proof will be with the camp that says a system that so miserably failed the test of time can still be made to work somehow.

Moreover, even if these loans do become available, the current crisis is affecting consumers so deeply that it may lead to a prolonged -- and perhaps wise -- reluctance to take on new debt.

The reason is right out of Economics 101: supply and demand. The current debacle is, at its core, a problem of oversupply, of housing, cars, plastic toys, and debt itself. Adjusting to that glut will take time, lots of it.

"We're going through an epic credit collapse," said David Rosenberg, chief North America economist at Banc of America Securities-Merrill Lynch. "It's going to be very difficult to fight this thing with demand-led policies."

/... http://www.reuters.com/article/wtUSInvestingNews/idUSTRE52I4WV20090319?sp=true

[Demeter]

29. Definition of Insanity Applies Here

What part of Miserable Failure don't they get, down in the Treasury and the Fed?

Securitization is a failure. It fails because it doesn't smooth out the economic cycle, it makes it so much worse that people lose their entire lives, instead of just a few months. Countries don't decline, they go belly up. Businesses not only crash and burn, they take their suppliers, customers, communities, industries and whole nations down with them.

Leverage is the means by which small forces are magnified. And these destructive forces have become weapons of mass destruction.

Deleverage, not releverage is the path to peace, prosperity and profit. Anything else is MAD (Mutually Assured Destruction).

[Tansy_Gold]

39. Delusions of grandeur

The more I read about the engineers of these fiascos, those quaintly named "quants" and their backers, the more I think they're living in a complete fantasy land.

Like alchemists trying to turn lead into gold, these "magicians" have tried to eliminate risk from gambling. They've tried to create a system where no one can lose a bet. Or at least no one on "their" side, because in any bet there must be a winner and a loser. The winner gains and the loser, well, loses.

The quants, the traders, the CEOs, the schemers and the scammers have completely lost sight of the fact that their ultimate backer, their "house," their sugar daddy, is us. They are such a tiny, tiny portion of the population, yet they have gotten it into their addled little brains that they own EVERYTHING.

They don't.

They need to be reminded of that.

Forcefully, if necessary.



May the force be with them,



Tansy Gold

[tclambert]

56. But, Tansy, consider the genius of finding a way to shift their risk onto others.

Us, as it ended up. The subprime mortgage lenders got their money in fees up front, then sold the risky mortgages to others. These others then packaged their risky mortgages and sold them as CDOs to yet others. And these others took out insurance on their risky investments, transferring the risk to the insurers. The insurers lost kilotons of money (literally thousands of tons if paid in $100 bills) and got the government to shoulder the losses by bailing them out. And we taxpayers end up holding the debt for the bad mortgages the subprime lenders made.

In a perverse way, it is truly a work of genius. No doubt there are quants studying this paradigm already, trying to figure out how to capitalize on it or parts of it again in the future.

I don't mean to approve of what they've done, just to acknowledge their skillful execution. (Skillful execution, there's an idea maybe we should try on them.) Kind of like I can appreciate the genius of Hitler's conquest of Norway, while condemning him for attacking Norway at all.

[Tansy_Gold]

57. Yes, of course, and the genius of Dr. Guillotin for inventing

a more "humane" method of "execution."

What bothers me, of course, is that the language of the media -- from NPR to fux to M$NBC -- is to commend these guys for brilliantly concocting methods to reduce risk. Nothing of the sort was at work here. The risk can never, mathematically, be eliminated. It is, really, a simple zero sum game.

This is 2 + 2 = 4. It can NEVER (in reality) = 4,265.

Nor does 4 x 0 x 35 = profit. You can't leverage it into a profit. You're not adding anything to it; in fact, more often than not you're taking something away.

Physics should never have entered the marketplace. Science isn't a commodity.


Tansy Gold

[tclambert]

67. A test of doublethink was to believe 2 + 2 = 5, while simultaneously knowing it was false.

We run into doublethink just about every day around here. Karl Rove criticized Obama for planning to run up big deficits, then suggested adopting the Republican plan of a "tax holiday," which would make deficits worse. Rove even uttered the phrase "fiscal responsibility" without bursting into flames. (The doublethink is strong with this Rove person.) For God to allow the existence of Karl Rove involves some paradoxical miracle of divine doublethinking.

Maybe our error is expecting rationality from God. What if God is a lunatic? Then the rules of reality might only make sense from an insane point of view.

[Dr.Phool]

68. I never thought of it that way.

"Maybe our error is expecting rationality from God. What if God is a lunatic?"

It would be impossible for a perfect being to create completely screwed up creations, such as humans, and especially Rove.

[Hugin]

70. It's probably that 'free will' thing.

We have what we need, but, we insist on screwing it up.

Not to spin off into Theology, but, I recently encountered an explanation of why Humans are so dangerous.

It's because we don't have any claws or fangs... Tigers know instinctively other Tigers are deadly and therefore they avoid ticking off each other. We primates never learned that lesson. There is little injury from thumping around on each other with our soft pink hands. In fact some of us enjoy it... However, we also have the ability to escalate things way beyond those games. So, we have this attraction to destruction while at the same time lacking the instinctive ability to see the danger in it.

That's why I give our species the life expectancy of an unrefrigerated jar of mayonnaise.

Sorry for the philosophical excursion, but, y'all sent me into a moment of Navel Research.

[tclambert]

77. Next up on Theology Watch . . .

Buddhist economics. What is the sound of one mortgage defaulting?

[Demeter]

80. You Two Are a Couple of Jokers

and neither is playing with a full deck! :rofl::rofl:

[Danascot]

82. There is actually a lot to Buddhist Economics

despite sounding like an oxymoron. Check it out:

http://www.google.com/search?hl=en&safe=off&q=%22Buddhist+economics%22&btnG=Search

Granted some of it requires yogic mind contortion to the point of causing sprains but surprisingly a lot of it is satisfyingly sensible.

[tclambert]

91. I like the sound of Gross National Happiness.

And the idea of changing labor from meaningless, boring, and soul-destroying to something spiritually rewarding as well as money-making. "If the nature of the work is properly appreciated and applied, it will stand in the same relation to the higher faculties as food is to the physical body. It nourishes and enlivens the higher man and urges him to produce the best he is capable of. It directs his free will along the proper course and disciplines the animal in him into progressive channels. It furnishes an excellent background for man to display his scale of values and develop his personality."--J. C. Kumarappa

My son and his friends are kinda doing that. They are working on greener cars and alternative energy. They're saving the world and they know it. Makes me feel a little ashamed of our generation, screwing up the world so bad.

(Edited to add attribution of quote.)

[tclambert]

94. Some more Buddhist economic quotes:

From "BUDDHIST ECONOMICS" by E. F. Schumacher
http://www.schumachersociety.org/buddhist_economics/english.html

"The very start of Buddhist economic planning would be a planning for full employment."

"While the materialist is mainly interested in goods, the Buddhist is mainly interested in liberation."

"For the modern economist this is very difficult to understand. He is used to measuring the "standard of living" by the amount of annual consumption, assuming all the time that a man who consumes more is "better off" than a man who consumes less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption."

"Simplicity and non-violence are obviously closely related. The optimal pattern of consumption, producing a high degree of human satisfaction by means of a relatively low rate of consumption, allows people to live without great pressure and strain and to fulfill the primary injunction of Buddhist teaching: “Cease to do evil; try to do good.” As physical resources are everywhere limited, people satisfying their needs by means of a modest use of resources are obviously less likely to be at each other’s throats than people depending upon a high rate of use. Equally, people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on world-wide systems of trade."

"From the point of view of Buddhist economics, therefore, production from local resources for local needs is the most rational way of economic life, while dependence on imports from afar and the consequent need to produce for export to unknown and distant peoples is highly uneconomic and justifiable only in exceptional cases and on a small scale."

"The teaching of the Buddha, on the other hand, enjoins a reverent and non-violent attitude not only to all sentient beings but also, with great emphasis, to trees."

"Modern economics does not distinguish between renewable and non-renewable materials, as its very method is to equalise and quantify everything by means of a money price. Thus, taking various alternative fuels, like coal, oil, wood, or water-power: the only difference between them recognised by modern economics is relative cost per equivalent unit. . . . From a Buddhist point of view, of course, this will not do . . . Non-renewable goods must be used only if they are indispensable, and then only with the greatest care and the most meticulous concern for conservation. To use them heedlessly or extravagantly is an act of violence."

"As the world’s resources of non-renewable fuels—coal, oil, and natural gas—are exceedingly unevenly distributed over the globe and undoubtedly limited in quantity, it is clear that their exploitation at an ever-increasing rate is an act of violence against nature which must almost inevitably lead to violence between men."

* * *

Beautiful ideas come thick and fast in Schumacher's essay from 1966. I think I like Buddhist economics.

[Hugin]

97. I'll be bookmarking this...

Very good. :)

[Tansy_Gold]

100. from 1966, eh?

He musta been one o' them dirty fuckin' hippies. :evilgrin:

[Ghost Dog]

98. Wow! That sounds just so... wonderfully... Gross!

(Such a slut). ;)

[Tansy_Gold]

88. Primates and murder

http://www.nytimes.com/1988/03/13/books/love-and-murder-among-the-chimps.html

But why did they do it? Were the chimps just mean? Were there resources or advantages the killer apes secured by destroying their own kind and others too? This Mr. Ghiglieri set out to discover. Broadly, he found a pattern of cooperative male territorial protection that could lead to struggles at territorial boundaries and to death. In another remarkable nearby project of more than 10 years' standing, the primatologist Toshisada Nishida found that all six adult males of a small community of 22 members were killed by the males of two larger neighboring groups, to which the females then migrated.

Rain forest chimp society is evidently marked by general social preferences of males for males, females for females. Females secure food more easily if they don't have to compete with larger males. In turn, this cooperative segregation can form the basis for deadly intra-male struggle between groups when access to territorial resources and to females is in question. Other targets of male chimp murder are the suckling infants of females taken forcibly under control by a new male. The females quickly stop lactating, begin ovulating and are now able to bear the infants of the usurper male. This pattern is not restricted to chimpanzees and has been observed among other species. Even human stepfathers, it has been claimed, are more likely than biological fathers to abuse small children.

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

Not to mention the recent devastating attack of a human by a chimpanzee, albeit one that had been held in "captivity" for a long time and probably was less "wild" or "feral" than others.

I only post this because I think it's important to understand that we humans are really as much like "animals" and "animals" are as much like us as we wish to be, depending on our perspective. Chimps have now been demonstrated to be capable of "premeditation." Crows can fashion tools. Dogs have a sense of fairness.

I frequently refer to my four canine companions as "children," "the kids," or even "you people." BF somewhat jokingly tells me "They aren't people." Sometimes I tell him we aren't either.


TG

[Ghost Dog]

84. Try this test: G20 A-OK (FT's Lex Column)!

The world may be coming together on what needs to be done to pull the global economy out of crisis. There is much common ground, if not quite a consensus, in many areas: financial regulation, and monetary and fiscal policy. Such agreement might not be a sufficient condition for eventual recovery. But it is a first and necessary one.

Take financial regulation. The de Larosière report, the UK’s Turner review and early drafts of the G20 communiqué all suggest much the same. In the future, the financial sector will be safer and duller. Banks will probably be smaller, regulation tougher, and required capital higher. Lower profitability will take care of the bonus issue by itself; the mob will eventually quieten. Whether such recommended changes are “good” or “bad” is a separate question. The important point is that international agreement seems relatively uniform. As a result, no banking system in one country will have an inherent competitive advantage over another. Tick one.

The same is true of monetary policy. All of the world’s major central banks have cut interest rates to zero, or close. Many are now engaged in quantitative easing. This is risky if done alone as it can weaken the currency and give rise to criticism of “beggar-thy-neighbour” devaluations. But if everyone does it, the whole world can gain from the extra monetary boost. Tick two.

Finally, there is fiscal policy. All countries are opening their wallets. Even Germany’s stimulus is only slightly smaller than the US’s, as a percentage of output. Europe’s biggest tightwad is, in fact, France. And as even the International Monetary Fund now believes countries should spend more, and the IMF’s director is a Frenchman, Paris may well come round too. Tick three.

There is still a long haul ahead. There will be setbacks, and the world is headed for a stiff recession, at least. Whatever happens, the required deleveraging will take years. But there are also grounds for hope.

/. http://www.ft.com/cms/s/2/5844ddee-1533-11de-b9a9-0000779fd2ac.html?ftcamp=rss

[tclambert]

90. GD! Is that optimism?

Been so long since I've seen any, it's hard to recognize. I like the sounds of a safer, duller financial system. That's what banking is supposed to be. Get those derivative junkies into rehab.

[Ghost Dog]

99. I fear it is wishful thinking,

over there.

[spotbird]

25. Harvard Endowment Payout Will Drop 15 Percent in Next Two Years

......

Harvard’s endowment, the largest of any school in the U.S., fell 22 percent, or $8 billion, from July 1 through Oct. 31, putting the fund on course to have its worst performance in at least four decades. Administrators told the university’s schools and units in November the endowment payout would either remain flat or decline as much as 2 percent this year, Longbrake said.

......

Endowment Policies

Harvard’s woes are linked to policies that linked endowment managers’ pay to the paper value of the fund, rather than the amount of income generated for the school, said Stanley Eleff, a lawyer in Tampa, Florida, who graduated from Harvard College in 1969. Eleff said he is part of a group of graduates who have complained to the university about the endowment investments and compensation structure.

“The encouragement that was provided to build value at the expense of income from the endowment has resulted in to some degree the chickens coming home to roost,” he said in a telephone interview.


......

http://www.bloomberg.com/apps/news?pid=20601103&sid=a2koi0hQVRuw&refer=us

[UpInArms]

26. a peek inside the Madoff offices (from an insider):

http://www.thedailybeast.com/blogs-and-stories/2009-03-19/madoff-employee-breaks-silence/full/

hattip to kpete and this DU thread

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3791720

The employee, who did not want to be identified because of possible lawsuits or threats by victims, was a member of an elite group that designed sophisticated computer-trading programs. His identity was verified by consulting the Madoff employment roster, where he was listed. He also has an employment confirmation letter and a letter of reference from the Madoff firm.

His description of how the legitimate arms of Madoff Securities were run sounds like a skit out of Monty Python. “The three managers who ran parts of the businesses were getting $500,000 to $750,000 a year and they didn’t even know anything about modern computerized trading,” the employee said. They knew only the antiquated methods of talking to clients and trading in the stock market by phone. They mostly socialized, read the news. They would have been unemployable on the outside.”

The employee learned the salaries of his colleagues when he secretly obtained a document listing them. “A senior computer programmer would make $350,000, where in most comparable firms they would be getting $200,000 to $250,000. The customer-relations people, who just handled complaints from clients, were making six figures. There wasn’t anyone who wasn’t paid in the hundreds of thousands,” he said, adding: “There were twice as many people as were needed and there was rampant inefficiency.

"The company could have been profitable but the Madoffs didn’t seem to care. The business model made no sense,” said the employee. "In actuality the trading groups were generating profits and the company had enormous potential."

The employee was part of a trading group, who were able to break a security code that he says led them to a site that was supposed to be seen only by the Madoff family. It showed the profits and losses of the legitimate businesses. Even in years when they grossed $25 to $50 million, they calculated in the outlandish costs and thus concluded that the firm barely broke even and some years lost money.

[Tansy_Gold]

30. That's the Charlie Keating model of how to keep .....

the incompetents on your side.

When I worked at Lincoln Savings in 91-92 for the RTC, the holdovers from Keating's day were furious at how their perks were cut, how they were job hunting in a market that was only paying half what Keating had paid them, etc. They were not the best and the brightest; they were the bought and the silenced.


TG

[Demeter]

32. Bon Mot!

Bought and silenced--there's a lot of that going around. A BushCo BFEE special.

[Karenina]

36. Wall Street companies can't be run well by people making under $250K

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x286529

[Hugin]

42. Then I guess we can't afford it.

Shut it down.

Thanks to UP for finding that gold brick nugget.

[Demeter]

31. Inconceivable!--Vizzini

I think that's going to be my new signature line.

[tclambert]

59. "You keep using that word. I do not think it means what you think it means. "--Inigo Montoya

There are so many good quotes from that movie, I just wasted ten minutes on imdb reminiscing. Got the DVD around here somewheres, too . . .

[Demeter]

60. Exactly

[Danascot]

83. Buttercup: We'll never survive.

Westley: Nonsense, you're only saying that because no one ever has.

Lots more:

http://www.uselessmoviequotes.com/umq_p005.htm

[spotbird]

37. Why did Madoff plead guilty?

The official story that he was protecting his family doesn't make sense. If he wasn't going to cooperate with prosecutors, he could have stayed out of jail, not cooperating, while awaiting trial. It may have taken years for the trial to start, so what was the rush? The government couldn't force him to turn on his wife and kids during a trial. Even if he was found guilty at trial (all but certain) he would then be in the same position he is in now, only two years down the road.

The early plea didn't help his family or himself. What was the real reason?

[Demeter]

43. What Was He Trying To Pull?

Maybe in jail he's safe from the BFEE or the Israelis. HAHAHAHAHAHA! What a sucker!

[Dr.Phool]

53. I read years ago, that the mob was infiltrating Wall Street.

I guess protective custody beats a bullet in the head. Or your wife and kids floating down the Hudson without an airplane.

[tclambert]

92. One theory, here on DU somewhere, maybe on a previous SMW thread, was that Madoff's guilty plea

would stop further investigation, or at least cut down further investigation, since the case is closed on certain charges. They can pursue additional charges, of course. But why investigate a case that was already resolved? You can't find him super extra guilty. In that post, if I recall right, the poster complained that the judge let Madoff off too easy on the allocution part of his plea. That's the part where he states in court what exactly he is pleading guilty to. Well, it seems Madoff didn't reveal everything that he could have. The judge could have rejected his plea on that basis and insisted on a public trial at which witness testimony might have revealed many more details. But what judge would do that?

A key question is: Who else participated? Madoff's sons? Trial testimony or more thorough allocution might have helped uncover their involvement. Perhaps in that way, his plea helped protect his family.

Another possibility, though remote, might be that Madoff has reached the age where he's worried about his immortal soul and is trying to make amends before he dies. (But then why doesn't he tell the authorities where the remaining money is hidden?) Some people get religion when they hear the wings of the angel of death fluttering nearby. Has anyone heard if he recently received a distressing medical diagnosis?

[Demeter]

48. AIG: Preliminary thoughts on the tax bill FROM Krugman

http://krugman.blogs.nytimes.com/2009/03/20/aig/



1. It’s not the way you should make policy — it’s clumsy, and it will punish some innocent parties while letting the most guilty off scot-free

2. But — there wasn’t much alternative at this point. And for that I blame the Obama people.

I’ll leave to others the question of who knew or should have known that the bonus firestorm was coming; but it’s part of a pattern. At every stage, Geithner et al have made it clear that they still have faith in the people who created the financial crisis — that they believe that all we have is a liquidity crisis that can be undone with a bit of financial engineering, that “governments do a bad job of running banks” (as opposed, presumably, to the wonderful job the private bankers have done), that financial bailouts and guarantees should come with no strings attached.

This was bad analysis, bad policy, and terrible politics. This administration, elected on the promise of change, has already managed, in an astonishingly short time, to create the impression that it’s owned by the wheeler-dealers. And that leaves it with no ability to counter crude populism.

[Hugin]

50. Oh, boy! I've been waiting for this!

:bounce:

Thanks Demeter. :)

[Demeter]

54. You're Welcome, Hugin. As always

[Hugin]

58. Aw, I disagree with him.

This once, but, that's what discussion is all about.

Such a refreshing change from the Take it or leave the country bleating of the Right-Wing pundits.

[Demeter]

51. More Krugman

http://krugman.blogs.nytimes.com/2009/03/11/not-so-easing-wonkish/

Not so easing (wonkish)

There’s been a fair bit of buzz about a Goldman Sachs report (no link) suggesting that the Fed’s policy of “unconventional easing” — buying up lots of assets other than the usual Treasury bills — isn’t very effective. Specifically, GS estimates, based on market responses to Fed moves to date, that it would take between $1 trillion and $1.6 trillion of unconventional easing to accomplish as much as the Fed can achieve, in normal times, by cutting the Fed funds rate by 1 percentage point. And since GS’s estimate is that the Fed funds rate “should” be -6 percent, this means that the Fed has a problem.

One thing Noam Scheiber doesn’t mention in his summary above is the extent to which this result, if true, strikes at the heart of Ben Bernanke’s strategy for dealing with the crisis.

Intellectually, Bernanke and the Fed were prepared for this crisis — they have been gaming out what they would do if “it” happened here for years. And a key element of the strategy was altering the composition of the Fed’s balance sheet — that is, unconventional easing.

But that tool isn’t proving very potent.

[Demeter]

52. STILL More Krugman

http://krugman.blogs.nytimes.com/2009/03/20/fiscal-aspects-of-quantitative-easing-wonki

Fiscal aspects of quantitative easing (wonkish)

The big policy news this week has been the Fed’s decision to buy $1 trillion of long-term bonds, going beyond the normal policy of buying only short-term debt. Good move — but it’s probably worth pointing out that yes, this does expose the Fed, and indirectly the taxpayer, to some risks. And in so doing, it blurs the line between fiscal and monetary policy.

Now, the Fed isn’t taking on any serious default risk — Treasuries are backed by the full faith etc of the US government, and agency debt is de facto backed by the same, although the market doesn’t seem to believe that. Anyway, the Fed is for these purposes a government agency itself, so all this is debt between different parts of USG.

The Fed is, however, creating a new liability: the monetary base it creates to buy these bonds. In effect, it’s printing $1 trillion of money, and using those funds to buy bonds. Is this inflationary? We hope so! The whole reason for quantitative easing is that normal monetary expansion, printing money to buy short-term debt, has no traction thanks to near-zero rates. Gaining some traction — in effect, having some inflationary effect — is what the policy is all about.

The problem may come when the economy recovers, and inflation starts to become a problem rather than a hoped-for outcome. Basically, there will come a time when the Fed wants to withdraw that extra $1 trillion of money it created. It will presumably do this by selling the bonds it bought back to the private sector.

But here’s the rub: if and when the economy recovers, it’s likely that long-term interest rates will rise, especially if the Fed’s current policy is successful in bringing them down. Suppose that the Fed has bought a bunch of 10-year bonds at 2.5% interest, and that by the time the Fed wants to shrink the money supply again the interest rate has risen to 5 or 6 percent, where it was before the crisis. Then the price of those bonds will have dropped significantly.

And this also means that selling the bonds at market prices won’t be enough to withdraw all the money now being created. So the Fed will have to sell additional assets; if the rise in interest rates is at all significant, it will have to get those assets from the Treasury. So the Fed is, implicitly, engaged in a deficit spending policy right now.

My back of the envelope calculation looks like this: if the Fed buys $1 trillion of 10-year bonds at 2.5%, and has to sell those bonds in an environment where the market demands a yield to maturity of more than 5%, it will take around a $200 billion loss.

I’m not complaining; I think quantitative easing (it’s really qualitative easing, but I give up on trying to fix the terminology) is the right way to go. But we should go into it with our eyes open.

[Hugin]

61. Nineteen US states go after AIG (BBC)

Nineteen US states are demanding that insurance giant AIG reveal details of bonuses paid to executives, so they can take steps to recover the funds.

This comes after New York Attorney General Andrew Cuomo said AIG had given him such a list on Thursday.

The US House of Representatives has passed a bill to levy a tax of 90% on the big bonuses paid to people working at firms that have received state aid.

The $165m (£114m)(more like $450 Million as has been pointed out by DU's antigop) of bonuses have caused outrage across the US.

US President Barack Obama has denounced such bonuses, while even AIG boss Edward Liddy has described them as "distasteful".

http://news.bbc.co.uk/2/hi/business/7954942.stm

____________________________________________________________

[UpInArms]

62. This just really pisses me off:

02. Goldman CFO says it had no exposure to possible AIG failure
11:14 AM ET, Mar 20, 2009

03. Goldman was adequately hedged against AIG failure : CFO
11:14 AM ET, Mar 20, 2009

These people should be in prison.

I want all the money back from Goldman and AIG right now!

[Hugin]

64. Does the hedge against failure in #3 take the form of Timmeh?

et al?

Those guys?

Is that a 'hedge'?

[UpInArms]

66. Timmeh with a Helicopter named Hank?

inquiring minds want to know

[Demeter]

81. More Than a Hedge

that's like hiring Blackwater. A mercenary army.

[UpInArms]

63. US mass layoffs rise in February-Labor Dept

http://www.reuters.com/article/bondsNews/idUSN2034207820090320

WASHINGTON, March 20 (Reuters) - U.S. employers stepped up mass layoff actions in February, government data showed on Friday, hurt by the severe economic downturn.

The Labor Department said the number of mass layoffs -- defined as job cuts involving at least 50 people from a single employer -- rose by 542 in February from January to a seasonally adjusted 2,769.

The moves resulted in 295,477 workers losing their jobs.

The department said mass layoff announcements total 28,481 since the start of the recession in December 2007.

In February, mass layoffs in manufacturing increased by 497 to a seasonally adjusted 1,235, the department said. Such layoffs in all industries, including the manufacturing sector, rose to the highest levels since records started in 1995.

...more...

[antigop]

71. The rise and fall of AIG's Financial Products unit

http://tpmmuckraker.talkingpointsmemo.com/2009/03/the_rise_and_fall_of_aigs_financial_products_unit.php

As we delve into the back-story behind the collapse of AIG, we thought it might be useful to lay out some key factual information about the firm's Financial Products unit, known as AIGFP, whose disastrous credit default swaps brought the company to its knees. How and when did AIG Financial Products get started? Who ran it, and from where? How did it get into credit default swaps, and what exactly are they, anyway? And how did this group of derivatives traders eventually wind up bringing down one of the most admired financial firms in the world?

So here's a rundown of some of the key developments in AIGFP's tumultuous history -- many gleaned from a superb three-part December 2008 Washington Post series on the unit (parts 1, 2, and 3):

[Hugin]

72. Slightly off topic, antigop.

But, in IRL discussions with others 'Hedge Funds' have been identified as a possible candidate for the "Next Big Bubble". We can't identify their support mechanism outside of hubris.

What's your take on this? I know very little about them.

[antigop]

73. Hedge funds aren't exactly my area of expertise, Hugin.

Warren Buffett warned that Treasury securities are a bubble...

http://www.startribune.com/business/40567882.html

In his annual letter to Berkshire Hathaway shareholders released Saturday, Buffett wrote that "the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary" as the Internet bubble of the late 1990s and the recent housing bubble.

But many market participants believe the surge in Treasury prices is driven by economic fundamentals, and moreover that there are few other places to hide right now.

"We can't identify their support mechanism outside of hubris." You definitely have a way with words, Hugin. Without transparency as to how these guys operate, I really don't know.

[MattSh]

79. You know very little about them?

Congratulations. YOU are fully qualified to run a Hedge Fund yourself.

No financial experience required. Just an ability to identify fools who need to be parted from their money.

[DemReadingDU]

86. CNBC: Rep Brad Sherman (D-Ca)

Great video, appx 6.5 minutes

http://www.cnbc.com/id/15840232?video=1067075944&play=1

Edit:
The bill to tax bonuses 90% is a step in the right direction
AIG should be in receivership
Salaries shouldn't be more than what Geithner is paid
and more...

Denninger: Brad Sherman: HE GETS IT!
http://market-ticker.denninger.net/archives/887-Brad-Sherman-HE-GETS-IT!.html

[specimenfred1984]

87. Excellent article posted by "chimpymustgo"

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/2

---The Big Takeover
The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution---

[DemReadingDU]

89. Matt Taibbi is great

Thanks for posting

[Tansy_Gold]

95. ". . . . to stage a revolution"

Have these guys ever heard of "Be careful what you wish for. You might just get it."


TG

[ozymandius]

96. The End

Dow 7,278.38 Down 122.42 (1.65%)
Nasdaq 1,457.27 Down 26.21 (1.77%)
S&P 500 768.54 Down 15.50 (1.98%)
10-Yr Bond 2.625% Up 0.028
NYSE Volume 8,653,099,000
Nasdaq Volume 2,519,809,750

4:25 pm : The major indices held near the unchanged mark for the first half of the session, but a wave of selling pressure sent stocks into negative territory.

Despite the 2.0% decline in the S&P 500, it was an overall slow session with no economic data, or major corporate news items. Trading was choppy and volume was on the heavy side, with 2.15 billion shares exchanging hands on the NYSE, due to the quarterly expiration of stock options, index options, index futures and single stock futures.

The headline event of the session, a speech by Ben Bernanke on the financial system, didn't give the market any big surprises. Bernanke said that issue of "too-big-to-fail" companies need to be addressed, as firms became complacent in their risk management. While he feels the government has had no real alternative to preventing failures, he does feel there are efforts that can be made going forward.

Bernanke feels we must "vigorously address the weaknesses at major financial institutions with regard to capital adequacy, liquidity management, and risk management." In addition, Bernanke believes compensation needs to be matched to risk and attention must be placed to financial firms other than just banks.

Meanwhile, at the same conference, FDIC Chairman Bair said that the fee hikes for banks on FDIC insured accounts is necessary to prevent the reserve from falling to zero.

Eight of the ten sectors posted a loss. Financials (-5.3%) fell the most, but are still up 40% since March 6. The industrial sector was also a laggard, with GE (9.51, -0.62) dropping despite several brokerages making positive comment about the company's liquidity and capital positions following yesterday's GE Capital business update.

Defensive sectors, which are underperformed for the week, outperformed this session. Consumer staples rose 0.1% and healthcare gained 0.2%.

For the week, the Dow, Nasdaq and S&P 500 rose 0.8%, 1.8% and 1.6%, respectively.DJ30 -122.42 NASDAQ -26.21 SP500 -15.50 NASDAQ Adv/Vol/Dec 887/2.41 bln/1868 NYSE Adv/Vol/Dec 751/2.15 bln/2307

[skoalyman]

101. redux part 2or is it three can't remember

seems traders are loosing confidence in the market darn that post LSD crash,next stop 6,999.99 again all aboard:popcorn: