STOCK MARKET WATCH, Thursday April 9

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday April 9, 2009

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

AT THE CLOSING BELL ON April 8, 2009

Dow... 7,837.11 +47.55 (+0.61%)
Nasdaq... 1,590.66 +29.05 (+1.86%)
S&P 500... 825.16 +9.61 (+1.18%)
Gold future... 885.90 +2.60 (+0.29%)
30-Year Bond 3.66% -0.07 (-1.88%)
10-Yr Bond... 2.85% -0.06 (-2.13%)

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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

[Demeter]

1. HI There, Ozy!

Very colorful cartoon today.

[ozymandius]

3. Good morning, Demeter.

:donut:

I went for color and a bit of snark with the choice of cartoon. It's well done, IMO. It was the only cartoon to make me smile - a little.

[ozymandius]

2. Market WrapUp

Possible vs. Probable:
"So you're telling me there's a chance!"
BY CHRIS PUPLAVA

In last week’s article, “Fixed on the VIX,” I highlighted how important the VIX is as a valuable technical as well as fundamental indicator as it shows a strong correlation to many other indicators (ISM reports, employment, S&P 500, bond spreads, etc…). For this reason the resolution of the VIX to break either its declining trend line or lower trend line would be sending investors a strong signal. Currently the VIX is testing support at its lower trend line and we should have resolution of a breakdown or breakout soon as the two trend lines are converging.

....

To make a clear distinction between possible and probable events we can turn to statistics, which helps place a quantitative number (probability) for a particular outcome. To do this we can use the normal distribution which “can be used to describe, at least approximately, any variable that tends to cluster around the mean” (Wikipedia). The area under the curve is used to give the associated probability for the data to fall within particular values.

For example, 95% of observations should lie within 1.98 standard deviations (a measure of dispersion about the mean), and 99% of observations should lie within 2.58 standard deviations from the mean. People will often use descriptions such as a “100-year storm” or statistics to show how rare a particular event is. An event that is more than or less than three standard deviations should occur only 1/10 of 1% of the time (0.001), while an event more than or less than four standard deviations from the mean (average) should occur only 0.0032% (0.000032) of the time. A normal distribution is shown below along with the standard deviations (z-scores) and associated probabilities.

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

[Hawkowl]

85. Puplava

This guy does an outstanding statistical/technical analysis. I think people should take away that we are currently in a bear market rally that will probably peak in the next 4-6 weeks (if it hasn't already), followed by another plunge. Hard to know if we set new lows or not. If we believe that the current markets are paralleling the Great Depression, (which he gives "uncanny" evidence they are), then yes the slide will reach new lows followed by another bear market rally.

Thanks for posting the link!

[ozymandius]

4. Today's Reports

08:30 Export Prices ex-ag. Mar
Briefing.com NA
Consensus NA
Prior 0.1%

08:30 Import Prices ex-oil Mar
Briefing.com NA
Consensus NA
Prior -0.6%

08:30 Initial Claims 04/04
Briefing.com 650k
Consensus NA
Prior 669K

08:30 Trade Balance Feb
Briefing.com -$37.0B
Consensus -$36.5B
Prior -$36.0B

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

[UpInArms]

54. Same-Store Sales looking bad for March

02. Target March same-store sales down 6.3%
8:26 AM ET, Apr 09, 2009

03. TJX sees Q1 EPS at high end of 23-38 cent range
8:24 AM ET, Apr 09, 2009

04. TJX March same-store sales up 2%
8:23 AM ET, Apr 09, 2009

05. March sales offer mixed signals
8:22 AM ET, Apr 09, 2009 - By Andria Cheng

06. Aeropostale same-store sale miss target, but profit to beat
8:21 AM ET, Apr 09, 2009 - By Steve Gelsi

07. BJ's same-store sales in March worse than seen
8:21 AM ET, Apr 09, 2009 - By Deborah Levine

08. CORRECT: Abercrombie & Fitch March same-store sales off 34%
8:18 AM ET, Apr 09, 2009

09. Abercrombie & Fitch March same-store sales down 34%
8:17 AM ET, Apr 09, 2009 - By Moming Zhou

[ozymandius]

59. I've noticed stores are holding less inventory on their shelves, racks.

I thought, maybe, one of our local major discounters was going out of bidness because, in January, there were empty shelves in one corner of the store. Have you seen this? The emptiness progresses like locusts have picked the shelves clean in stores beginning the liquidation process. Happy to note: they are not going out-of-bidness. There's just less stuff.

I bought some Abercrombie pants a few days ago. They fit and look great. I don't wanna know how much they would cost at the store of origin. They cost me five bucks at Goodwill.

[Dr.Phool]

71. I went to Costco a couple of days ago.

A lot of items that I buy there, that I can find only there, were gone. Other sections were really shrunk.

I did manage to snag a DVD of Dr. Strangelove for $7.99.

[AnneD]

83. Morning Marketeers.....

:donut:and lurkers.....I know what you mean Dr. Pool. I snagged a copy myself along with The Day the Earth Stood Still (as you may have guessed-I am a SciFi junkie). I have been in the process of converting my video library to DVD. I also got a book 1000 movies to see before you die. I have been using it as a guide line. I got Once this week along with a few other titles for this month. I also saw Harold and Maude for the first time earlier this week. Now I understand what everyone was raving about. I have getting most of my movies in the $5-7 range. My fav deal-Child of Men $4 at WalMart

As I think back- I realize what a film buff I really am. It was something that I could take my daughter to that wasn't too expensive (afternoon shows and we took our own refreshments). We would really do an autopsy on them afterward...what did you like, what alternative endings or casting would you do. We would end up with a different story sometimes. I think that had more of an influence on her than I thought.

She is choreographing and scoring a dance project for one of her dance friends and it will be video taped (with some fancy camera work)by another friend. This is one of those cross pollination classes that tries to get people from different disciplines together and do a project. She said she will be finished this year but she is going to ask for another year of these classes. She wants to work with some cartoonist and claymation or Pixar next. I bet she will wheedle her way in. She said she wants to get an internship over at Pixar to see what that is all about. We will hope for the best. I can't access you tube here at work but I will post her work (I can just hear her fussing at me now).

I am sad to say-I find more joy in the works of honest young kids than the schemes of deceitful old men.

Happy hunting and watch out for the bears.

Edited to add..in addition to the less product-I am starting to see less variety too.

[tclambert]

95. What!? I gotta get to Costco. That's my favorite movie.

Yet I'm too cheap to pay full price for it. Let's see, to get to your Costco is a 1200 mile drive. Maybe they have it at one closer. And then there's the problem that I let my Costco membership lapse.

Someone should be able to make a Dr. Strangelove version of this recession. "You must bail out our banks, or it will trigger the DOOOMSDAY DEVICE!" CDS = Cobalt Thorium G. Geithner = General Buck Turgidson. Cassano = General Ripper. Or maybe Geithner is Major Kong (Slim Pickens), determined to ride the Bomb all the way down.

[Wednesdays]

82. I've been noticing that trend for almost a year now

And I thought it might have been just my imagination. Although I haven't seen the empty shelves, I have noticed things are a whole lot "roomier" in all sorts of non-food stores (in other words, there's not so much stuff stacked up in the aisles, end caps, etc.), and the massive "floor-to-ceiling" racks of shelves are now coming down to eye level or even waist level.

[Warpy]

86. I've noticed inventory tightening, too

something I haven't seen since the 70s.

Remember, a recession is where a lot of folks don't have enough money to buy anything.

A depression is when they have no place to buy it.

[UpInArms]

57. Initial Claims @ 654,000 - last wk rev'd up 5k - trade gap drops to $26 billion, lowest since 1999

04. U.S. Feb. trade gap drops to $26 billion, lowest since 1999
8:30 AM ET, Apr 09, 2009

05. U.S. Feb. trade gap much lower than $36.2 billion forecast
8:30 AM ET, Apr 09, 2009

06. U.S. Feb. imports down 5.1% to $153B, lowest in 4 years
8:30 AM ET, Apr 09, 2009

07. U.S. Feb. exports rise 1.6% to $127B, first gain since July
8:30 AM ET, Apr 09, 2009

08. U.S. Feb. Japanese imports fall to 21-year low
8:30 AM ET, Apr 09, 2009

09. U.S. Feb. real trade deficit falls to 8-year low
8:30 AM ET, Apr 09, 2009

10. U.S. Feb. Chinese imports fall to 3-year low
8:30 AM ET, Apr 09, 2009

16. U.S. weekly initial jobless claims fall 20,000 to 654,000
8:30 AM ET, Apr 09, 2009

17. U.S. 4-week average initial claims fall 750 to 657,250
8:30 AM ET, Apr 09, 2009

18. U.S. ongoing jobless claims rise 95,000 to record 5.84 mln
8:30 AM ET, Apr 09, 2009

19. U.S. 4-week avg ongoing claims up 146,750 to record 5.65 mln
8:30 AM ET, Apr 09, 2009

20. U.S. March import prices rise 0.5%, as expected
8:30 AM ET, Apr 09, 2009

21. U.S. import prices down record 14.9% in past year
8:30 AM ET, Apr 09, 2009

[truthisfreedom]

5. Can someone help me with terminology?

Thanks.

Can you explain "underweight" and "overweight" in this context?

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

The brokerage raised its recommendation on manufacturing companies to “overweight” and that on technology and travel shares to “neutral.”

The team downgraded their stance on some industries that are less geared to economic growth. Drugmakers were cut to “neutral” and food and beverage makers were reduced to “underweight.”

[ozymandius]

8. Here ya go.

Investopedia explains Underweight:
1. Portfolio managers can make the securities underweight if they believe will underperform when compared to other securities in the portfolio. For example consider a security in the benchmark portfolio with a weight of 10%. If the manager believes the security will underperform over a certain time period, they will allocate the security a weight of less than 10% for that period, in hopes of increasing the portfolios expected return.

2. An example of an analysts underweight definition is: The stock's return is expected to be below the average return of the industry over the next eight to 12 months. Analyst's definitions vary regarding the time frame used and the benchmark the security is compared against.

Investopedia explains Overweight:
1. Securities will usually be overweight when a portfolio manager believes that the security will outperform other securities in the portfolio. An example of overweighting a security would be when a portfolio normally holds a security at a weight of 15%, and the security's weight is raised to 25% in an attempt to increase the returns of the portfolio.

2. An example of an analyst's rating of overweight would be: The stock's return is expected to be above the average return of the overall industry over the next eight to 12 months. Specific analyst definitions vary regarding the time frame used and the benchmark the security is compared against.

[Demeter]

10. Stop! You're Making My Brain Hurt!

Why don't we talk about Schrodinger's Wave Equation, instead? That has some useful results.

[ozymandius]

13. Now you're making -my- brain hurt.

Might we agree to talk about unicorns and faeries?

Edit: Honestly though, the definitions seem useful in their psychological aspects that benefit the reputation of a fund manager.

[Dr.Phool]

16. Here, kitty, kitty, kitty.

[Demeter]

18. Dead Cats Won't Answer, Even With Lobster

[tclambert]

21. But what if the cat is sumultaneously alive?

Oh, wait! It's trapped in Schrodinger's box.

[Dr.Phool]

26. We'd better look, and find out.

[Tansy_Gold]

70. And if it's only mostly dead but not totally dead do we call Miracle Max?

I dunno :shrug: because sometimes I get the nagging niggling noise in the back of my head that whispers "maybe you're wrong and they're right."

None of what's happening right now makes any sense in a sane world as I know it. The bailouts, the anti-protectionism, the lack of collective anger, the faith in the faithless.

So is it possible we're wrong and the cat is alive?




Tansy Gold, who does have her moments of doubt

[ozymandius]

72. Miracle Max works for Prince Geithnerdink now.

All he produces is rotten miracles.

[Demeter]

73. I'm Really Beginning To Regret My Theme Weekends

Just saying....

[Dr.Phool]

78. I'm with you. You have to figure out the reasons behind their actions.

Once you get it in the proper context, you'll know.

When I was working on the railroad, and we serviced, and were owned by LTV Steel. Prior to that, we were part of Republic Steel.

LTV had emerged from bankruptcy, stronger than ever, and was a profitable company. They had almost a billion dollars cash on hand, and were making money, hand over fist in late 1999. Then things started getting weird. They started doing stupid shit. They overpaid for acquisitions that made no sense. They opened a mini-mill in the south, with no infrastructure to support it. They made work procedures, that ate up time and money that made no sense.

They hired management that had no qualifications.

I was on the Union bargaining committee, and I was thinking out loud at a meeting, that everything they're doing, makes no sense, unless, they are deliberately trying to run the company into the ground. They filed Chapter 11 a year later, and all the upper guys took their golden parachutes and trust fund pensions and fled.

They appointed a guy for CEO, who ran Diamond Shamrock into the ground by dumping $1 billion into a dry hole in Alaska. They pretty much gave him a salary of a million dollars to take the heat for a year as it collapsed. They ran through all their available cash, and rebuilt parts of the mill on what was left of their credit. They then filed for liquidation, and royally fucked all of their suppliers and contractors.

This was at the end of 2001.

They were going to let the blast furnaces cave in, in fact they tried to do it in the middle of the night, but a friend of mine alerted Dennis Kucinich to their plan, and he jumped all over them.

The mills shut down. Two days later, enter Wilbur Ross.

Was this a set-up, or what?

[Hawkowl]

87. Sopranos

It is as if the mafia has taken over our legitimate economy and is deliberately trashing it to make a fast buck simply because it's easier. Many companies now resemble this scenario, United Airlines particularly comes to mind, where the companies own so much money to the loan sharks (Citibank etc) that the sharks put in one of their henchman to run the company into the ground while selling off assets and looting pensions.

We have moved from corporatocracy to kleptocracy. We are in the process of becoming Zimbabwe.

[Dr.Phool]

88. I wandered into GD yesterday and actually heard people defending

Payday lenders and 390% "short-term" interest rates.

[Hawkowl]

89. Sigh.

I really just don't recognize GD anymore. The indefensible is now common wisdom, merely with the election of a new president. The cult of the persona over ideas I guess.

[Tansy_Gold]

101. I wander into other threads occasionally and I've taken the

extraordinary action of actually alerting on some of the worst offenders. I can't say I've gotten anyone removed from DU, but I have seen a number of the really horrible posts removed.

The alert button is my friend.



TG

[tclambert]

96. I was gonna say on the Sopranos they called that a "bust-out."

Dey did dat ta Davey Scatino's (Robert Patrick's) sportin' goods store. They made him run up a huge debt he couldn't pay buying up merchandise that they walked away with.

[UpInArms]

80. just continuing on Dr. Phool's commentary

when everything points to the same conclusion - ergo the "mistakes" and "errors" and the "no one could have imagineds" - whether it be a grand plan or a giant screw-up - you have to wonder, does it matter if it is caused by stupidity or if it is caused by greed?

I am reminded of this quote:

Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has. ~~ Margaret Mead

and think - she doesn't reference that the small group can cause an awful lot of evil

[AnneD]

84. The bailouts the anti-protectism.....

the lack of collective anger, the faith in the faithless, the alternate universes, and parallel dimensions....

Yes Tansy...THE CAT IS STILL ALIVE!

[Demeter]

6. Ten principles for a Black Swan-proof world By Nassim Nicholas Taleb

http://www.ft.com/cms/s/0/5d5aa24e-23a4-11de-996a-00144feabdc0.html


Published: April 7 2009 20:02 | Last updated: April 7 2009 20:02

1. What is fragile should break early while it is still small. Nothing should ever become too big to fail. Evolution in economic life helps those with the maximum amount of hidden risks – and hence the most fragile – become the biggest.

2. No socialisation of losses and privatisation of gains. Whatever may need to be bailed out should be nationalised; whatever does not need a bail-out should be free, small and risk-bearing. We have managed to combine the worst of capitalism and socialism. In France in the 1980s, the socialists took over the banks. In the US in the 2000s, the banks took over the government. This is surreal.

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus. The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. It is irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess. Instead, find the smart people whose hands are clean.

4. Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks. Odds are he would cut every corner on safety to show “profits” while claiming to be “conservative”. Bonuses do not accommodate the hidden risks of blow-ups. It is the asymmetry of the bonus system that got us here. No incentives without disincentives: capitalism is about rewards and punishments, not just rewards.

5. Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products. The complex economy is already a form of leverage: the leverage of efficiency. Such systems survive thanks to slack and redundancy; adding debt produces wild and dangerous gyrations and leaves no room for error. Capitalism cannot avoid fads and bubbles: equity bubbles (as in 2000) have proved to be mild; debt bubbles are vicious.

6. Do not give children sticks of dynamite, even if they come with a warning . Complex derivatives need to be banned because nobody understands them and few are rational enough to know it. Citizens must be protected from themselves, from bankers selling them “hedging” products, and from gullible regulators who listen to economic theorists.

7. Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”. Cascading rumours are a product of complex systems. Governments cannot stop the rumours. Simply, we need to be in a position to shrug off rumours, be robust in the face of them.

8. Do not give an addict more drugs if he has withdrawal pains. Using leverage to cure the problems of too much leverage is not homeopathy, it is denial. The debt crisis is not a temporary problem, it is a structural one. We need rehab.

9. Citizens should not depend on financial assets or fallible “expert” advice for their retirement. Economic life should be definancialised. We should learn not to use markets as storehouses of value: they do not harbour the certainties that normal citizens require. Citizens should experience anxiety about their own businesses (which they control), not their investments (which they do not control).

10. Make an omelette with the broken eggs. Finally, this crisis cannot be fixed with makeshift repairs, no more than a boat with a rotten hull can be fixed with ad-hoc patches. We need to rebuild the hull with new (stronger) materials; we will have to remake the system before it does so itself. Let us move voluntarily into Capitalism 2.0 by helping what needs to be broken break on its own, converting debt into equity, marginalising the economics and business school establishments, shutting down the “Nobel” in economics, banning leveraged buyouts, putting bankers where they belong, clawing back the bonuses of those who got us here, and teaching people to navigate a world with fewer certainties.

Then we will see an economic life closer to our biological environment: smaller companies, richer ecology, no leverage. A world in which entrepreneurs, not bankers, take the risks and companies are born and die every day without making the news.

In other words, a place more resistant to black swans.

The writer is a veteran trader, a distinguished professor at New York University’s Polytechnic Institute and the author of The Black Swan: The Impact of the Highly Improbable

[Dr.Phool]

22. This deserves it's own post, Demeter. Probably in Editorials.

[Demeter]

24. they'd never let me post the entire thing

I'm surprised I get away with it in WEE.

[tclambert]

27. I love his use of language. Very descriptive, understandable, and colorful.

I'm gonna hafta look for his "Black Swan" book. This guy has insight, wisdom, and real skill explaining his ideas.

[Demeter]

29. All of These Qualities Make Him Totally Unsuitable for Public Office

or official posting. Sigh.

[Ghost Dog]

32. Yeah. "An economic life closer to our biological environment..." Guy's a nut,

obviously, fit only for the scrapheap.

:sarcasm:

[Demeter]

7. Scrap the Summers-Geithner plan By Laurence J. Kotlikoff

http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/04/07/scrap_the_summers_geithner_plan/?page=full

IT'S ONE thing for the US Treasury Department to overpay banks for their toxic assets on the prayer that bank shareholders will do something besides pocket it - something that will help the economy. It's another thing to set up a complex leveraged auction scheme to surreptitiously make the transfer. And it's yet a third thing to set up a scheme that will lead the banks to overbid for their own toxics to garner even larger windfalls and end up with the toxics still in their hands.

HUMOROUS EXPLICATION AT LINK

Laurence J. Kotlikoff is a professor of economics at Boston University.

[Demeter]

9. When the Next Banking Scandal Hits...

http://www.huffingtonpost.com/mike-lux/when-the-next-banking-sca_b_184073.html

The way Tim Geithner has structured the banking plan, the Obama administration will, sooner or later, almost certainly be facing another AIG bonuses-type of outrage. For example, Dean Baker told me that his biggest fear is that some sleazy character will make a fortune off the leverage given by the government, or that a bank will arrange an insider deal under which a front buys its assets at an inflated price, leaving the government with a big loss.

If this happens, I can already hear the cries of the faux populists in the Republican Party, those same folks who created this crisis with their opposition to regulatory oversight of Wall Street. If they were still in charge, we'd be having one of these kinds of scandals every week. But they will be full of howling indignation that Obama let this happen.

Those of us who are opposing this bank plan, in part because we are worried of just these kinds of scandals described above, will need to restrain ourselves from doing too much I-told-you-so-ing, because we will need to be helping to save the Obama team from themselves. We need to be ready, though, to step into the moment with our own very aggressive plan to put the banks into receivership and break them up. No matter how populist Republicans will want to pretend they are, they will never be willing to actually do something that progressive. If Obama is willing to go there, and do it decisively, it will help Obama to get over all the recriminations and saber-rattling that inevitably happens in such a moment.

I very much wish that Obama was moving bolder and more progressive in dealing with the banking crisis. To paraphrase a friend, I feel like he is giving mouth-to-mouth resuscitation to a system that needs to die. But if we are to get through the problems that will almost inevitably come from the Obama/Geithner plan, those of us who want to save Obama's agenda need to be ready with a strategy to turn things around ASAP when another scandal flares.

[ozymandius]

20. "mouth-to-mouth resuscitation to a system that needs to die"

He's on the mark here. It really is only a matter of "when" not "if" it is discovered that banks are gaming the bailout. As a matter of fact - evidence of just that sort of activity was pointed out here at the SMW just last week. There was also prescient information about this a few days earlier, posted by radfringe.

It's moronic, really, not to expect this to happen. Every loophole from every favor is eventually exploited.

[snot]

35. is there any way

we could, like, add our voices to yours, to help increase the odds that yours might be heard?

I'm v. serious. I read Cassandra here every day, and Obama doesn't. Could we think totally out of box re- what we might be able to do that might make him hear you?

[Demeter]

38. If We Could Roust the DLC and Blue Dogs--Take Over the Party

we'd have a chance of being heard. Anything less is down in the noise.

[ozymandius]

40. *sigh* I don't know.

If you read almost every word posted here every day - one indelible trait emerges. The net sum of all opinions and analysis posted here is right wayyyy more than it is wrong. I am not so vain as to pronounce that we have all answers to all problems. Because we (the collective "we" including the random drive-by posters) do not have the market cornered on the gestalt of economic knowledge. But where you will not find answers, you will find good questions.

So what to do? I write my Congressional representatives. Too bad that I am represented by two Senators from the Do-Nothing Party. But I keep writing. Maybe Sens. Chambliss and Isakson will get tired of repeating the same drivel over and over again.

Obama, I believe, receives bad advice. Geithner and Summers are supposed to know what they're doing. After all, it was their misguided action and inaction that made this mess. But they are victims of cognitive capture. They are owned by the banks. If Obama gets his ideas from people who cannot get their minds out of the fucking box then what we have seen is about all we can expect: more dithering and massive supplementals so that we can pretend that our banks are free market enterprises.

I know that Obama reads ten "letters to the President" every day - personally. Maybe sending an avalanche of mail (in Harry Potter style) will finally get through to him.

[Demeter]

52. If Secret Service Doesn't Shoot Down the Owls

[ozymandius]

11. Oil above $51 on signs of higher US consumption

VIENNA – Oil prices rose above $51 a barrel Thursday as upbeat reports from some U.S. retailers suggested Americans may be willing to spend more once again.

Oil has traded near $50 over the last week as investors sought to gauge the health of the U.S. economy as it reels from its worst recession in decades.

....

U.S. crude inventory numbers were mixed. For the week ended Friday crude supplies increased by 1.7 million barrels to 361.1 million barrels, 15.2 percent above year-ago levels, the Energy Department's Energy Information Administration said in its weekly report on Wednesday.

Analysts expected a boost of 2.3 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

....

In other Nymex trading, gasoline for May delivery more than 4 cents to $1.48 a gallon and heating oil gained close to 3 cents to fetch $1.43 a gallon. Natural gas for May delivery was up by just over a penny at $3.64 per 1,000 cubic feet.

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

[UpInArms]

43. May crude up $1.39 at $50.77 a barrel on Globex

05. May crude up $1.39 at $50.77 a barrel on Globex
7:52 AM ET, Apr 09, 2009

[Festivito]

12. Debt: 04/07/2009 11,152,772,833,835.89 (UP 3,426,062,753.08) (Tiny again.)

(The public debt is up 12% of a single billion, i.e. a tiny amount.)

= Held by the Public + Intragovernmental(FICA)
= 6,868,729,876,036.67 + 4,284,042,957,799.22
UP 123,552,400.07 + UP 3,302,510,353.01

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 306,122,143 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,432.43.
A family of three owes $109,297.28. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 32 days.
The average for the last 23 reports is 8,747,588,042.47.
The average for the last 30 days would be 6,706,484,165.89.
The average for the last 32 days would be 6,287,328,905.53.
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$/day.
There were 54 reports in 77 days of Obama's part of FY2009 averaging 0.71B$ per report, 0.59B$/day so far.
There were 129 reports in 189 days of FY2009 averaging 8.74B$ per report, 5.97B$/day.

PROJECTION:
There are 1,384 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 19.9T$.
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)
04/07/2009 11,152,772,833,835.89 BHO (UP 525,895,784,922.81 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,128,047,936,923.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********
03/25/2009 +000,059,898,960.86 ------------*******
03/26/2009 +007,175,786,187.90 ------------*********
03/27/2009 -000,468,145,936.78 ---
03/30/2009 +000,069,902,880.68 ------------******* Mon
03/31/2009 +079,841,314,678.25 ------------**********
04/01/2009 -001,742,860,350.87 --
04/02/2009 +007,764,243,786.78 ------------*********
04/03/2009 +028,967,677,130.84 ------------**********
04/06/2009 +000,073,808,356.95 ------------******* Mon
04/07/2009 +000,123,552,400.07 ------------********

126,725,846,778.73 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,488,141,030,576.82 in last 201 days.
That's 1,488B$ in 201 days.
More than any year ever, including last year, and it's 146% of that highest year ever only in 201 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 201 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=3821239&mesg_id=3821268

[Festivito]

92. Debt: 04/08/2009 11,145,352,700,191.57 (DOWN 7,420,133,644.32) (Up little, FICA down.)

(The public debt is up a small 50-million, the FICA side is down seven billion.)

= Held by the Public + Intragovernmental(FICA)
= 6,868,780,515,493.62 + 4,276,572,184,697.95
UP 50,639,456.95 + DOWN 7,470,773,101.27

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 306,128,315 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,407.45.
A family of three owes $109,222.36. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 33 days.
The average for the last 24 reports is 8,073,932,972.19.
The average for the last 30 days would be 6,459,146,377.75.
The average for the last 33 days would be 5,871,951,252.50.
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$/day.
There were 55 reports in 78 days of Obama's part of FY2009 averaging 0.59B$ per report, 0.52B$/day so far.
There were 130 reports in 190 days of FY2009 averaging 8.62B$ per report, 5.90B$/day.

PROJECTION:
There are 1,383 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 19.3T$.
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)
04/08/2009 11,145,352,700,191.57 BHO (UP 518,475,651,278.49 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: 1,120,627,803,279.10 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********
03/25/2009 +000,059,898,960.86 ------------*******
03/26/2009 +007,175,786,187.90 ------------*********
03/27/2009 -000,468,145,936.78 ---
03/30/2009 +000,069,902,880.68 ------------******* Mon
03/31/2009 +079,841,314,678.25 ------------**********
04/01/2009 -001,742,860,350.87 --
04/02/2009 +007,764,243,786.78 ------------*********
04/03/2009 +028,967,677,130.84 ------------**********
04/06/2009 +000,073,808,356.95 ------------******* Mon
04/07/2009 +000,123,552,400.07 ------------********
04/08/2009 +000,050,639,456.95 ------------*******

126,539,063,397.49 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,480,720,896,932.50 in last 202 days.
That's 1,481B$ in 202 days.
More than any year ever, including last year, and it's 146% of that highest year ever only in 202 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 202 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=3823060&mesg_id=3823083

[Ghost Dog]

14. Asia stocks gain on techs

HONG KONG (Reuters) - Asian stocks pushed back toward a six-month high on Thursday as technology shares resumed their rally, while Japan's surprisingly big stimulus spending and signs of stabilizing economic activity drove up government bond yields.

...

Japan's Nikkei share average (Osaka:^N225 - News) jumped 3.7 percent after the government announced a bigger-than-expected stimulus package of $154 billion, or about 3 percent of GDP. The news hurt Japanese government bonds on worries about big supply to pay for the spending.

...

The package will add to spending of 12 trillion yen already planned under previously announced stimulus measures, taking Japan's total stimulus spending to combat the global financial crisis to around 5.5 percent of GDP.

But the rally in shares, worries about bond supply and signs that some central banks may have finished cutting interest rates kept pushing up bond yields and swap rates across the region -- complicating the efforts of central banks to keep credit cheap.

The Bank of Korea kept rates on hold at 2 percent, a record low. The BOK said there was still room to cut rates but also that the economy was leveling off after its rapid decline.

The upbeat comments sparked a 4.3 percent rally in the KOSPI (KSE:^KS11 - News) to a six-month closing peak.

Some economic data around the region also provided hope for a recovery. Japanese core machinery orders posted a surprising increase of 1.4 percent in February from the previous month, while business surveys in China suggested the economy is steadying.

China remains the economic engine helping offset the collapse in exports across Asia thanks to its nearly $600 billion stimulus spending, which has spurred orders for technology goods across Asia.

"Recent data from China has been positive relative to expectations," said Patrick Bennett, Asia FX and rates strategist at Societe Generale in Hong Kong.

"The positive surprises in recent Australian, Korean, Taiwanese and Brazilian trade data have been underpinned by improving shipments to China."

Shares in tech-heavy Taiwan (Taiwan:^TWII - News) -- one of the best performing stock markets in the world this year -- helped lead the rise in Asia as companies such as contract chip maker UMC (Taiwan:2303.TW - News; NYSE:UMC - News) jumped on signs of improving demand.

The MSCI index of Asia-Pacific stocks outside Japan (^MIAPJ0000PUS - News) rose 3.2 percent, snapping a two-day fall and back near a six-month peak. Showing greater investor confidence, volumes rose on the hefty gains.

The MSCI index has now rebounded 31 percent from lows hit in early March.

/... http://finance.yahoo.com/news/Asia-stocks-gain-on-rb-14888261.html

[Ghost Dog]

15. Nikkei hits 3-mth closing high on stimulus plan

TOKYO, April 9 (Reuters) - Japan's Nikkei average climbed 3.7 percent to a three-month closing high on Thursday, with Sony Corp (6758.T) and other electronics firms cheered by an economic stimulus plan that spurred hopes of revived consumer spending.

Automakers and solar power-related firms gained after a draft of the ruling Liberal Democratic Party stimulus plan showed it will feature bigger than expected spending of 15.4 trillion yen ($154.5 billion) and contain measures to encourage the use of solar panels and fuel-efficient cars.

An additional boost came from stronger than expected machinery orders, a volatile figure seen as a leading indicator of corporate spending.

Analysts said the market was responding mainly to details of the economic plan, such as subsidies for fuel-efficient cars, rather than the total proposed amount of spending, which is 3.1 percent of GDP.

...

The benchmark Nikkei .N225 gained 321.05 points to 8,916.06, its highest close since early January. The benchmark has staged a sharp rebound from a 26-year closing low of 7,054.98 hit on March 10.

The broader Topix climbed 3.3 percent to 841.81.

In still more good news for the Nikkei, foreign investors -- key drivers of the Japanese market -- were net buyers of equities last week to the tune of 44.7 billion yen ($448 million), finance ministry data showed.

The stimulus plan also included a backup scheme in which a government body could potentially buy shares from markets with government guarantees for the programme of 50 trillion yen ($500 billion).

...

Among the steps in the draft stimulus plan was a move to help promote digital TVs, giving Sony shares an additional boost that helped them climb 7.8 percent to 2,480 yen.

"If there is the kind of proposed subsidy we're hearing about, this could have quite an impact on consumer buying and is inviting a positive response from investors," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

Other big gainers were Panasonic Corp (6752.T), which rose 4.5 percent to 1,281 yen and Toshiba Corp (6502.T), climbing 8.1 percent to 322 yen. Hitachi Ltd (6501.T) rose 6.8 percent to 316 yen.

The stimulus plan also lifted carmakers and solar power-related firms.

Toyota Motor Corp (7203.T), maker of the "Prius" hybrid car, rose 4.3 percent to 3,910 yen, Mitsubishi Motors Corp (7211.T), the only mass-volume carmaker with an electric car prototype on the road, climbed 2.1 percent to 148 yen.

Sharp Corp (6753.T), the world's No.2 maker of solar cells, surged 10.7 percent to 900 yen, while Kyocera Corp (6971.T), the world's No.4 solar cell maker, climbed 4.5 percent to 6,760 yen.

Komatsu Ltd (6301.T), the world's second-largest maker of earth-moving equipment, gained 6 percent to 1,235 yen, while Hitachi Construction (6305.T) rose 4.5 percent to 1,336 yen.

/... http://www.reuters.com/article/marketsNews/idCAT32845520090409?rpc=44&sp=true

See more on the LDP stimulus plan: http://www.reuters.com/article/companyNews/idUKT32518520090409?symbol=6753.T&sp=true

[Demeter]

17. Checkmate for Pensions? by Leo Kolivakis, publisher of Pension Pulse.

http://www.nakedcapitalism.com/2009/04/guest-post-checkmate-for-pensions.html

The FT reports that investment losses hit public sector pensions:

The crisis facing pension plans for US state and municipal employees is deepening as investment losses deplete the resources of retirement funds for teachers, police officers, firefighters and other local government workers.

The largest state and municipal pension plans lost 9 per cent of their value of more than $2,000bn in the first two months of this year, according to data from Northern Trust. That followed a loss of 30 per cent in 2008, equal to about $900bn. Smaller funds, which underperform the larger ones, lost more, experts say.

The losses have left retirement plans about 50 per cent funded – that is, they have only half the money needed to cover commitments to 22m current and former workers, experts say. State governments typically put the funding figures closer to 60-70 per cent, although most experts use different calculations.

“There is a massive national underfunding problem,” said Orin Kramer, chairman of the New Jersey pension fund. ”

Unlike company pension plans, state and municipal retirement funds have no federal guarantee fund. This has led to predictions of benefit cuts and possible federal intervention.

“The federal government will get involved, without question,” said Phillip Silitschanu, analyst at Aite Group, a consultancy. “They could provide federal loans, or demand cutbacks as a condition of stimulus money, or there could be a federalisation of some of these pensions.”

Without investment income, funds are liquidating assets at huge losses to pay pensions.

Police pensions are in especially poor shape, in part because states have promised earlier retirement on full pensions, but seldom increased contributions.

In late January, Terry Savage wrote that the pension tsunami is about to hit:

One day soon you may have to decide whose retirement comes first: yours or the fireman’s? Or the policeman’s? Or your child’s schoolteacher’s?

Your city and state have made generous pension promises to all those public servants—funded with your tax dollars. Only suddenly it turns out that those pensions aren’t very well-funded, after all!

While you’ve been worried about your shrinking 40l(k), our public servants have been smiling. They know their defined-benefits pensions are guaranteed by your local taxing body.

And while barely 20% of private-sector employees are eligible for defined-benefit pension plans, fully 90% of state and local workers get that coverage, according to the Federal Reserve Bank of Minneapolis.

But now, because of a combination of too-high estimates on investment returns, too-low annual contributions, and the current stock market losses, those pension funds are woefully underfunded!
...The National Bureau of Economic Research says the value of pension promises already made by US state governments will grow to approximately $7.9 trillion in just 15 years. But the same report points out that states are unlikely to be able to keep those promises: “We conservatively predict a 50% chance of aggregate underfunding greater than $750 billion and a 25% chance of at least $1.75 trillion in underfunding.” Put in current dollars, to bring those pension funds up to appropriate levels would cost almost $2 trillion. And while the Federal government can just “print” the money, the cities and states have no such option. That means we, the taxpayers, are facing hefty local tax hikes to pay for required pension plan contributions. Or we’ll face other cuts in state and municipal spending, for safety or education or Medicaid.

The Web site www.pensiontsunami.com has been tracking these issues as they arise around the country. California is the epicenter of the crisis for now—but this is certainly a national issue.
Could the cities and states simply default on their obligations when the time comes? At a recent Federal Reserve conference, attorney James Spiotto of Chapman and Cutler in Chicago noted: “There are varying levels of protection, ranging from strict constitutional rights to general statutory provisions, that might allow for some renegotiation of benefit levels in light of adverse conditions.” In other words, if the cities and states try to cut back on promised benefits, they will face a huge court battle.

Spiotto notes that since 1937, more than 564 cities have filed for Chapter 9 bankruptcy reorganization, which allows a city to renegotiate its union contracts and potentially abrogate previous pension deals. And while the federal Pension Benefit Guarantee Corporation protects at least some amount of private pension (up to $51,750 in 2008), there is no similar agency to protect public pensions.

As pension-fund losses are disclosed and the extent of the underfunding is revealed, unrest will mount. Do you think those firemen, and policemen, and teachers are going to keep working—knowing that there is a question about their pension at the end of the line? And as a taxpayer, are you willing to make up the difference?

Unfortunately, these are the issues I have been writing about for months. We have reached a dangerous level of underfunding in pension plans across the world and politicians have not addressed this issue. In fact, the pension crisis was totally ignored at the G20 last week.

And let there be no doubt, the scale of this problem is global. DISCUSSION OF STATE OF PENSIONS IN VARIOUS NATIONS...INCLUDING BRITAIN'S



I am not going to debate the solvency of the Pension Protection Fund, but I believe when the full fury of the pension tsunami hits, its solvency will be severely tested. And as I have written in this blog, the solvency of the U.S. Pension Benefit Guarantee Corporation will also be severely tested as corporate insolvencies skyrocket.

The weakest pension funds are the smaller ones because they are heavily exposed to stocks and typically lack the resources to navigate through this financial crisis. But the larger pension funds are not faring that much better.

And are you ready for the kicker? Reuters reports that at least a dozen U.S. public pension funds, including the nation's biggest, are mulling whether to put money behind the federal government's plans to rid banks' balance sheets of toxic assets: SO, INCLUDE PENSIONS IN BAILOUT BY HAVING THEM BUY FAIL-PROOF TOXIC WASTE FROM BANKS WITH TAXPAYER FUNDING? WHY NOT JUST GO TO A NATIONAL PENSION PROGRAM (AND BRING SOCIAL SECURITY PAYMENTS UP TO COST OF LIVING. IF IT'S ALL COMING OUT OF TAX REVENUES, THEN SHARE THE WEALTH EQUALLY)



Are you worried? You should be because the IMF warned today that toxic debt at global banks could spiral to $4 trillion: MORE DOOM AND GLOOM STATISTICS


Before pension funds throw billions of dollars behind the Geithner plan, we need a second opinion.

The pension tsunami has arrived and these dangerous policies will only exacerbate the pension crisis, enriching the financial oligarchs while the masses watch their retirement dreams turn into retirement nightmares.

If you ask me, it's checkmate for pensions.

[ozymandius]

36. As I said in Post #25

I pity decry the fool who hastens cash flow collapse by investing in the Geithner plan.

[MattSh]

19. Taking Delusion to the Next Level.

U.S. Imagines the Bailout as an Investment Tool

Published: April 8, 2009

Now, it seems, they will be asked to come to the aid of their banks — with the added inducement of possibly making some money for themselves.

As part of its sweeping plan to purge banks of troublesome assets, the Obama administration is encouraging several large investment companies to create the financial-crisis equivalent of war bonds: bailout funds.

The idea is that these investments, akin to mutual funds that buy stocks and bonds, would give ordinary Americans a chance to profit from the bailouts that are being financed by their tax dollars. But there is another, deeply political motivation as well: to quiet accusations that all of these giant bailouts will benefit only Wall Street plutocrats.

The potential risks — politically for the administration, and financially for would-be investors — are considerable.

The funds, the thinking goes, would buy troubled mortgage securities from banks, enabling the lenders to make the loans that are needed to rekindle the economy. Many of the loans that back these securities were made during the subprime era. If all goes well, the funds will eventually sell the investments at a profit.

But, as with any investment, there are risks. If, as some analysts suspect, the banks’ assets are worth even less than believed, the funds’ investors could suffer significant losses. Nonetheless, the administration and executives in the financial industry are pushing to establish the investment funds, in part to counter swelling hostility against the financial industry.

http://www.nytimes.com/2009/04/09/business/09fund.html?th&emc=th

[Demeter]

23. You Know, If It Was Manure on Farm Soil, Spreading It Around Would Be Productive

but spreading losses around the economy and contaminating previously unaffected portions of it are like spreading smallpox-infected blankets among the indigenous people. Genocide.

Or in the US, economic suicide/murder, like Jonestown.

[ozymandius]

25. I cannot adequately imagine the frightening level of burning hostility

emanating from pensioners should their futures be compromised with recycled toxic asset purchases diluting the value of their pension portfolios. Retribution, I'll wager, will be swift and severe.

[Demeter]

28. We need that swift and severe response BEFORE this starts

Like, back in 2008 with the Paulson buddy bailout. Which did happen, but couldn't be sustained in the face of Terra! Terra! Terra! with the Congress giving into fear and panic.

[snot]

37. that assumes they know/understand what was done to them . . .

[natrat]

69. nah, this is america, we just take it

[ozymandius]

30. Morgan Stanley earnings to be hurt by bonds: report

(Reuters) – Morgan Stanley's (MS.N) bottom line will be hurt by the recent rebound in its bond prices, the Wall Street Journal said.

On account of the accounting treatment on some bonds issued by Morgan Stanley before the financial crisis erupted, the company is expected to take a hit of $1.2 billion to $1.7 billion on the bonds when it reports its first quarter results later this month, the paper said, citing people familiar with the situation.

http://news.yahoo.com/s/nm/20090409/bs_nm/us_morganstanley_bonds

[Demeter]

31. Moody's strips Berkshire Hathaway of top rating

http://news.yahoo.com/s/nm/20090409/bs_nm/us_berkshire_rating_moodys_3


NEW YORK (Reuters) – Moody's Investors Service cut its credit ratings on Berkshire Hathaway Inc from Aaa, the top rating, saying the recession and investment losses at insurance operations of investor Warren Buffett's holding company reduced its ability to support funding needs.

Wednesday's cut to Berkshire's rating means Moody's no longer has a Aaa rating on any company with significant financial-services operations.

Moody's cut the ratings on Omaha, Nebraska-based Berkshire to Aa2, the third-highest investment grade, and cut to Aa1, the second-highest, its ratings on Berkshire's reinsurance subsidiary National Indemnity Co and bond insurance arm Berkshire Hathaway Assurance Corp.

The downgrades come more than a month after Berkshire reported a 62 percent drop in profit, the worst year since Buffett took over 44 years ago.

The outlook for all the ratings is stable, Moody's said, indicating an additional rating change is not anticipated over the next 12 to 18 months.

A Berkshire spokeswoman was not immediately available to comment.

The cut by Moody's comes nearly four weeks after Fitch stripped Berkshire of its top rating, saying it believed "AAA ratings are not appropriate at the holding company level for financial-oriented enterprises," lowering its rating to AA.

Fitch also raised so-called "key man risk," pointing to 78-year-old Buffett's lack of a publicly named successor.

Berkshire is still clinging to its triple-A rating from Standard & Poor's. But on March 25 S&P changed its outlook on Berkshire to negative, indicating a downgrade is now more likely.

S&P on Wednesday cut the ratings on all major U.S. mortgage insurers, saying the deterioration in the residential mortgage market had translated into greater delinquency rates than it had anticipated.

Moody's cut to Berkshire's ratings leaves only four other companies with its top rating: Johnson & Johnson (JNJ.N), Exxon Mobil Corp (XOM.N), Microsoft Corp (MSFT.O) and Automatic Data Processing Inc (ADP.O).

FINANCIAL FALLOUT

Analysts said Berkshire's downgrade reflected what investors already knew -- that no one is immune from the worst financial crisis in decades.

"This has been the most critical financial environment of our lifetimes," said Michael Holland, head of New York-based investment firm Holland & Co, which holds Berkshire shares. "Any financial company, including Warren Buffett's, has been affected by it. Moody's is saying it is so, long after the fact."

"Moody's is taking preemptive action," said Sean Egan, managing director of Egan-Jones Ratings Co in Haverford, Pennsylvania.

"We think the Moody's downgrade is not a major move. It won't cost them a lot of business," Egan said, adding that his own ratings company would probably take Berkshire down a notch or two.

Berkshire is a large investor in Moody's.

Falling stock prices have reduced the value of National Indemnity's investment portfolio, in turn weakening its capital cushion relative to its insurance and investment exposures, Moody's said in a statement.

About half of Berkshire's results come from its insurance businesses.

The company's declines in the last year came mainly from paper losses on derivative contracts tied to stock market indexes. Berkshire's equity holdings, such as American Express Co (AXP.N) and Wells Fargo & Co (WFC.N), have also suffered big declines in value.

Other, non-insurance businesses at the company have also seen "a meaningful drop in earnings and cash flows, particularly for businesses tied to the U.S. housing market, construction, retailing or consumer finance," Moody's added.

Since taking over Berkshire in 1965, Buffett has transformed it from a failing textile maker into a sprawling insurance and investment company, with nearly 80 businesses.

Over the years, Buffett has amassed a fortune worth $37 billion and making him the world's second-richest person, according to Forbes magazine.

Berkshire products include Geico car insurance, Borsheim's Fine Jewelry and Fruit of the Loom underwear.

The company's bond insurance arm Berkshire Hathaway Assurance (BHAC) had been the only insurer of municipal bonds to have retained its top credit rating, although it has not been a major player in insuring primary deals.

BHAC insured just $3.3 billion in new debt last year, according to Thomson Reuters data. Buffett said about $15.6 billion was insured in the secondary market for munis, although 77 percent of that was on bonds that were already insured by lower-rated guarantors.

Class A shares of Berkshire closed Wednesday at $88,960 on the New York Stock Exchange, nearly 40 percent below the $147,000 year-high set September 19, according to Reuters data.

[Demeter]

33. ING to shed up to $10.6 billion of assets

http://news.yahoo.com/s/nm/20090409/bs_nm/us_ing_2

AMSTERDAM (Reuters) – Dutch ING (ING.AS) plans to sell operations worth up to 8 billion euros ($10.6 billion) to reduce risk, focus its bank on Europe, and manage its banking and insurance separately, boosting its shares on Thursday.

ING (ING.N), which was loss-making in 2008 and received a 10 billion euro injection from the Dutch state last October, said in a statement it wants to shed non-core activities worth 6 billion to 8 billion euros, or 10 to 15 businesses.

ING, which also said its insurance business would in future focus on life insurance and retirement services globally, had previously targeted divestments of 2 billion to 3 billion euros, and had already sold a stake in ING Canada (IIC.TO).

Shares in ING rose as much as 13 percent and were up 8.2 percent at 5.69 euros by 0854 GMT, compared with a 1.3 percent rise of the European insurance index (.SXIP).

The stock has more than doubled in value in the past month but is still down 77 percent over the past 12 months, against a 54 percent fall of the insurance index.

Analysts were pleased that ING gave clarity on its strategy, and had chosen to focus on its strengths.

"Short term this may hurt earnings per share a little but risks are reduced. ING can allocate capital to its most profitable activities, boosting profitability in the long run," Theodoor Gilissen analyst Tom Muller said.

ING, the biggest Dutch bank and insurance group measured by balance sheet assets, joins banks such as Royal Bank of Scotland (RBS.L) and U.S. Citigroup (C.N) which are cutting operations after being hit by the credit crisis and getting state aid.

"It is making us focus on, first of all, making sure we get through the crisis but also to set ourselves up after the crisis. To have a position in markets where we can lead," ING Chief Executive Jan Hommen told reporters.

SPLITTING OPERATIONS

ING will start managing its bank and insurance activities separately but Hommen declined to comment directly when asked if this could lead to a future split of the group, saying only "it is a way to make our organization easier and focused."

ING, which ranked as the world's twelfth-largest bank by market value last February, is organized along six business lines, with three focusing on retail banking, wholesale banking and ING Direct, and three on regional insurance groups.

ING will wind down its retail bank operations in the Ukraine, review life insurance activities in China and Japan, and divest U.S. insurance activities such as financial products, group reinsurance, and annuity books when possible.

When ING sold its ING Canada stake in February, analysts earmarked ING's stake in Brazilian insurance group Sul America (SULA11.SA) as a possible divestment.

ING declined to say whether it was in talks with potential buyers for any assets to be divested.

Muller said ING would be able to sell operations because the group was not in situation of forced sales, giving it time to sell at a reasonable price, and he said rivals on property insurance would be the likely buyers, declining to name companies.

ING will continue ING Direct, its global online savings bank, and Hommen said its ING Direct operations in the United States and Germany, where it operates ING-DiBa, were part of its growth strategy.

ING will split up its real estate operations, making its property investment management activities part of a global investment management unit and Hommen said it may team up this unit with peers in the future.

"We see in the global investment management area the focus, the consolidation. By separating the business out, and making it a standalone for-profit organization we have a potential to play a role in that consolidation process," Hommen said.

He said ING's first-quarter results were "significantly better" than in the fourth quarter of 2008, when ING booked a loss of 3.7 billion euros, echoing similar comment by banks such as Deutsche Bank (DBKGn.DE), which has said it made a good start in 2009.

An ING spokesman declined comment when asked what made the first quarter better than the preceding one.

[ozymandius]

34. Congressional Panel: Fire Managers, Liquidate Banks (HA! HA!)

Tee hee:

A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.

The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.

“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.

more at The Big Picture...

[Demeter]

39. Ah! Elizabeth Warren!

Now, if she were the VP, we'd be a lot better off, and Biden could do good in the Senate.

[ozymandius]

65. She _should_ be Treasury Secretary.

She was also one of the experts in the film "Maxed Out" on how the banking industry has addicted us to debt.

[ozymandius]

41. OH! What Joy! Banks pass(*) the "stress test"!!!

Banks Holding Up in Tests, but May Still Need Aid

For the last eight weeks, nearly 200 federal examiners have labored inside some of the nation’s biggest banks to determine how those institutions would hold up if the recession deepened.

What they are discovering may come as a relief to both the financial industry and the public: the banking industry, broadly speaking, seems to be in better shape than many people think, officials involved in the examinations say.

That is the good news.(*) The bad news is that many of the largest American lenders, despite all those bailouts, probably need to be bailed out again, either by private investors or, more likely, the federal government. After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, these officials say.

And just what is the net-fucking-sum of all this stress testing, you ask?

Regulators recognize that for the tests to be credible, not all of the banks can be winners. And it is becoming increasingly clear, industry insiders say, that the government will use its findings to press certain banks to sell troubled assets. The hope is that by cleansing their balance sheets, banks will be able to lure private capital, stabilizing the entire industry.

That's it?!? "Better find a sucker to buy those troubled worthless assets, guys. Otherwise we will have to bail you out again. Or we might have to glare at you!!" Give me a fucking break!

[UpInArms]

48. gaaaahhhh! and et tu insurers?

Treasury says some insurers qualify for TARP

WASHINGTON (Reuters) - The U.S. Treasury said on Wednesday some life insurers have met requirements for government capital investments under an existing rescue plan, clarifying that it is not launching a new bailout for the sector.

"There are a number of life insurers that have met requirements for the Capital Purchase Program because of their bank holding company status," said Treasury spokesman Andrew Williams. "These are among the hundreds of financial institutions in the CPP pipeline that will be reviewed and funded as appropriate on a rolling basis."

The statement was made in response to a Wall Street Journal story published late on Tuesday saying the Treasury would extend its $700 billion financial bailout program to certain life insurers and would make an announcement in coming days.

Williams said any capital investments in insurers that have bank holding company status would not constitute a new rescue program for the insurance sector.

STOCKS PARE GAINS

The Treasury clarification caused stocks to pare gains, particularly the major insurers which were viewed as the likely benefactors of a widening of the Treasury's financial bailouts. Prudential Financial Inc shares had climbed more than 12 percent at one point in early trade, but by midday were up 7 percent at $23.65, while MetLife's earlier 10 percent gain was chopped back to about 3.3 percent at $24.96.

In recent months, some insurance companies have received approval to acquire banks, paving the way for them to participate in the Capital Purchase Program, which the Treasury has estimated will top out at $218 billion.

...more...

I gotta say -

this shit must stop right now - here we are at at bottom on the heap holding up the king shits that live in luxury - paying our freakin' bills with more and more worthless money - whilst the fu**ers that caused the mess are have a GD party.

[ozymandius]

49. Naked Capitalism's analysis: "Quelle Surprise! Bank Stress Tests Producing Expected Results!"

-excerpt-

The whole point of this charade exercise was to show the big banks weren't terminal but still needed dough, and I am sure it will prove to be lots of dough before we are done. But they now have the Good Housekeeping seal, so the chump taxpayer can breathe easy that the authorities are taking prudent measures to make sure his money is being shepherded wisely.

If you believe that, I have a bridge I'd like to sell you.

We said from the beginning the stress tests were a complete sham. Just look at the numbers. 200 examiners for 19 banks? When Citi nearly went under in the early 1990s, it took 160 examiners to go over its US commercial real estate portfolio (and even then then the bodies were deployed against dodgy deals in Texas and the Southwest). This is a garbage in, garbage out exercise. The banks used their own risk models to make the assessment, for instance, the very same risk models that caused this mess. And there was no examination of the underlying loan files.

....

They all will be declared to pass in some form, no matter how dreadful they really are (if the remedy is putting in more Federal dollars, rather than a receivership, then the fiction that the money is not being wasted must be preserved). But so as to look sufficiently tough, some banks will be treated harshly. If it winds up being, say, Fifth Third (which I am told by John Hempton is a very well run bank, publishes much more honest financials than its peers, but is in simply terrible geographies, Michigan, Ohio. Florida) and not Citi, then we know the process is not just hopelessly politicized, but shamelessly so.

http://www.nakedcapitalism.com/2009/04/quelle-surprise-bank-stress-tests.html

[Demeter]

53. The Net of the Stress Tests? When They Opened a Few Janitor Closets

no dead bodies or even skeletons fell out.

Of course, had they been opening the safe deposit boxes....

or even the teller's drawer. Or a VP's desk drawer, or ....

[ozymandius]

61. Were the analysts actually massage therapists?

How much have these "analysts" massaged the bank board "members"?

[ozymandius]

63. Quote describing how much contempt they have for us.

Several people involved in the process say there is a wide range of results among the institutions. Those that fall short will have six months to raise capital from private investors; if they are unable to do so, the Treasury Department has said taxpayer money will be available.

http://www.nytimes.com/2009/04/09/business/09bank.html?_r=1&ref=business

[Hugin]

79. Oh, geeze! "If you don't eat your vegetables, you won't get this delicious pie! Don't you make me...

give it to you ANYWAY!"

"Oh, here's your damn pie!"

:freak:

[UpInArms]

42. dollar watch

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

Last trade 85.304 Change +0.086 (+0.11%)

Dollar's Future Blurred Further after G20 Promises and NFP Plunge

http://www.dailyfx.com/story/bio1/Dollar_s_Future_Blurred_Further_after_1239234995720.html

Traders and other market participants were looking for relief - or at least a sense of clarity - from the G20 meeting last week. For the US dollar, the stakes were especially high.


The Economy And The Credit Market



Traders and other market participants were looking for relief - or at least a sense of clarity - from the G20 meeting last week. For the US dollar, the stakes were especially high. American policy officials have gone out on a ledge in an attempt to turn a domestic recession around; but their efforts are clearly falling short as consumers, businesses and financial institutions realize the crisis is a global one. The best outcome for the summit in London would have been a clear set of actionable steps that would have spread the responsibility for recharging the global economy amongst the world’s largest nations. While the language of the statement was convincing, a critical review suggests a lack of responsibility and time line will inevitably render the promises made ineffective. This leaves the dollar at the mercy of speculation over its role as a safe haven and the potential for its economic slump to devolve into a depression. Considering the jump in the unemployment rate to a quarter century high and the dour forecast from the FOMC statement, it is difficult to locate the dollar’s good qualities.

A Closer Look At Financial And Consumer Conditions



Financial market conditions continue to show general improvement. However, participants are still clearly on edge; and this fragile rebound for confidence in the system could quickly come crashing down should another crisis point develop. This is no doubt the concern of both the Federal Reserve and Treasury Department. It has been suggested that the government will delay the results of its stress test of the United States’ 19 largest banks until after earnings season to avoid an adverse market reaction. And, in their statement, the FOMC said credit “remained very tight,” financial markets were “fragile and unsettled,” and pressure was “intensifying.”



For months, investors and traders have more-or-less overlooked the general health of the US economy. This has been the case because either its global counterparts were in worse shape or demand for liquidity drew capital into the deep end of the market’s pool. However, with fear of liquidity letting up and other governments ramping up fiscal stimulus, the American economy and currency may lose its appeal. And, considering the bearing on economic trends, the future is dimming for the dollar. Last week, NFPs plunged another 663,000 – boosting joblessness to 8.5 percent. This may end up producing what the Fed calls a ‘feedback effect.’

...more...

Bank of England Holds Rates Steady at 0.50%, Canadian Unemployment Rate Jumps to 8-Year High

http://www.dailyfx.com/story/topheadline/Bank_of_England_Holds_Rates_1239275794621.html

The Bank of England held the benchmark interest rate at the record low of 0.50% and said that it will need another 2-month to complete its asset-purchasing program. Canada lost another 61.3K jobs in March, which crossed the wires slightly weaker than expected, while the annual rate of unemployment pushed to an eight-year high of 8.0%



...more...

[ozymandius]

44. Deteriorating v. Improving

I get a sense of disconnect between the hard data reports and the speculative interests.

[UpInArms]

46. that the buck is staying anywhere near 85 is a "miracle"

it should be (jmho) based on the amount of printing being done and the shit flow - somewhere in the 72 neighborhood.

:hi:

[ozymandius]

47. Maybe an engineered "miracle"?

I am anymore surprised the USD is not drifting toward bungfodder territory. Also check my Post #41.

[Demeter]

55. The Miracle of Manipulation and Prop(aganda)

[ozymandius]

50. Not really FOREX related - but hard data on "disconnect" and "deteriorating"

Vacancies, vacancies, vacancies ... and falling rents

Here is a summary of the vacancy reports released over the last few days.

On vacancies:

Malls: From Bloomberg: Vacancies at U.S. Retail Centers Hit 10-Year High, Reis Says

The vacancy rate at neighborhood and community shopping centers rose to 9.5 percent from 8.9 percent the previous quarter and 7.7 percent a year ago ...

Offices: Office Vacancy Rate Rises to 15.2% in Q1 and the WSJ: Companies Sold Office Space at a Fast Pace

The office vacancy rate nationwide rose to 15.2% from 14.5% in the previous quarter, and likely will surpass 19.3% over the next year, according to Reis ...

Apartments: From Reuters: US apartment market worsens with economy--Reis

The national apartment vacancy rate rose to 7.2 percent in the first quarter, up 0.60 percentage points from the prior quarter and 1.1 percentage points from a year earlier ...

Hotels: From HotelNewsNow.com: STR reports U.S. data for week ending 28 March

In year-over-year measurements, the industry’s occupancy fell 12.3 percent to end the week at 56.6 percent...

more...

[Ghost Dog]

51. Perception management (aka psychological warfare)

does tend to lead to some cognitive dissonance, I understand. Others rebel.

[UpInArms]

45. Report: Banks doing great! Need to be "bailed out" again!

http://www.reuters.com/article/businessNews/idUSTRE53814R20090409?feedType=RSS&feedName=businessNews

(Reuters) - The U.S. banking industry seems to be in better shape than many people think, the New York Times said, citing officials involved in federal "stress tests."

However, many of the largest American lenders probably need to be bailed out again, either by private investors or the federal government, the paper said.

After receiving many millions, and in some cases, many billions of taxpayer dollars, banks still need more capital, the paper cited the officials as saying.

All 19 banks undergoing the exams will pass them, the paper cited the regulators as saying, adding that if the examiners determine that a bank needs "exceptional assistance," the government will provide it.

There is a wide range of results among the institutions, the paper cited several people involved in the process as saying.

Some federal and industry officials told the paper that regulators may use the results to prod reluctant banks to sell assets under the Treasury's bailout program.

The Treasury plans not to reveal stress test results until after earnings season to avoid spooking equity investors, a person familiar with the process told Reuters on Tuesday.

[Demeter]

58. Which Equity Investors Are These?

Where did they find any plump, new pigeons to pluck?

[ozymandius]

62. Cramer and company n/t

[DemReadingDU]

56. Charles Hugh Smith: SURVIVAL+ Chapter Ten

Survival+ 10: When Belief in the System Fades (April 9, 2009)
Charles Hugh Smith

Though I just announced that I'd be straying from Survival+ for a few days, Survival+ 9: Squeezing the Middle Class (April 7, 2009) required a follow-up.

The entire Survival+ analysis centers on trying to understand the multilayered ways the middle class is being squeezed to exhaustion / insolvency. My good friend G.F.B. (also a small business owner, as you could have guessed) likened the tax and fee-for-services (or whatever we deem a service, like you operating a business in our jurisdiction) system to a parasite and host. The parasite is careful not to extract too much, lest the host die.

But sometimes parasites become so numerous and greedy that they end up killing the host and thus themselves. Perhaps the single key task of the Plutocracy/State (two sides of a single coin) is to convince the host (the middle class) to keep laboring despite the ever-increasing extraction of their earnings and wealth.

The task requires an actively supported mythology (you too can be Bill Gates!) and a subtle cultivation of interlocking beliefs in the fairness and rightness of the system. The overriding faith that hard work and individual greed will both be rewarded as long as the middle class believer "keeps his nose clean," i.e. plays along with the set rules, is carefully nourished.

If we withdraw from the 24/7 propaganda of the Mainstream Media, the absurdity of these constantly repeated themes becomes painfully clear. For example, "Socialism is bad and evil because it redistributes wealth." Well, now that's interesting, because Crony Capitalism does the same thing, gathering heavy taxes from the productive class and funneling it into the hands of a Plutocrat class who shoulder relatively modest tax burdens while reaping vast rewards via government contracts, bailouts. tax loopholes, special legislation, etc.

In other words, the key difference between Euro-style Socialism and Crony Capitalism as perfected in the U.S. is the middle class receives few benefits from their onerous tax burdens. In much of Europe, college and medical care are mostly paid by taxes; here in the U.S. productive citizens pay stupendous taxes and yet they also pay tens of thousands of dollars for a university education and huge, wealth-destroying co-payments for medical care--if they even have insurance.

This is truly Orwellian: the middle class is conned into supporting income redistribution which favors the super-rich and those paying no tax whatsoever (for instance, undocumented laborers). Nice gig if you can get it: reap the rewards, pay no taxes. Unfortunately, middle class wage-earners don't get that option.

Here's another howler: "The U.S. healthcare system is the finest in the world." Ooh, I have to be careful not to laugh too hard--I can't afford to hurt myself. Just today my dermatologist prescribed a "been around for 20 years" topical cream to burn off the sun-damaged spots on my hands and arms. I've used this cream for a decade: Efudex is the brand name, and it's not some "new miracle drug" which cost billions to develop as per the pharmaceutical industry propaganda.

Some years ago a small tube of the stuff cost an absurdly high $79. Then it jumped to an even more insane $120 for a few ounces of cream. Even though the patent has long expired, it jumped to $218 per tube a few years back. Guess the current price: $272 per small tube.

How can any system justify a four-fold jump in the cost of a cream which was developed decades ago, other than rampant, uncontrolled greed ands avarice? (Needless to say my own self-paid bare-bones medical insurance has no drug, dental or eyewear coverage.)

The pharmacist, herself a recent immigrant judging from her accent (I leave her ethnicity out other than to note she was non-Caucasian) shook her head and noted that in this country, you either have to be poor or rich. She added that undocumented workers get Medicaid (i.e. they pay nothing in taxes or fees) while people who have worked for decades get nothing. (Unless they hang on long enough to qualify for Medicare, of course, at 65.)

Those fortunate enough to have excellent medical insurance would co-pay $5 or $15 for this $272 tube of cream, and never know how much it cost the insurer/employer. Far from being "the best system in the world," the exact opposite is true: without any doubt, the U.S. has the worst medical/sick-care system of all industrialized nations. If you think it's great, that's because your costs are being paid by someone else; try asking for the "real cost" of the meds and services you've received, or better yet, paying for them cash. Your faith is just how wonderful the system is will dissipate with truly amazing alacrity.

The middle class citizens now losing their jobs are receiving just this "lesson" in how fast faith in the "best in the world" system can vanish as they face paying COBRA fees of $1,000 or more per month for stripped/simulacrum healthcare insurance, or find themselves without any healthcare at all.

I reworked the theme for Survival+:

At some point--perhaps a "tipping point" or just an erosion--the middle class bails out of the increasingly burdensome task of propping up the state and the Plutocracy. I call this phenomenon "When Belief in the System Fades."

There are elites in every human culture (and in the social apes as well). But unlike a troop of chimps ruled by an alpha male, today's elites cannot operate the vast complex structure of the U.S. economy, government and society themselves. They need hundreds of thousands of well-educated, hard-working people to believe in the system of meritocracy, justice, opportunity, etc., people who will choose to invest their entire productive lives in sustaining the structure the elites influence/control.

The corollary to this structural need for highly motivated, dedicated people to work the gears is that if their belief in the machine fades, then the machine grinds to a halt.

Continue reading Chapter Ten...
http://www.oftwominds.com/blogapr09/survival10-04-09.html


link backwards to previous chapters...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3821239&mesg_id=3821397

edit to correct link

[Demeter]

60. Wells Fargo expects $3 billion in earnings

(Reuters) – Wells Fargo & Co (WFC.N) on Thursday said it expected approximately $3 billion in first quarter earnings.

Highlights:

* Expects record first quarter earnings of approximately $3 billion

* Sees Q1 2009 earnings per share about $0.55 including items

* Says expected results include total revenue of $20 billion

* Says wachovia acquisition exceeding expectations

* Sees qtrly combined net charge-offs of $3.3 billion

* Rpt-wells fargo & co (wfc.n) sees q1 shr about $0.55/shr after preferred

dividends

* Says tce ratio expected to increase in Q1

* Says tce expected to be above 3.1 percent of tangible assets at March 31,

2009

* Says reconfirming $5 billion of expected annual merger-related expense

savings

http://news.yahoo.com/s/nm/20090409/bs_nm/us_wellsfargo_1


YOUR TAX DOLLARS AT WORK!

[Pale Blue Dot]

64. Looks like it will be at least one more weekend of delusion.

I probably should stay off of DU for the next few days.

[Demeter]

66. You'll Miss the Easter Egg Hunt!

and the famous "rolling the taxpayer across the White House Lawn" event.

[ozymandius]

67. Futures way up on Wells Fargo. All else be damned.

S&P 500 +20.40 843.00 4/9 8:46am

NASDAQ +21.50 1320.00 4/9 8:45am

Dow Jones +148.00 7941.00 4/9 8:46am

[Hugin]

75. Well, that and the initial (un-corrected) jobless claims were down making the total a mere 654000...

give or take a couple dozen thousand here or there. :eyes:

[ozymandius]

68. Wal-Mart blames late Easter for slow sales

NEW YORK (CNNMoney.com) -- Wal-Mart Stores reported March sales Thursday that were much softer than analysts' forecasts, citing an "Easter calendar shift" that it expects to push holiday-related purchases into April.

Wal-Mart (WMT, Fortune 500), the world's largest retailer, said sales at its stores open at least a year, a key measure of performance known as same-store sales, rose 1.4% last month.

Analysts, on average, had expected the company to post an increase of 3.2% in March, according to sales tracker Thomson Reuters.

Although comparable store traffic increased in the month, the retailer said the average checkout total was lower, "mostly due to the Easter shift and, to a lesser degree, inflation at a lower rate than last year in grocery."

http://money.cnn.com/2009/04/09/news/economy/retail_sales/index.htm

---

Of course a late Easter is to blame. We all know what a big holiday shopping season Easter is. :eyes:

[DemWynner]

91. We did not get anything for my kids this Easter

They don't really need anything and now that my son lost his job and is frustrated with looking for a new one, we don't have as much extra money. He has signed up for college and is just sort of waiting for that, but if he doesn't get a part time job soon, we will end up loaning him the money. But, he is filling his down time by learning how to cook. almost every night we have a home-cooked meal waiting for us. He is getting pretty good at it and I am putting on some weight!

[tclambert]

98. Now, cooking, that's a valuable skill.

As many people like to eat on a daily basis. I always approve of people learning new skills. Myself, I'm thinking about learning Español.

[goforit]

93. In addition to the economy, people are worn out from CHURCH scandals.

[Demeter]

74. Felix Salmon (Still unconvinced by the rally) The Geithner Death Star

http://blogs.reuters.com/felix-salmon/2009/04/06/the-geithner-death-star/

Mike at Rortybomb has a very scary and quite compelling post about the Geithner bank bailout scheme. Basically, he says, it looks very, very similar to the kind of schemes that Enron used to game the market back in the bad old days.

The Death Star strategy (yes, they called it that) was where Enron would take a fee for relieving a congested market of its excess supply by moving it elsewhere. Just like our legacy assets! There are too many of them, it is clogging up trade, let’s get them to someone else who wants them. However Enron would just move the energy in a circle, collecting a fee for not doing what it was supposed to. As their memo famously said, they are paid “for moving energy to relieve congestion, without actually moving any energy or relieving any congestion.” And, it appears, that the large banks are gearing up to do just that; with the Geitner Death Star that they’ll just be collecting a large fee to run them in a circle, without actually moving any of them off their collective books. For old time’s sake, I hope they route their loan bids through Oregon and then Utah before putting them back right where they started.

Mind you that was the electrical grid of California - this appears to be at the scale of the entire financial market. In case you are wondering, traders out there are licking their lips to try and find ways to game this even better than Enron.

The potential hazards here are, clearly, enormous — even without the Administration explicitly rejecting criticism that the banks are going to end up shamelessly bidding on each others’ assets. If the banks get a green light to do this, you can be sure that any number of greedy traders will take that as a green light to get up to as many shenanigans as they can. Many of those greedy traders will try their hand in any event — but if the PPIP is structured so as to try to stop them, then it’s conceivable that they might not do a lot of damage. If the PPIP is structured on a laissez-faire system of all bids being assumed to be legitimate, then this could be an utter disaster.

[Demeter]

76. "That's Part of the Plan"

Obscure quote from Fairy Tale Theatre's Puss in Boots (not to be confused by Cat in the Hat).

So I'm a mother. Shoot me, I could use the vacation.

[Demeter]

77. Economy Falling Years Behind Full Speed

http://www.nytimes.com/2009/04/07/business/economy/07capacity.html?_r=1&ref=business

By LOUIS UCHITELLE

As the recession grinds on, more and more of the nation’s means of production — its workers, its factories, its retail outlets, its freight lines, its bank lending, even its new inventions — are being mothballed.

This idled capacity, like baseball players after a winter off, takes time to bring back into robust use. So even if the recession miraculously ended tomorrow, economists estimate that at least three years would pass before full employment returned and output rose enough for the economy to operate at full throttle.

While stock market investors have embraced tentative signs of improvement in the mortgage market and elsewhere, even a sharp pickup in demand for products and services will take considerable time to play out.

The mathematics are daunting. The shortfall is running at more than $1 trillion in annual sales and other transactions. Only once since the Great Depression has there been such a severe loss of output — in the 1981-82 recession — and after that downturn, it was seven years before the economy regained the lost production.

Recovery from the current recession could be similarly sluggish. New occupants have to be found for empty stores. Factory owners who are hesitant to ramp up production will wait until they are sure of demand. Hiring the right people for an operation will take time. And imports, entering the country in ever greater quantities, will slow any expansion by siphoning sales from domestic producers.

Then there is the growth rate itself. In the six years of recovery from the 2001 recession to the current one, the economy grew at an average annual rate of only 2.5 percent, adjusted for inflation. If that growth rate were to resume, just $350 billion a year would be added back, requiring three years to restore the $1 trillion in lost capacity. But getting the economy to grow at all after so much output has been lost, and so many jobs, is no easy task.

“Excess capacity, once entrenched, perpetuates itself, and that is what is happening now,” said James Crotty, an economist at the University of Massachusetts, Amherst. “Companies cannot hire workers to make more goods and provide more services until their sales go up. But people can’t buy goods and services until they are hired — so the excess capacity just sits there.”

It shows up everywhere. Lawyers are booking fewer hours. Retail space goes begging. Tourism is down. So is cellphone use, airline bookings, freight traffic and household borrowing, which is less than half what it was on the eve of the recession, the Federal Reserve reports.

With orders dwindling, manufacturers are using less than 68 percent of the nation’s factory capacity, the lowest level since records were first kept in 1948. And while entrepreneurs are as inventive as ever, they may not be able to get venture capitalists to bankroll their creations.

.....

If there is an upside, it is the absence of inflationary pressure. With so much excess capacity rattling around, shortages do not develop that would push up prices. Indeed, interest rates are kept low to encourage more borrowing and spending. Neither is happening. Instead, demand continues to shrink and idle capacity to build up.

The Obama administration, like the Roosevelt administration 75 years ago, is trying to break this logjam through government spending, using it in effect as a substitute for consumers who are jobless or short of credit. The spending is also a substitute for companies that hesitate to extend themselves or see no profit in doing so.

But the president’s solution, the recently enacted stimulus package, spreads $787 billion over two years. So even if every dollar of spending restored a dollar of output, President Obama would be nearing the end of his first term before output approached the level achieved just before the start of the recession in December 2007.

Or so says Robert J. Gordon, an economist at Northwestern University who specializes in tracking the gap between actual output and potential output, a k a full capacity. The Roosevelt economy also languished well below full capacity, Mr. Gordon said, until the summer of 1940, when France fell to Hitler’s armies.

From then until the attack on Pearl Harbor, 18 months later, a galvanized administration more than doubled federal outlays — soon accounting for $1 of every $4 spent in the country — and the United States entered the war with its economy operating almost at full capacity.

(Government currently accounts for $1 of every $5 spent, barely more than in 2007, and most of that spending is at the state and local levels, the opposite of 1940-41, when federal outlays shot up.)

“What you had was a revolution in the labor force,” Mr. Gordon said. “Women poured into jobs in droves, often replacing men, and every factory went to three shifts.”

By V-J Day in 1945, the economy, propelled by war spending, was operating beyond what the experts thought of as full capacity, demonstrating the “squishiness” of the concept, as Mr. Gordon put it. Just the swing from one to three shifts alters capacity, he said, and so does the more intensive use of floor space.

Capacity stretched again in the 1950s and ’60s, to feed demand created by the wars in Korea and Vietnam, and then again in the late 1990s, propelled by the dot-com boom. And there were downdrafts as recessions sapped demand, but none as punishing as the current one.

Sixteen months into this recession, the economy is operating at 7 percent below its potential capacity, the Congressional Budget Office reported last month. If that were to continue, today’s $14 trillion economy would be a $13 trillion economy by this time next year.

[Tansy_Gold]

90. the other question is ---

how has capacity changed -- increased? decreased? -- relative to the overall economy and the change in population.

If a steel mill closes and is dismantled, does that not decrease capacity?

If a factory is shuttered, its equipment shipped to China, does that not decrease capacity?

If a generation of workers is propagandized to disparage manufacturing jobs and make themselves unsuitable for them, does that not decrease capacity?

If the manufacturing infrastructure -- rails, highways, electric grid, supply systems -- is removed from service, does that not decrease capacity?

If we are currently operating at 68% of 68% (hypothetically) of capacity, does that not tell us something about what we've done to our economy?

Our manufacturing capacity has been artificially idled because it's been moved out of "our" economy. And no one seems to be interested in making the really tough decisions to move it back.

Unless and until those decisions are made, it won't, indeed it can't, come back.



Tansy Gold

[Demeter]

94. Instead of Top Down Economy, We Need To Look at Bottom Up

We start with the lowly citizen. Does every inhabitant have food, shelter, medical care? Education, clothing? Do they get out and vote? Do they have a job--not an income, but a job: something meaningful and requiring effort, rewarding to the person, and useful to the greater society?

Do children have childcare, when needed by their parents? Do orphans find families? Do the elderly live a life worth living? Do the disabled have lives, or are they merely out of sight and out of mind?

Did anybody say anything about money, there? No.

[Tansy_Gold]

102. "Selling off America's manufacturing might....."

Posted by Bozita over in Editorials:

http://www.detnews.com/article/20090409/OPINION03/904090411/1409/METRO

Thursday, April 9, 2009
Charlie LeDuff: Travels with Charlie
Selling off America's manufacturing might, a factory at a time

Ypsilanti -- You can now watch the liquidation of the American Dream in real time.

Any given week, the guts of a whole factory are auctioned off. Its contents are sold piece by piece and taken away for scrap or antiques or resale to foreign companies. Men with blowtorches and trucks haul off tool-and-die machines, aluminum siding, hoists, drinking fountains, salt and pepper shakers, anything that might be of some value. It is the removal of the country's mechanical heart right before your eyes. It is breathtaking.

"Everyone in our generation from the Midwest ought to see this," said Cooper Suter, a 44-year-old unemployed carpenter from Toledo who has turned to scrapping factories to make ends meet. "It kind of sums up life in the Rust Belt."

More than a dozen factory auctions have been held over the past six months in Michigan alone. On a recent morning, Suter and his sidekick, Rick Phillips, a 25-year-old former steelyard worker, were mining the last remnants of the Automotive Components Holdings plant, which made alternators and windshield wiper motors for Visteon and Ford. Men like Suter call themselves the cockroaches, the crumb snatchers, the last people in the factory before the metal scrappers come.



ACH is a temporary company owned by Ford Motor Co. whose sole purpose is to sell or shut down 17 former Visteon Corp. plants. In its heyday, the factory employed 3,800 people.

It closed in December, leaving 500 people to wonder how they will pay the banker, the dean, the grocer.


More, including a video, at link.

This might be something to repost over the week-end.



Tansy Gold, now sick at heart.

[Barack_America]

81. No U.S. banks will close due to stress tests: source

Sounds like good news, right? Well, read further...

http://www.reuters.com/article/ousiv/idUSTRE5383JM20090409

[Tansy_Gold]

99. In Japan, however

Regret more bad financial news

Following the problems in the sub-prime lending market in America and
the run on Northern Rock in the UK, uncertainty has now hit Japan.

In the last 7 days Origami Bank has folded, Sumo Bank has gone belly
up and Bonsai Bank announced plans to cut some of its branches.

Yesterday, it was announced that Karaoke Bank is up for sale and will
likely go for a song while today shares in Kamikaze Bank were
suspended after they nose-dived.

While Samurai Bank are soldiering on following sharp cutbacks, Ninja
Bank are reported to have taken a hit, but they remain in the black.

Furthermore, 500 staff at Karate Bank got the chop and analysts report
that there is something fishy going on at Sushi Bank where it is
feared that staff may get a raw deal.



Tansy Gold apologizes sincerely but she found this in some old unopened email and thought we needed a groaner/chuckle today

[DemReadingDU]

100. HeHe

That's good for a bedtime chuckle
:)

[Demeter]

103. I Will Devote As Long As It Takes

to find suitable PUNnishment for foisting such a post on an unsuspecting readership.

[Ghost Dog]

104. Meanwhile, however, Go Bank

is moving stealthily to capture and consolidate new territory.

[ozymandius]

97. End of the blistering high volume day

Funny what a good report from a known sub-prime creditor can do for things.

Dow 8,083.38 Up 246.27 (3.14%)
Nasdaq 1,652.54 Up 61.88 (3.89%)
S&P 500 856.56 Up 31.40 (3.81%)
10-Yr Bond 2.926% Up 0.079
NYSE Volume 8,766,435,000
Nasdaq Volume 2,217,857,750

4:15 pm : A better-than-expected earnings preannouncement from Wells Fargo sent the financial sector surging 15.5%, which induced buying in the broader market and helped the Dow move back above 8,000.

Wells Fargo (WFC 19.61, +4.72) isn't scheduled to officially announce first quarter earnings results until April 22, but came out this morning to let investors know it expects to earn $0.55 per share for the quarter. Analysts had forecast earnings of just $0.24 per share. Wells Fargo also indicated its combined net charge-offs are down sequentially and that the legacy Wachovia business is operating well.

Wells Fargo's announcement seemed to contradict a handful of pessimistic comments and reports, and helped restore investor confidence in bank stocks. Diversified banks advanced 28.9%, while the KBW Banking Index climbed 20.1%.

Leadership from banks and other financial stocks helped bring about broad-based buying in each of the major indices. In turn, all three major indices were able to log their best single session percentage gain in two weeks and close at session highs. Each index advanced more than 3%. Small- and mid-cap stocks fared even better; the Russell 2000 Small-Cap Index spiked 5.9%, while the S&P 400 Mid-Cap Index tacked on 5.5%.

There weren't any market-moving earnings announcements released today. However, plenty of retailers were out reporting same-store sales results for March. Though the numbers generally showed declines, they weren't necessarily as bad as many had expected. That, combined with a positive bias in the broader market, helped retailers climb 4.6%.

Wal-Mart (WMT 50.66, -1.95) was a laggard, though. The company posted positive March same-store sales, but the increase wasn't as strong as expected. Still, Wal-Mart hasn't reported a negative monthly same-store sales figure since May 2007.

Wal-Mart's string of positive same-store sales results largely comes from strapped consumers looking for bargains amid stiff macro headwinds, including rising job losses. Initial jobless claims for the week ending April 4 totaled 654,000, which is down 20,000 from the week before, but generally in-line with the 660,000 initial claims that were expected. Continuing claims climbed to a new record high of 5.80 million.

A strong bias in the equity markets didn't really carry over into commodities trading. Crude oil futures closed pit trading with oil priced 5.2% higher at $51.97 per barrel, but natural gas contracts closed pit trading roughly 0.6% lower at $3.60 each. Gold finished at $883.00 per ounce, down 0.3%. Silver closed pit trading at $12.33 per ounce, just below the unchanged mark.

As a reminder, stock and bond markets are closed Friday for holiday observance.DJ30 +246.27 NASDAQ +61.88 NQ100 +3.0% R2K +5.9% SP400 +5.5% SP500 +31.40 NASDAQ Adv/Vol/Dec 2290/2.15 bln/455 NYSE Adv/Vol/Dec 2741/1.84 bln/366