STOCK MARKET WATCH, Friday April 24

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday April 24, 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 23, 2009

Dow... 7,957.06 +70.49 (+0.89%)
Nasdaq... 1,652.21 +6.09 (+0.37%)
S&P 500... 851.92 +8.37 (+0.99%)
Gold future... 906.60 +14.10 (+1.56%)
30-Year Bond 3.80% -0.04 (-0.97%)
10-Yr Bond... 2.93% -0.04 (-1.25%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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Read more: du

[ozymandius]

1. Market Observation

Twilight Zone Treasuries
BY MIKE SHEDLOCK

In accordance with its "print to buy" program, today the Fed bought another $7 billion of Treasuries.

U.S. Fed buys $7 bln of Treasuries on Thursday
Thu Apr 23, 2009 11:09am EDT

The Federal Reserve bought $7 billion of Treasuries maturing between May 2012 and August 2013 on Thursday, the New York Fed said on its Website.

Dealers submitted $15.99 billion for consideration in the purchase. The Fed made its heaviest purchases in Treasuries maturing in May 2013 and June 2012, respectively.

The Fed said at its last meeting it intends to buy $300 billion in Treasury securities over six months in a bid to lower long-term borrowing costs and revive economic growth.

Inquiring minds are looking at a chart to see what the market thinks of this manipulation.

-see chart-

It is ridiculous for the Fed to think it can control the vast $trillion treasury market with pea shooting efforts at $7 billion a pea. However, as the charts above show, the Fed announcement hugely distorted the market in smaller timeframes.

As Prof. Zucchi says "If Mr. Fed can't rig the price of an asset by buying it with printed money, why else should anyone else buy it?"

Other than the initial pop, the Fed's silly attempt to game the system may have caused so much mistrust that it is putting upward pressure on yields.

...editorial continues with thoughts on sustainable recovery efforts...

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

[ozymandius]

2. Today's Reports

08:30 Durable Orders Mar
Briefing.com -2.0%
Consensus -1.5%
Prior 5.1%

08:30 Durable Orders, Ex-Auto Mar
Briefing.com -1.5%
Consensus -1.3%
Prior 3.9%

10:00 New Home Sales Mar
Briefing.com 340K
Consensus 337K
Prior 337K

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

[UpInArms]

34. U.S. March durable-goods orders fall 0.8% - Feb. durables orders revised to 2.1% vs. 3.5%

01. U.S. March durable-goods orders fall 0.8%
8:30 AM ET, Apr 24, 2009

02. U.S. March orders ex-transportation down 0.6%
8:30 AM ET, Apr 24, 2009

03. U.S. March core capital equipment orders up 1.5%
8:30 AM ET, Apr 24, 2009

04. U.S. Feb. durables orders revised to 2.1% vs. 3.5%
8:30 AM ET, Apr 24, 2009

05. U.S. March durables shipments fall 1.7%
8:30 AM ET, Apr 24, 2009

06. U.S. March durables inventories fall 1.1%
8:30 AM ET, Apr 24, 2009

[UpInArms]

36. more info:

http://www.marketwatch.com/news/story/Orders-durable-goods-drop-08/story.aspx?guid=%7B4D541176%2DCCD4%2D4B0F%2DB7E4%2D710C413A56F5%7D

WASHINGTON (MarketWatch) - The deep recession in manufacturing worsened in March, as demand for U.S.-made durable goods fell 0.8%, the seventh decline in the past eight months, the Commerce Department estimated Friday.

New orders declined in almost every industrial sector, although a key gauge of capital spending by businesses rose 1.5%, the second straight increase following a severe decline in January.

New orders in the first quarter were down 27.1% compared with the first three months of 2008.

Shipments of durable goods fell 1.7% in March and were down 18.4% in the first three months compared with the same period a year ago.

Data released by the Federal Reserve last week showed industrial output dropped at a 20% annualized rate in the first quarter. Manufacturing output has now fallen more in percentage terms during this recession than any other since 1945.

In the Commerce Department's report, inventories fell 1.1%, an encouraging sign that manufacturers are getting their supplies of unsold goods more in line with demand. However, shipments fell faster than inventories did, suggesting that production - and employment - will need to be reduced further.

General Motors (GM: 1.62, -0.07, -4.1%) announced Thursday it would shutter
13 plants for weeks in an effort to pare down its inventories of unsold cars.

The 0.8% decline in new orders was less than the 2% decline expected by economists surveyed by MarketWatch. However, February's increase was revised lower to show a 2.1% gain, rather than the 3.5% increase reported a month ago. With the revision, the level of orders in March was weaker than expected.

...more...

[Hugin]

37. "rather than the 3.5% increase reported a month ago"

I'm tempted to very cynically post a gazillion links to all of the pulp hoopla and hubris -THAT- raised.

I'm very tired of this ongoing revision game... :eyes:

[Demeter]

40. Makes You Wonder If There Are ANY Reliable Numbers Ever Coming Out of Our Govt.

[Tansy_Gold]

62. None whatsoever.

I haven't had time to really read much of SMW today -- dealing with a host of minor fires -- but I was just thinking as I logged in and saw your subject line, Demeter, that things have been very quiet lately, at least on the economic scene. And I'm thinking, in my suspcious and cynical little head, that TPTB are doing their very best to contain something very explosive, and we have a very short time to wait until all hell breaks loose.

I think virtually all the numbers are fake, but how far from true they are, I haven't a clue. something, somewhere, is going to leak out and après, le deluge.


Tansy Gold, lookin' for a paddle

[Demeter]

71. They All Took Easter Vacation

And Congress is starting to stir, that slumbering Leviathan, so they will be very, very quiet and keep nose clean and all that...

[Dr.Phool]

73. I think it was Will Rogers who said,

"Nothing is safe while Congress is in session".

That goes double for the Florida legislature.

[ozymandius]

83. That's why I joke when there are no goobermental reports to post.

Even when there are revisions ... we hear revisions! reshmisions! among pundit class engaged in judging economic health.

[UpInArms]

45. U.S. new-home sales down 30.6% in past year

05. U.S. March new-home sales off 0.6% to 356,000 pace
10:00 AM ET, Apr 24, 2009

06. U.S. March new-home prices off 12.2% in past year
10:00 AM ET, Apr 24, 2009

07. U.S. home inventories down record 33.7% for year
10:00 AM ET, Apr 24, 2009

08. U.S. Feb., Jan. new-home sales revised higher
10:00 AM ET, Apr 24, 2009

09. U.S. new-home sales down 30.6% in past year
10:00 AM ET, Apr 24, 2009

10. U.S. March new-home sales beat 330,000 consensus
10:00 AM ET, Apr 24, 2009

[ozymandius]

3. Oil hovers below $50 as eventual recovery weighed

SINGAPORE – Oil prices hovered below $50 a barrel Friday in Asia as investors pondered whether a possible second half recovery will help boost U.S. crude demand, in the doldrums amid rising unemployment and a severe recession.

Benchmark crude for June delivery rose 31 cents to $49.93 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. The contract rose Thursday 77 cents to settle at $49.62.

Oil prices have traded near $50 a barrel for most of this month as investors ponder whether massive government stimulus packages around the world will be able to spark a rebound from the global recession.

....

A spike in joblessness and waning consumer spending during the last six months has helped keep prices from rising further. The Labor Department said Thursday that initial claims for unemployment compensation rose to a seasonally adjusted 640,000, up from a revised 613,000 the previous week. That was slightly above analysts' expectations.

....

In other Nymex trading, gasoline for May delivery fell 0.29 cent to $1.39 a gallon and heating oil was steady at $1.32 a gallon. Natural gas for May delivery dropped 1.5 cents to $3.39 per 1,000 cubic feet.

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

[ozymandius]

8. California to limit greenhouse gas emissions of vehicle fuels

California took aim Thursday at the oil industry and its impact on global warming, adopting the world's first regulation to limit greenhouse gas emissions from the fuel that runs cars and trucks.

The Air Resources Board voted 9 to 1 in favor of the complex new rule, which is expected to slash the state's gasoline consumption by a quarter in the next decade. It seeks to expand the market for electric and hydrogen-fueled vehicles and jump-start a host of futuristic biofuels to replace corn-based ethanol, as well as oil.

Gov. Arnold Schwarzenegger praised the "first-in-the-world low carbon fuel standard," noting that 16 other states are looking to California as a model and that President Obama has called for a national standard.

....

The regulation calculates the life cycle of fuels from their extraction -- or cultivation, in the case of biofuels -- to their combustion. But the indirect effect of replacing cropland used for energy will also be included, and the board's calculations of those land-use effects is strongly disputed by corn ethanol producers.

Meanwhile, U.S. oil industry representatives were also divided. The Western States Petroleum Assn. opposed the rule, disputing the air board's contention that it will lower the cost of fuel to consumers.

http://www.latimes.com/news/local/la-me-green-fuel24-2009apr24,0,1347527.story

[UpInArms]

61. Oil ends up $1.93, or 3.9%, at $51.55 a barrel

01. Oil ends up $1.93, or 3.9%, at $51.55 a barrel
2:51 PM ET, Apr 24, 2009

[Demeter]

72. Talk About Hope Triumphing Over Experience!

[ozymandius]

4. Geithner to outline efforts to fix banking system (again? WTF?)

WASHINGTON – Treasury Secretary Timothy Geithner is expected to outline the Obama administration's efforts to clean up the U.S. banking system during meetings Friday with finance ministers from the Group of Seven nations, a department official said.

Getting banks to lend again, along with government stimulus spending, is critical to turning around the U.S. and global economies, the official said Thursday, speaking on condition of anonymity because he wasn't authorized to speak on the record.

His comments came the same day that Dominique Strauss-Kahn, managing director of the International Monetary Fund, urged the U.S. and Europe to do more to remove distressed assets from banks' balance sheets. World leaders pledged to take such steps during a summit in London April 2.

http://news.yahoo.com/s/ap/20090424/ap_on_bi_ge/us_world_economy

[UpInArms]

29. Economy in intensive care while G7 squabbles

http://www.marketwatch.com/news/story/Economy-intensive-care-while-G7/story.aspx?guid=%7B2E89C58D%2DE3A0%2D49B6%2D9F0C%2DC4BD464C3AE5%7D

WASHINGTON (MarketWatch) -- Global economic recovery will take coordinated action among all the big economies, the International Monetary Fund warned this week, but as the IMF's spring meeting opens in Washington this weekend, the big economies are still squabbling over who's to blame for the crisis, and who should bear the cost of fixing it.

That's about the shape of things as financial leaders from the Group of Seven and larger Group of 20 gather Friday for the next round of meetings to try to put the global economy back together.

The meetings come only three weeks after President Barack Obama joined his G20 colleagues in London to set the agenda for global recovery.

Although hailed by many at the time, the G20 leaders' agreement now seems to be less than meets the eye.

The leaders could not make progress on further stimulus measures or on new global regulation for the out-of-control financial sector. The one initiative they could all agree on was to give the IMF a ton of new funding to lend to countries in trouble, and the G20 ultimately pledged a headline-grabbing $1.1 trillion in loans and guarantees to the international agency.

"Leaders love to give the IMF an assignment when they don't know what else to do," said Timothy Adams, a former Treasury undersecretary of international affairs in the Bush administration.

There is plenty of skepticism about this initiative.

...more...

[UpInArms]

30. Ozy, your headline just gave me a headache

I feel like a Bill Murray in Groundhog Day.

The "son" wants to know if it's weasel stomping day.

[Demeter]

41. Every Day Is Weasel Stomping Day!

And I am NOT PMS, either.

[ozymandius]

5. Chrysler aims for Fiat but readies bankruptcy plan

WASHINGTON/NEW YORK (Reuters) – With a week remaining for Chrysler LLC to clinch a deal with Italy's Fiat, the U.S. automaker is readying a bankruptcy plan but still focused on reaching an alliance with the support of the Obama administration, people with knowledge of the discussions said on Thursday.

Fiat, meanwhile, also emerged as a potential buyer for General Motors Corp's Opel unit in a deal that would mark the Italian automaker's emergence as a major global player with a role in the restructuring of two of Detroit's sputtering carmakers.

Chrysler, which faces a government-imposed April 30 deadline to cement an alliance with Italy's Fiat or face a cut off of its federal funding that could trigger its liquidation in bankruptcy, has been preparing for a Chapter 11 filing as a contingency, a person with direct knowledge of the plans said.

....

Earlier, the New York Times and The Wall Street Journal reported Chryslers' bankruptcy plans could include a filing as soon as next week that would allow Fiat to emerge with Chrysler's strongest assets.

One major sticking point has been attempts by the administration to get Chrysler's secured lenders to restructure some $7 billion in first-lien debt they now hold.

http://news.yahoo.com/s/nm/20090424/bs_nm/us_autos_11

[tclambert]

22. They hope to file Chapter 11 (reorganization) but fear it may turn into a Chapter 7 (liquidation)

Their creditors are playing chicken with them and Fiat and the government deadlines. Creditors see Fiat getting a sweeter deal and more ownership than they are getting, for less money. They overlook that Fiat brings technology Chrysler needs, small engine and small car technology. The creditors don't bring any of that, now do they? The big advantage for Fiat is not ownership of anything Chrysler, but access to Chrysler's dealer network. Fiat can re-enter the North American market without building a dealer network from scratch. That's huge.

These synergies vanish if Chrysler liquidates. Somebody would buy the Jeep nameplate. It might be good news for Ford. It might give GM a boost in market share. Or it might shake confidence in GM so much that they lose business.

GM seems unlikely to liquidate. Chapter 11, or some special government arranged reorganization bankruptcy now seems likely. And I would normally say that is actually a decent investment opportunity. Investors tend to overreact to Chapter 11 bankruptcies, letting their fear of the word bankruptcy and poor understanding of Chapter 11 depress stock prices to bargain values. (I once made a nice profit investing in a company in Chapter 11. They came out of it in 2 years rather than the usual 3, leaner and healthier, and stock prices came back up to not quite the previous levels, but very profitable for me.) In GM's case, though, they've been talking about giving creditors up to 90% equity in the company, trading stock for debt. That spoils everything. Would the stock have to go up a factor of 10 for regular investors to break even? That could happen. GM used to trade around $30/share and is now under $2/share. It might go back up to the equivalent of $20/share in a few years (maybe 5). But that's a gamble just to break even. Where's the profit potential? Where's any chance of doubling your money?

[ozymandius]

6. U.S. existing home sales slip in March (yesterday recap)

WASHINGTON (Reuters) – The pace of sales of existing homes in the United States fell 3.0 percent in March to a much lower-than-expected annual rate of 4.57 million units, the National Association of Realtors said on Thursday.

Economists polled by Reuters had forecast home resales to slip to a 4.70 million-unit pace from a revised 4.71 million for February, which was initially reported as 4.72 million.

http://news.yahoo.com/s/nm/20090423/bs_nm/us_usa_economy_housing

[ozymandius]

19. Ritholtz reminds me. When looking at data points please forget the month-to- month.

Month-to-month price changes are quoted to cushion news. Aberations tend to make news when they are not really newsworthy. Annual price changes are the key figure.

Here's Ritholtz's case-in-point. It sounds like the NAR folks had a "Come to Jesus Meeting" with relevant statistics.

[ozymandius]

7. Nomura Holdings Posts $7.2 Billion Loss (bought pieces of Lehman)

TOKYO — Nomura Holdings, the Japanese brokerage that burst onto the global investment banking scene last year by buying pieces of Lehman Brothers, on Friday posted the biggest annual loss in its history, casting a pall over what was a bold and risky bid to build up a world franchise.

Nomura, Japan’s largest broker, which in September acquired the Asian, European and Middle Eastern businesses of the failed U.S. bank for about $2 billion, said that acquisition costs in that deal and extensive trading losses drove up its net loss for the year ended March 31, to 709 billion yen, or $7.2 billion. The trading losses included write-downs in merchant banking and real estate assets and mounted to 150 billion yen for the year. One-off costs, including those related to retaining Lehman staff and integrating operations, came to another 230 billion yen.

Nomura has also been exposed to the fallout from Iceland’s economic collapse and the Ponzi scheme operated by Bernard Madoff.

....

The losses at Nomura spurred the bank to shore up is capital base with a 278 billion yen global offering in March. The bank said Friday that an initial accounting of its Tier 1 capital, the core measure of a bank’s financial health, came to 1.4 trillion yen and a ratio of 11.3 percent.

http://www.nytimes.com/2009/04/25/business/global/25yen.html?ref=global

[Demeter]

9. Another Excellent Cartoon! Thanks, Ozy!

Not much makes me laugh anymore, but that did.

Looks like maybe they won't get away with it. I think the economy supports prosecution, as two miserable failures reinforce each other.

It's 50F outside, and the sun isn't even up! Finally!

Well, it's Friday again. Look for Weekend Economists in the Editorial Forum after the markets close. I have a rehearsal at 7, but perhaps I can start before I leave...

[ozymandius]

11. Good morning, Demeter.

:donut: :donut: :donut:

Think of how much happiness drained out of the world during the Bush administration. Then consider how much of the action was through a combination of incompetence and malevolence. The central remedy is to investigate and then prosecute. If only 10% of the information out there is true and leads to the very top - that should be enough evidence to put them away for the rest of their miserable stinking lives.

I'm glad that the local temperatures have risen to a point that everyone's circulation will improve. It feels like cool bath water in Atlanta this morning. We're expecting a high in the lower 80s. I'll bet that Dr. Phool will sizzle outdoors in his part of Florida today. I hear it's going to be another y-shaped clothing day in many areas of the South: anyone for a tank top, thong and flip-flops?

[Dr.Phool]

24. I've already been out doing a little bit of yard work.

Before the sun get's too hot. I'll run the Fudd over to the dog park for a little while, and then continue. And maybe by afternoon, I'll have time to jump on the MC for a ride, if I don''t spend too much time on SMW.

[Demeter]

47. I Just Had 3 Holes Cut in My Ceiling

Getting skylights with the new roof. Only hit one water main, too.

[Hugin]

51. Hit any power lines or cable coax?

That's always exciting.

[Dr.Phool]

52. She would have had a new 'do, for sure.

A friend of mine did that drilling into a wall once.

He got mad because I couldn't stop laughing.

:rofl: :rofl: :spray: :rofl: :rofl:

[Demeter]

70. No, Just a Shiny Copper Pipe 2" Radius

The water main runs through the attic for the 8 units.

[Hugin]

23. Morning Demeter...

A simple reminder for those of you who want to enter your weekly economic assessment for the SMW Economic Index.

All I need is a number between -10.0 and +10.0.

A special thanks to everyone who has sent me loads of data behind the scenes and to those who post the stats here in the SMW every day! :)


Break a leg at rehearsal tonight, Demeter! :hi:

(Oh, please! Can we have a "City Slickers" themed WEE? I'm just aching to post the line.... "He's standing behind me... Isn't he?")

[Demeter]

42. Morning, Hugin!

As far as numbers go, I think maybe -12 as was last week. Maybe lower. Michigan has a glass jaw.

It's a music rehearsal--and I don't want to strain a vocal chord....

I have no idea what "City Slickers" is, so I will look it up. But that's a good line in any event.

Oh! I wanted to see that one, but Fate intervened...It did that a lot. Maybe Blockbusters has it...

[Hugin]

44. Be sure to check out the quotes.

:)

Here's the full quote in all of it's context:

"Ed Furillo: This guy, Curly, is a true cowboy. One of the last real men. He's untamed, a mustang. It'll do us good to be in his world for a while.
-Curly is approaching them from behind Mitch-
Mitch Robbins: Do us good? Didn't you guys see? The man was hanging the hired help! And, did you notice his eyes? He has crazy eyes. He's a lunatic! We are going into the wilderness being led by a lunatic!
-Mitch notices everyone's terrified faces as Curly is standing directly behind him-
Mitch Robbins: He's behind me, isn't he?"

http://www.imdb.com/title/tt0101587/quotes

"Mitch: Rollin', rollin', rollin', keep them dogies rollin', man my ass is swollen, Rawhide! Get 'em up, move 'em out, wake 'em up, get 'em dressed, get 'em shaved, comb their hair, Rawhide! Tie me down, tell me lies, pull my hair, smack my thighs - with a big wet strap of, Rawhide!"

(Disclaimer: I didn't initially like this film much, but, as I've grown older I've come to appreciate it to the point it's one of my favorites.)

Edit to add quote.

[Demeter]

46. EW!

It must be a guy thing. Maybe we'll stick to a nice Broadway musical, or in a pinch, G&S.

[Hugin]

48. Where's your sense of adventure?

"Mitch Robbins: You know, this was not in the brochure..."

[Demeter]

49. Having Passed the Half-Century Mark, My "Get Up and Go" Got Up and Went

[Hugin]

50. But... But... This movie is where I learned the secret of life!

"Curly: Do you know what the secret of life is?
-holds up one finger-
Curly: This.

Mitch: Your finger?

Curly: One thing. Just one thing. You stick to that and the rest don't mean shit.

Mitch: But, what is the "one thing?"

Curly: -smiles- That's what *you* have to find out."

Oh, okay... :sigh: Do you know what your 'one thing' is? I know mine. ;)

[AnneD]

54. You beat me to some of them ....

Mitch: Excuse me, el doctor! Hello...? Don't sew anything up that's supposed to remain open, OK?

Mitch: Women need a reason for having sex, men just need a place.


(Phil, the supermarket manager, has gotten a co-worker pregnant)
Ed Furillo: What did you use for protection, paper or plastic?


Mitch Robbins: Value this time in your life kids, because this is the time in your life when you still have your choices, and it goes by so quickly. When you're a teenager you think you can do anything, and you do. Your twenties are a blur. Your thirties, you raise your family, you make a little money and you think to yourself, "What happened to my twenties?" Your forties, you grow a little pot belly you grow another chin. The music starts to get too loud and one of your old girlfriends from high school becomes a grandmother. Your fifties you have a minor surgery. You'll call it a procedure, but it's a surgery. Your sixties you have a major surgery, the music is still loud but it doesn't matter because you can't hear it anyway. Seventies, you and the wife retire to Fort Lauderdale, you start eating dinner at two, lunch around ten, breakfast the night before. And you spend most of your time wandering around malls looking for the ultimate in soft yogurt and muttering "how come the kids don't call?" By your eighties, you've had a major stroke, and you end up babbling to some Jamaican nurse who your wife can't stand but who you call mama. Any questions?

Curly: I crap bigger than you!


Mitch Robbins: Hi Curly. Killed anyone today?
Curly: The day ain't over yet...

Clay Stone: I feel as happy as a puppy dog with two peters.

Clay Stone: When you three first got here, you were as worthless as hen shit on a pump handle.

(Cookie is asked to say something at Curly's burial)
Cookie: Lord, we give you Curly. Try not to piss him off.

[AnneD]

56. It's not a guy thing per say....

more about a midlife crisis and getting your confidence back and in the process learning what is really important in life.

[Hugin]

58. We also learn that eating Bacon at every meal is not a good idea.

"Phil Berquist: The man ate bacon at every meal... you just can't do that!"

Oh, that reminds me, I saw this great banner ad for "Bacon Flavored Lollypops" the other day!

Bacon Flavored Lollypops... (Because we love you)

Taste Test!

I gotsta get me summa doze! :9

[DemReadingDU]

84. I think my dogs would like those bacon flavored lollypops

:9

[AnneD]

86. Bacon....

Nature's candy.

[tclambert]

69. I crap bigger than you.

[Hugin]

76. That must sting a mite.

:lol:

Must be some type of sea cucumber?

[Demeter]

74. Update---It's 85F out there. The Naked Trees Are Sprouting Leaves So Fast

Instant summer. We had maybe 5 days of spring. I wore long johns 2 weeks ago!

It will probably snow on Wednesday, I'll wager. Or at least a heavy frost...

Turns out I have only 13 inches of insulation in the attic--which is why it was so frigging cold! When we had normal winters, it wasn't an issue. I will be up to R49 or maybe more for the next one (I know how the game is played--you pour money on the problem, insulate the house, and then Mother Nature gives you snowless winters with 60F days and 40F nights...)

The Kid is starting to get over the virus she started Sunday, finally.

It's hard to stay grumpy when through the newly-washed window I can see emerald green grass and green-tipped willows, and the daffodils are dancing in the 50 mph gusts (I kid you not--the next project is a wind turbine. It's been unbelievably windy).

Have a good weekend!

[tclambert]

68. That bald man behind the curtain scares me.

[Demeter]

75. Who? Cheney?

He's toast--not to worry.

[ozymandius]

10. U.S. Role Questioned on Merrill

Newly revealed testimony about federal involvement in the Bank of America acquisition of Merrill Lynch is raising questions about whether bank regulators may have overstepped during a period of extreme stress in the financial system.

Kenneth D. Lewis, the chairman of Bank of America, told investigators that he was pressured by the government to complete the acquisition of Merrill Lynch at the end of last year and to withhold material information about government assistance from shareholders, according to a letter released Thursday by Attorney General Andrew Cuomo of New York.

According to Mr. Lewis’s testimony, top banking regulators feared a systemic risk if the deal was not completed, and even threatened to remove management if it balked.

....

Federal laws require public companies to disclose any “material” event that could affect the company’s value. Whether Mr. Lewis should have disclosed the deterioration at Merrill is the subject of shareholder lawsuits. Though Mr. Cuomo said in his letter that testimony from federal officials largely supported Mr. Lewis’s testimony, a full account of the events is not clear. Mr. Cuomo did not release other testimony.

....

Mr. Lewis also testified that Mr. Paulson told him “we do not want public disclosure” about possible government financing for Bank of America to help it complete the Merrill deal. Asked by the attorney general’s office whether he discussed disclosing Merrill’s greater losses to shareholders, Mr. Lewis said the issue never came up.

http://www.nytimes.com/2009/04/24/business/24cuomo.html

---

Mr. Lewis is one person whom I would love to introduce to my club.

[SeeHopeWin]

12. Amen on Lewis - I soooo want him gone!

Good morning to all.

Any idea if we will get real info. on the results for the banks?

[ozymandius]

15. The synopsis will say, "Banks faired better than expected.

Yet some challenges remain." Treasury rules forbid the use of words "bankrupt", "insolvent" and "flat broke" when referring to the eight major banks. :sarcasm:

[Dr.Phool]

25. I'm willing to bet that you're right.

We've seen this cartoon too many times already.

BTW, the economy is strong and getting stronger!

[UpInArms]

35. U.S. may remove Citi's Pandit: report

http://www.reuters.com/article/businessNews/idUSTRE53N1VY20090424?feedType=RSS&feedName=businessNews

(Reuters) - U.S. regulators who are concluding "stress tests" on banks may remove Citigroup Inc chief executive Vikram Pandit, the New York Post reported, citing sources it did not identify further.

The regulators may have to take such a step to show the government is taking as strong a stand on banks as it did with General Motors Corp when it removed Rick Wagoner, the paper said.

Citigroup finance director Ned Kelly told the paper in an interview: "Replacing (Pandit) would be dramatically destabilizing both for Citi and the system."

"Our recent quarterly results reveal the underlying strength of the franchise and Vikram Pandit's strategy at work to restore Citi to profitability," a Citigroup spokeswoman told the paper.

...more...

[Demeter]

16. Well, There's Nancy's Desire For a New "Percora" Investigation

As if Pelosi has ever produced anything....

[Festivito]

13. Debt: 04/22/2009 11,191,057,364,056.82 (DOWN 2,402,178,323.10) (Mostly FICA.)

(Debt up .051B$, i.e. tiny amount, FICA made up most of it.)

= Held by the Public + Intragovernmental(FICA)
= 6,898,755,078,442.32 + 4,292,302,285,614.50
UP 51,738,680.14 + DOWN 2,453,917,003.24

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 306,214,715 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,546.44.
A family of three owes $109,639.32. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 33 days.
The average for the last 23 reports is 6,532,623,326.03.
The average for the last 30 days would be 5,008,344,549.96.
The average for the last 33 days would be 4,553,040,499.96.
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$/day.
There were 64 reports in 92 days of Obama's part of FY2009 averaging 0.36B$ per report, 0.34B$/day so far.
There were 139 reports in 204 days of FY2009 averaging 8.39B$ per report, 5.72B$/day.

PROJECTION:
There are 1,369 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 19.0T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
04/22/2009 11,191,057,364,056.82 BHO (UP 564,180,315,143.74 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: 1,166,332,467,144.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*******
04/09/2009 +024,055,285,655.59 ------------**********
04/10/2009 +000,051,156,797.54 ------------*******
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******

65,211,623,729.42 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,526,425,560,797.75 in last 216 days.
That's 1,526B$ in 216 days.
More than any year ever, including last year, and it's 150% of that highest year ever only in 216 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 216 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=3845160&mesg_id=3845181

[Festivito]

87. Debt: 04/23/2009 11,184,922,662,862.85 (DOWN 6,134,701,193.97) (Nicely down.)

(The public debt, what we borrow from people, is down, and the FICA, what we owe ourselves to our SS is up -- both good things. Nearly heartwarming.)

= Held by the Public + Intragovernmental(FICA)
= 6,885,897,594,432.37 + 4,299,025,068,430.48
DOWN 12,857,484,009.95 + UP 6,722,782,815.98

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 306,220,886 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,525.67.
A family of three owes $109,577.01. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 6,226,570,372.07.
The average for the last 30 days would be 4,773,703,951.92.
The average for the last 31 days would be 4,619,713,501.85.
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$/day.
There were 65 reports in 93 days of Obama's part of FY2009 averaging 0.26B$ per report, 0.28B$/day so far.
There were 140 reports in 205 days of FY2009 averaging 8.29B$ per report, 5.66B$/day.

PROJECTION:
There are 1,368 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.9T$.
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)
04/23/2009 11,184,922,662,862.85 BHO (UP 558,045,613,949.77 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: 1,160,197,765,950.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*******
04/09/2009 +024,055,285,655.59 ------------**********
04/10/2009 +000,051,156,797.54 ------------*******
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******
04/23/2009 -012,857,484,009.95 -

54,097,000,070.34 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,520,290,859,603.78 in last 217 days.
That's 1,520B$ in 217 days.
More than any year ever, including last year, and it's 149% of that highest year ever only in 217 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 217 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=3846995&mesg_id=3847021

[ozymandius]

14. Fed’s Bear Losses Dominated by Commercial Real Estate

April 23 (Bloomberg) -- The Federal Reserve released its most detailed breakdown to date on the types of assets it accepted from Bear Stearns Cos. a year ago and the cause of losses on the portfolio.

The biggest losses in the $25.7 billion portfolio of Bear Stearns assets as of the end of last year came from commercial and residential mortgages, according to a report released by the Fed in Washington today. The central bank agreed in March 2008 to buy the assets so JPMorgan Chase & Co. would acquire Bear Stearns and avert the investment bank’s bankruptcy.

....

The Fed wrote down the value of former Bear Stearns commercial-mortgage holdings by 28 percent to $5.6 billion and residential loans by 38 percent to $937 million as of Dec. 31, the central bank said today. Properties in California and Florida accounted for 45 percent of outstanding principal of the residential mortgages.

“It’s just the tip of the iceberg when it comes to losses in the commercial real estate market,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. Lenders “were over-optimistic about tenant occupancy rates and rents,” he said.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aFy3AKJvQVUo&

---

Just a thought:what would be the optimal number on the Fed's balance sheet?

[Demeter]

17. Better Ask "What Would Be the Truth?"

Because we will get there in the end--money is like that. I don't think the banksters have come to that conclusion yet.

You can hide torture (kill the witnesses, and victims). You can conceal most crimes--but theft or loss of money will out.

[Hugin]

28. I agree.

It's one of the only positive features of a Fiat Currency. (Imagine the Irony in 'Fiat'.)

Anyway, this monetary system is based on confidence in the system. If they aren't able to restore the confidence in their ill gotten gains... It becomes worthless. Just paper. So, if they break the system too much and exclude too many people... They destroy the very system they are trying to exploit.

That is why there are rules on a monetary system. It maintains the implied value on the unit of exchange. By living like they believe rules are for everyone, but, them... The rules of exchange are broken and the implied value is lost. So, in effect these so-called Libertarians/Free Marketeers are ironically heavily reliant on the Government system to maintain the value of what they covet.

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

"Fiat money is money declared by a government to be legal tender. the term derives from the Latin fiat, meaning "let it be done". Its realization as Fiat currency achieves value because a government accepts it in payment of taxes and says it can be used within the country as a "tender" (offering) to pay all debts. In effect, this allows it to be used to buy goods and services and to pay tax. The most widely-held reserve currency, the US dollar, is a fiat currency. Although they are not redeemable for gold or silver, all Federal Reserve Notes in circulation must be collateralized by assets of the Federal Reserve."

[Demeter]

18. China gold reserves apparently doubled

http://www.marketwatch.com/news/story/china-gold-reserves-apparently-doubled/story.aspx?guid={7EDBF160-456B-46AD-B68F-3541D15B611D}&siteid=yahoomy


HONG KONG (MarketWatch) -- China has added to its gold reserves and now holds 1,054 metric tons of the yellow metal, according to a Friday report by the Xinhua News Agency, which cited comment by Hu Xiaolian, head of the State Administration of Foreign Exchange.

Hu said that China's gold reserves had risen by 454 metric tons since 2003 and that the total was being reported to the International Monetary Fund as per the organization's rules.

A Dow Jones Newswire report said the figure cited was nearly double China's reported gold reserves as of the end of last month, but noted that it wasn't clear which gold reserves Hu was referring to.
She said China's gold reserves now rank fifth in the world among nations which publicly disclose their holdings.

Analysts said China bullion buying reflects efforts to diversify their nearly $2 trillion stockpile of foreign exchange reserves.

[Ghost Dog]

55. China's big gold buy barely kept pace with forex

April 24 (Reuters) - The big surprise in China's revelation on Friday that it has secretely added over 450 tonnes of gold to its foreign reserves over the past six years may be the fact that it hasn't bought far more than that. Now, many analysts say the rare public disclosure may be a prelude to Beijing accelerating its purchases -- possibly from big government agencies or central banks -- as it worries about the erosion of its $2 trillion cash pile.

In the first public comment on top-secret gold holdings in years, Hu Xiaolian, head of the State Administration of Foreign Exchange (SAFE), told Xinhua news agency that the country's reserves had risen by 454 tonnes from 600 tonnes since 2003. He said the gold had been purchased from domestic production.

The figure confirmed what many gold bugs have suspected for years -- that Beijing has been quietly amassing reserves. The surprise is actually how conservative its approach has been. As a proportion foreign exchange reserves, which have risen five-fold over the same period, gold now stands at a tiny 1.6 percent, versus 1.7 percent in 2003, according to Reuters calculations, suggesting Chinese disenchantment with the dollar has yet to significantly influence its buying patterns.

But things may be changing, and a quickening pace of gold buying would lend considerable support to prices that have threatened to stall at around $900 an ounce -- unless, as many analysts expect, it buys the gold through private channels. The IMF has approved selling just over 400 tonnes of its gold. 'Central banks will go straight to China rather than mess about or spook the market. China will be a ready buyer and pay a decent price,' said Jonathan Barratt, Managing Director of Commodity Broking Services in Sydney.

...

The announcement that Beijing was sitting on 1,054 tonnes of gold bullion, up 75 percent in the past six years, pushed China up to the fifth place in the table of gold-holding nations. For a graphic showing the world's biggest gold holders: - graphic - In some regards, the sum is sizeable, about the same amount that Europe's central banks and the International Monetary Fund sell each year as they gradually and publicly destock. By other measures the sum is paltry. The SPDR gold trust , the biggest exchange traded fund, saw its holdings rise by the same sum over just six months.

By Reuters calculation, China's holding of gold are worth around $30.9 billion at current prices, while the U.S. gold mountain is valued at $238 billion. The United States holds 79 percent of its foreign currency reserves in gold. 'We recommend our clients hold 5 percent of their investments in gold. On that basis China has another 3,300 tonnes to buy,' says ANZ's senior commodities analyst Mark Pervan. And buying more gold would fit well with Beijing's publicly stated aim to build a bigger inventory of all raw materials, which would also reduce its exposure to the greenback.

/... http://uk.biz.yahoo.com/24042009/323/china-s-big-gold-buy-barely-kept-pace-forex.html

[Demeter]

77. There's No Reason to Think China's Numbers Are Any Better Than Ours

but that was interesting.

[Demeter]

20. Bailout Inspector General to Warn That Public Private Partnership Open to Fraud

http://www.nakedcapitalism.com/2009/04/bailout-inspector-general-to-warn-that.html


Checks and balances may not be completely dead in the US after all, but we need to see what transpires after the release of the report by Neil Barofsky, special inspector general for the TARP, which is out Wednesday. The New York Times appears to have gotten its hands on the whole report; the Financial Times also provides some details. (I assume they are pre-released and embargoed, but the Times and FT must have gotten them through separate channels as well).

Timothy Geithner will appear before Congress to discuss the report's findings, and he clearly won't do much more than try to blunt criticism. However, the most damning comments are on the public private investment partnership, which has gotten a thumb's down from pretty much everyone except those who will benefit directly from it. The Treasury already opened up the legacy securities portion to more money manager applicants after complaints that the only a very few firms would qualify,. That would reduce the number of possible bidders and presumably lead to lower prices when fetching higher prices presumably is the point of the exercise. But that argument presupposes a fair and open process.

Nevertheless, the fact that Treasury already modified some provisions suggests they will do so again to diffuse attacks. But I doubt that we will see more than cosmetic changes.

From the New York Times:

The Treasury Department’s most ambitious plans to rescue troubled banks — partnerships between the government and private investors, backed by the Federal Reserve — are inherently vulnerable to fraud and should not be started without stronger safeguards, a top government investigator warned in a report to be released Tuesday.


Yves here. "Inherently vulnerable" is stern stuff, as is the call to halt the program unless changes are made. This throws down a gauntlet. Back to the article:

The report also warned that the Treasury’s $700 billion Troubled Asset Relief Program has evolved into a $3 trillion effort of “unprecedented scope, scale and complexity” and comes with too little oversight and too little information about what companies are doing with the taxpayer money they are getting.....

Mr. Barofsky was particularly critical of the Treasury Department’s refusal to demand detailed information from banks and other financial institutions about what they are doing with the money they receive.

Noting the widespread public outrage unleashed over the Treasury’s huge payments to the American International Group, the failing insurance conglomerate, Mr. Barofsky warned that Treasury officials were jeopardizing the credibility of their efforts by not requiring companies to disclose far more about their use of taxpayer money.

“Failure to impose this requirement with respect to the injection of yet another $30 billion into A.I.G. would not only be a failure of oversight, but could call into question the credibility of the government’s efforts,” he said. He was referring to bailout money that had been pledged, but not yet delivered, to the insurance giant.

The inspector general was particularly pointed in his criticism of the Obama administration’s plan to buy up questionable assets from banks. That plan calls for the Treasury to spend $100 billion to buy up troubled mortgages and mortgage-backed securities.


Yves here. We'll see what we see later in the AM, but the Times deems the report (at points, at least) "particularly critical....particularly pointed". It will also be noteworthy to see whether the Congressmen fall in with the tone of the report in their questioning of Geithner tomorrow, or are more deferential. Back to the article:

Mr. Barofsky said the plan posed “significant fraud risks,” especially when it came to buying up securities backed by exotic mortgages made during the peak of the housing bubble, when the excesses of poorly documented loans and no-money-down loans reached their zeniths.

The report said that the Federal Reserve intended its lending program, known as the Term Asset-Backed Securities Loan Facility, or TALF, to finance new lending rather than to buy up existing assets. It warned that the Fed was not currently planning to examine the securities that it would finance, and would be relying instead on the evaluation by credit rating agencies that originally failed to spot the dangers of subprime mortgages.

“Credit ratings, cited as one of the primary credit protections in TALF as currently configured, have been proven to be of questionable value,” the report said. “The wholesale failure of the credit rating agencies to rate adequately such securities is at the heart of the securitization market collapse, if not the primary cause of the current credit crisis....”


Yves again, I'm gobsmacked that Barofsky is making an issue of the ratings. Not that he shouldn't, mind you, but the Fed relies on ratings for pretty much all of its collateral haircut decisions. Admittedly, the agencies' record was particularly bad on complex structured securities, but this charge, while aimed at the TALF, raises other uncomfortable issues for the Fed.

In general, the failure of the Treasury, either under Bush or Obama, to do anything to revamp the rating agencies' role is a telling sign of their lack of dedication to reform. There are a number of good ideas as to how to fix them, and unlike just about any other aspect of the mess, this could be addressed in isolation. But no, even the rating agencies seem to be sacred cows. Back to the article:

Senator Charles E. Schumer, Democrat of New York and a member of the Senate Banking Committee, said some of the inspector general’s criticisms about buying up “legacy assets” — usually troubled mortgage-backed securities — made sense.

“There are a few problems with using the TALF program to buy up legacy assets,” he said. “First, it’s rewarding the worst behavior — buying no-doc loans.” Second, he said, the public-private program “is a very rich subsidy program to begin with. You have to ask whether it needs the extra enrichment of TALF, particularly when it involves the most egregious of mortgages.”

[Hugin]

31. Where is Tansy_Gold's ITYS stamp?

I'm needing it! :grr:

I recall ranting and railing about this very thing last fall. (Along with just about everybody with a computer, phone, and fax machine.)

Practically pounding down the doors of Congress saying, "DON'T DO IT!"

Yet, we were ignored and instead the lobbyists held more sway.


Two words, Never again...

[Tansy_Gold]

82. It's not just my ITYS stamp at this point.

It seems like every day for the past week someone or other has been trumpeting the risk of fraud, and I don't mean just SMWers. I mean, at the beginning it was kind of well, duh, guys, we've been saying this for months, in the sense that we here knew what was going on or at least what the potential risks were.

But now EVERYONE seems to be saying it. How freakin' deaf can the (s)Administration be?


Tansy Gold

[Demeter]

21. Nationalization in Denial?

http://www.nakedcapitalism.com/2009/04/nationalization-in-denial.html

As this blogger and others have noted, the bank rescue programs have been designed to work around constraints more than to fix the underlying problem, which is a lot of bad debt that needs to be restructured and renegotiated, including the debt of the banks themselves. Instead, the boundary conditions have included "No more Lehmans", "We don't do nationalization", "Sanctity of contracts" (aka no trying to cut the securitization Gordian knot), an unwillingness to have bank bondholders take hits (with WaMu an odd exception) plus a fear of going back to Congress for more dough.

As the economy keeps downshifting, the Administration seems to be coming to the recognition that it has to relax one of those constraints, but it appears to perceive otherwise. From the New York Times:

In a significant shift, White House and Treasury Department officials now say they can stretch what is left of the $700 billion financial bailout fund further than they had expected a few months ago, simply by converting the government’s existing loans to the nation’s 19 biggest banks into common stock.

Converting those loans to common shares would turn the federal aid into available capital for a bank — and give the government a large ownership stake in return.

While the option appears to be a quick and easy way to avoid a confrontation with Congressional leaders wary of putting more money into the banks, some critics would consider it a back door to nationalization, since the government could become the largest shareholder in several banks.

The Treasury has already negotiated this kind of conversion with Citigroup and has said it would consider doing the same with other banks, as needed. But now the administration seems convinced that this maneuver can be used to make up for any shortfall in capital that the big banks confront in the near term.


So we may get to the government as majority owner in some banks (with a Citi conversion, its stake would be 36%) and unwilling to act like it (or perhaps only until the next regime change). And let us not forget that significant minority stakeholders generally have significant rights, particularly when they come in as rescuers (they extract more). Board seats and lots of veto rights are the usual minimums.

As Joseph Stiglitz and pretty much any private equity investor would tell you, the worst position is to have ownership and no control. The US choosing to act as absentee owner (or merely throwing its weight around on the odd political hot button) is a choice to relinquish authority to the detriment of tax payers and the benefit of banksters. But that seems to be the Obama bank policy hallmark, so why should this decision be any different?

[DemReadingDU]

26. Continuation NPR Michigan series

NPR Series (all segments): Remaking Michigan, Retooling Detroit
http://www.npr.org/templates/story/story.php?storyId=103321042

Today's 3 segments about Michigan

Architect, Rehabber Find Riches In Detroit Ruins
http://www.npr.org/templates/story/story.php?storyId=103414502

Detroit's Big Screen Image Problem
There is a 5 minute video of some movies made in Detroit
http://www.npr.org/templates/story/story.php?storyId=103415990

Celeste Headlee: Why I Love Detroit, And This Sculpture
Celeste Headlee is a reporter based in Detroit.
http://www.npr.org/templates/story/story.php?storyId=103412267


link back to previous NPR Michigan segments
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3845160&mesg_id=3845319

[MARALE]

67. I have been listening to these on the way to work

I really like NPRs segments. They are usually well thought out and always show a different side to things that is very interesting.

[DemReadingDU]

81. Me two

When I listened this morning, I heard the audio clip of the movies made in Detroit. Then when I was posting the links today, I noticed there was also a video clip of the movie segment. So if you have a few extra minutes, watch the video clip too.

[UpInArms]

27. dollar watch

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

Last trade 84.902 Change -0.521 (-0.67%)

Dollar, Yen And Risk Appetite Await G20 Meeting And US GDP

http://www.dailyfx.com/story/bio1/Dollar__Yen_And_Risk_Appetite_1240536010598.html

Market sentiment has stabilized over the past week as traders wait for fundamentals to either catch up to optimism or draw the budding recovery to a grinding halt. Ongoing earnings releases, first quarter growth reports from the world’s largest economies and a series of meetings attended by global policy makers can decide the fate of growth and optimism for months to come.



• Dollar, Yen And Risk Appetite Await G20 Meeting And US GDP
• Do Better Than Expected Earnings Signal A Turn For The Economy?
• Where Will Optimism Develop Without Confirmation Of A Recovery?

Market sentiment has stabilized over the past week as traders wait for fundamentals to either catch up to optimism or draw the budding recovery to a grinding halt. Ongoing earnings releases, first quarter growth reports from the world’s largest economies and a series of meetings attended by global policy makers can decide the fate of growth and optimism for months to come. Heading into this pervasive fundamental wave, traders from all asset classes have taken to caution. Reflecting the more speculative side of the market, the benchmark Dow Jones Industrial Average has curbed its most aggressive rally in two years. On the other side of the coin, interest in Treasuries has recovered while risk premiums through credit default swaps and other financially sensitive securities have curtailed their slow improvement. Unsurpassed liquidity makes the currency market the most discerning gauge of risk appetite versus risk aversion though. The Carry Index has extended the timid decline that began at the beginning of this month. However, looking beneath the surface of this complex measure, panic is further subsiding while expectations for returns slacken. Volatility for the broader currency is the lowest it has been since before the October market crash and credit seizure (despite the presence of event risk). In contrast, the scales of risk/reward have been balanced by shrinking yield forecasts (the interest rate outlook) and souring expectations for capital returns (risk reversals).

A sort of equilibrium has been struck between the potential for limited rates of return and the fading sense of fear that has encouraged reinvestment into the speculative areas of the market. However, as we have said many times before, this should not be considered a genuine recovery. Rather than a reduced pace of recession, a natural return to optimism and sentiment must come from positive forecasts for economic activity rather than a diminished pace of contraction. The round of event risk scheduled over the coming weeks provides the most comprehensive measure for health that we have been presented in months. The most pressing burden on sentiment are the gatherings of policy officials in Washington DC. On Friday, the G7 and G20 will convene; but the topics for discussion are not certain. The most meaningful outcome to the gathering of finance ministers would be a list of definitive steps and responsibilities aimed at turning individual and national rescue plans into a global one. This was the aim of the last summit in London; but so far, there has been little in the way of remarkable progress towards this goal. Whereas government policies for economic and financial aid support risk and reward equally, earnings activity and scheduled GDP releases will impact one or the other. The UK and US growth reports have obvious implications; but the accounting data is a more nuanced measure of risk through delinquencies and writedowns.

...more...

Dollar/Cad Buy Recommendation Issued @1.2100

http://www.dailyfx.com/story/market_alerts/technical_alert/Dollar_Cad_Buy_Recommendation_Issued__1_2100_1240565429942.html

Despite the sharp pullbacks seen on Thursday, the overall structure still remains quite constructive with the market posting a series of medium-term higher lows over the past several months. A fresh higher low is now sought out by 1.1980 (16Apr low) ahead of the next major upside extension back above 1.3065 over the coming weeks. As such, we recommend looking to buy into the current pullback with additional weakness seen limited to the 1.2100 area which also coincides with the projected “Average True Range” (ATR) low for Friday, along with the 78.6% fib retracement off of the 1.1980-1.2510 recent move. Strategy: BUY @1.2100 FOR A 1.2500 OBJECTIVE, STOP @1.1950. Stops to be trailed to cost on a break back above 1.2150. If trade triggers and 1.2150 not broken, position to be closed out at NY close on Friday. Recommendation to be removed if not triggered by NY close on Friday.

...more...

[UpInArms]

38. China's dollar-dump plan to be G7 focus

http://www.marketwatch.com/news/story/Chinas-dollar-dump-plan-G7/story.aspx?guid=%7BDFCB68AC%2D8BC2%2D4359%2DA1CA%2D76542EAFBA1E%7D

LONDON (MarketWatch) - While foreign exchange is unlikely to be the subject of bold public pronouncements when the world's most powerful finance ministers and central bankers meet Friday in Washington, China's call for the replacement of the U.S. dollar as the world's leading reserve currency is likely to be a hot topic behind closed doors, currency strategists said.

Namely, foreign-exchange traders will be looking for any clues to discussions with Chinese officials as policy makers around the world attempt to piece together the implications of remarks by China central bank governor Zhou Xiauchuan in March for the eventual replacement of the U.S. dollar as the world's main currency with special drawing rights, the quasi-currency issued by the International Monetary fund.

The implication of such a policy would be a weaker dollar, as central banks move to diversify away from the world's largest reserve currency. And that's something that makes a number of policy makers, including officials from the 16-nation euro zone, nervous, analysts said.

The prospect of a substantially weaker dollar is unwelcome to policy makers in the euro zone, Japan or other countries worried about their own exports.

The main thrust of China's message is that it wants to diversify holdings of foreign exchange reserves in a way that more closely mimics the make-up of SDRs, said Simon Derrick, currency strategist at Bank of New York Mellon.

That means going from reserve holdings that stand at more than 60% dollars to around 44%. For the euro, holdings would rise to around 34% from 31%.

...more...

[54anickel]

39. Ch-ch-ch-ch-Changes ...

(Turn and face the strain)
Ch-ch-Changes
Buck won't make me a richer man
Ch-ch-ch-ch-Changes
(Turn and face the strain)
Ch-ch-Changes
Just gonna have to be different, man
Time may change me
But I can't trace time

[Ghost Dog]

32. Ifo lifts world stocks, euro; yen also firmer

LONDON (Reuters) - World stocks and the euro rose on Friday after a bigger-than-expected rise in Germany's key corporate sentiment survey, while better earnings from several regional U.S. banks also boosted investor morale.

The low-yielding yen hit a 4-week high against the dollar, weighed by nervousness surrounding the looming outcome of the U.S. government's stress tests on 19 major domestic banks, due on May 4. The Ifo Institute's business climate index rose to 83.7 in April, against a consensus for a rise to 82.3, from 82.2 in March.

The focus is also on banks after big U.S. regional banks, including PNC Financial Services Group (PNC.N) and Fifth Third Bancorp (FITB.O), reported better-than-expected first-quarter earnings on Thursday.

...

MSCI world equity index .MIWD00000PUS rose 0.6 percent on the day, while the FTSEurofirst 300 index .FTEU3 extended gains after the Ifo survey to stand up 0.8 percent.

Emerging stocks .MSCIEF rose half a percent.

...

The euro rose 0.8 percent to $1.32519, hitting the session high after the Ifo survey.

The yen, which tends to attract safety-seeking flows, hit a 4-week high of 96.65 per dollar with investors nervous about the result of the U.S. stress tests.

/... http://www.reuters.com/article/wtUSInvestingNews/idUSTRE53M6QB20090424

[Ghost Dog]

33. Sterling extends losses after UK GDP data

LONDON, April 24 (Reuters) - Sterling extended losses on Friday, hitting a two-week low against the euro after data showed that the UK economy shrank more than expected in the first quarter.

Britain's gross domestic product fell 1.9 percent on the quarter in the first three months of the year, contracting by its sharpest rate in 30 years, more than expectations for a 1.5 percent contraction .

Sterling <GBP=D4> fell more than half a cent to a session low of $1.4599, compared with around $1.4665 before the announcement.

The pound also fell against the euro, which climbed as high as 90.76 pence <EURGBP=R> according to Reuters data, its strongest level in roughly two weeks.

Britain's FTSE 100 .FTSE was little impacted after the UK data, trading 1.3 percent higher on the day.

/. http://www.reuters.com/article/marketsNews/idINLO4015220090424?rpc=44
____

[54anickel]

53. A real tug o' war going on in the gold chart. What's that all about? n/t

[Ghost Dog]

57. I suppose it's about speculation on China's moves

http://www.reuters.com/article/marketsNews/idAFN2441409020090424?rpc=44

* Gold futures traded higher but did not rally further because
the market had already anticipated increasing central banks'
interest in the yellow metal - traders.

* China's announcement indicated global monetary authorities,
not just investment funds, are viewing gold with a stronger interest
- Jeffrey Christian, managing director of CPM Group.

* Other analysts, however, said that the amount of gold bought
by China was disappointing.

* China's confirmation of its gold holdings was not surprising
given the broad rise in all the country's reserves - John Lipsky,
first deputy managing director of the International Monetary Fund.


* The IMF last year approved the sale of 403 tonnes of gold from
its stocks of 3,217 tonnes (103.4 million ounces) as part of a plan
to put its finances on a sounder footing and create an endowment
with the proceeds.

* China's move will raise expectations of further Chinese
purchases, and not just about the IMF's proposed sale - John Reade,
head of metals strategy at UBS.

/...

There are supposed to be some backroom discussions on future reserve currency at the G7 bankers' meet today also. :shrug:

[Ghost Dog]

59. The UK economy slumps

The U.K. economy slumped in the first quarter of 2009, in the biggest contraction since the rise of Margaret Thatcher in 1979. GDP fell 1.9% after declining 1.6% in the previous quarter.(Note 1) Particularly vulnerable to the crisis of the world’s financial system, the UK with the greatest dependency on financial investments of any nation in the world has seen the revenues of its banks and finance houses slump, while at the same time desperately trying to recapitalise its banks against their current losses.

U.K. business services and finances shrank 1.8 %, the most since records for the category began in 1983. Manufacturing contracted 6.2 %, the most since at least 1948. This is the first time GDP has contracted by more than 1 % for two consecutive quarters since modern records began after World War II. UK unemployment rose in March to the highest level since Gordon Brown's Labour Party came to power in 1997.

Debt, debt, debt

Alistair Darling, New Labour’s chancellor, forecasts that the budget deficit this year will rise to £175 billion ($257 billion) or 12.4 % of GDP, the highest of any G20 nation. But Labour’s money has not been first of all directed towards reflating the economy, saving jobs or staving off crisis. Its Keynesian reflationary measures like its VAT cut and car scrapping scheme are only around 2% of GDP, amongst the lowest of any of the major powers. Rather Labour has spent £1.4 trillion ($2.1 trillion) bailing out British banks.

The government has approved the sale of a record £220 billion of gilts, or government debt, in the current fiscal year - 50 % more than last year, more than doubling government debt, which will rise from around 37% of GDP to around 80% of GDP. As debt is paid for out of taxes, this will put an ongoing pressure on government revenues and serve as a perpetual excuse to cut public spending.

It will be supplemented by so called quantitative easing, the Bank of England is printing £75 billion to buy bonds after it cut the key interest rate to 0.5 %, the lowest since it was founded in 1694. This aims to reduce interest rates by lowering the price of guilts without adding to the debt burden. Unlike the sale of gilts, It increases the states assets at no cost or devalues its debt by the same amount. Indeed the effects of quantitative easing are built into the government’s estimates for nominal (i.e. not real) GDP growth after 2011. New Labours forecast growth rates, roundly derided as too optimistic, are based on an accounting trick by increasing the money supply by around 5% of GDP, the nominal value of GDP will increase by the same amount.

Markets not happy

But the UK is not the USA. Debt holders know when they are being taken for a ride and as the Bank of England has opened the printing presses, the pound, gilts and U.K. corporate bonds have fallen on concern Britain will lose its AAA credit rating. Moody’s Investors Service said the government is “taking risks” with public finances. Britain’s “balance sheet is deteriorating rapidly, due to a combination of weakening revenues” and bank bailouts, “the maintenance of the government’s AAA ratings relies on the assumption that the current deterioration of debt affordability metrics is reversible over a foreseeable horizon,” if the government chooses “to operate with a structurally higher level of indebtedness, this would likely have rating implications over time”.

By printing money the UK government devalues the debt it owes. That's no good for the City. The financiers are determined that they will not be the ones to pay for the crisis that they created.

Battle postponed

The scale of the crisis was anticipated in Alistair Darlings budget earlier this week. Darlings strategy is simple. He aims to ride out the worst of the recession with unprecedented levels of government borrowing before making the working class pay a couple of years down the road. The predicted contraction of public services in 2011 and on is, as the Institute of Fiscal Studies have shown more severe than that attempted under Thatcher in the early 1980s. Its even worse when the effect of rising debt repayments are dialled into the calculation.

Darling’s pledge to raise taxes on the rich has been hailed as the return of class politics. It is not. Darling will increase the top rate of income tax from 40% to 50% and close loop holes for pensions with the aim of producing an estimated £7bn from the ultra rich financiers, who will now control the UKs state finances. But only so that he can pay them a part of what he now owes them.

Oh and Kate Moss and Wayne Rooney may lose £500,000 a year.

The real victims of the states indebtedness will be the workers. Darling aims to postpone the class war for a couple of years – at least on New Labour’s timetable – he wants the assault on public services will start in 2011, when he hopes that the world economy will once more be on the upswing.

For the first time in a decade, whoevers in power, there will be a major class wide assault on public services. The piecemeal privatisation. The cushioning of PFI with new money. The replacement of public with private services. That’s all over.
Darling’s budget is a declaration of war.


(1) Note unlike the USA the UK does not report its GDP at an annual rate. To get the equivalent with the US multiply by four, so this quarter was -7.6% annualised.

/. http://www.permanentrevolution.net/entry/2668

[Demeter]

43. Man the Pumps! It's Going To Be One of THOSE Days!

Lift dat barge, tote dat bale, get a little drunk, and you land in jail...

[Hugin]

60. Is Microsoft facing its Ozymandias moment? (Guardian)

Charles Arthur
Friday 24 April 2009

'Oh dear, Mini-Microsoft – the anonymous blogger inside Redmond who has agitated for years for the company to slim its staffing down and focus on results – is not pleased. The other day he walked over to the new building called "The Commons" on the Microsoft campus and revelled in its size and grandeur: " I walked around admiring the scope of the project, thinking 'This is what Windows built. This is what Office built'."

Then reality intruded. "I then reflected on the irony that it's Mr. Robbie Bach's Entertainment and Devices moving into the new campus with The Commons. Windows and Office funded this extravagant place for the folks who managed to burn through $8,000,000,000USD+ on the Xbox, be shown how it's done right from Nintendo with the Wii, dash the Zune against the juggernaut iPod, and have the iPhone drop-kick WinMobile to Mars."'

More... http://www.guardian.co.uk/technology/2009/apr/24/microsoft-revenues-future-concern

__________________________________________________________

Vanity post for Ozy. :lol:

[UpInArms]

63. Federal officials privately issue banks' 'stress tests' results

http://www.latimes.com/business/la-fi-stresstests25-2009apr25,0,5490195.story

Reporting from Washington -- Federal officials today began privately telling executives from the nation's 19 largest banks the preliminary results of "stress tests" meant to determine if the institutions need more government bailout money.

The results will not be made public until May 4, and banks are not allowed to reveal them. But the Federal Reserve, which is overseeing the process, today released details of the data and assumptions used to conduct the tests. The 21-page white paper was issued ahead of the actual results to give the public time to understand the process and data, according to a senior Fed official who spoke on condition of anonymity because the process is ongoing.

More than 150 senior bank examiners, economists and other officials from three federal bank regulatory agencies spent the last two months scouring the books of the 19 banks with more than $100 billion in assets, including JP Morgan Chase, Citigroup, Bank of America and Wells Fargo. The banks combined hold two-thirds of the assets of the entire U.S. banking system and more than half of the loans.

Treasury Secretary Timothy F. Geithner and Fed officials have stressed that most banks are well-capitalized. But if the recession worsens significantly, Obama administration officials worry that some of the largest banks might not have enough money to handle the additional losses they would face.

The stress tests are designed to determine if the banks need to raise more money. If so, they would be given six months to raise it privately before the federal government would step in with additional bailout money to assure that they would not fail. So far, the 19 banks have received about $214 billion in bailout money from the $700-billion rescue fund, and the stress tests could determine if the Obama administration needs to ask Congress for more money for the fund.

Regulators from the Federal Reserve, Federal Deposit Insurance Corp., and the Office of Comptroller of the Currency analyzed each bank's reserves and possible losses under two scenarios, according to the details released today.

The first scenario was based on the consensus of various professional forecasters for economic conditions through the end of 2010. They include the nation's economic output dropping by 2% this year before rebounding to produce 2.1% growth in 2010, housing prices falling 14% this year and another 4% next year and the unemployment rate averaging 8.8% next year.

The second scenario was designed to be "worse case" that would include "market shocks" similar to what took place the second half of last year, according to the Federal Reserve. The adverse scenario assumes economic output dropping by 3.3% this year before rebounding weakly to .5% growth in 2010. It assumes that housing prices will plummet 22% this year and another 7% next year; and that unemployment will average 8.9% this year and 10.3% in 2010.

...more...

I'm going to repeat this part:

JP Morgan Chase, Citigroup, Bank of America and Wells Fargo. The banks combined hold two-thirds of the assets of the entire U.S. banking system

:wtf:

[Hugin]

64. If I think way back...

I remember saying using financial instruments to dilute risk was MAYBE a good idea, but, when paired with the mega-consolidation of the financial sector... It was a disaster in waiting.

I award myself a gold star for today.

[alcibiades_mystery]

65. Actual Marx quote

"Hegel said that all great historical events and personages appear, so to speak, twice. He forgot to add: the first time as tragedy, the second as farce."

It's precisely Marx's point that HISTORY NEVER REPEATS ITSELF (In other words, what's different about a historical occasion is far more important than how it's the "same" as some previous event. These are the opening lines from The Eighteenth Brumaire of Louis Bonaparte, which is precisly a historical analysis of how the then ruler of France tried to recreate himself in the image of previous regimes, to utter failure.)

[Demeter]

78. Somehow I don't think That will Hold With This Greater Depression

There won't be nobody laughing.

[alcibiades_mystery]

79. A farce isn't necessarily funny

So much as ridiculous.

[RUMMYisFROSTED]

66. 8K is the floor.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3799186#3800319


3-25-09

[Demeter]

80. Ozy, About Banker Suicides

http://www.dailypaul.com/node/76874

[ozymandius]

85. Ha! Brilliant!

I wish this were a constantly updated tally. Then I would link to it on the OP. If someone runs across a site that updates this macabre banker statistic - please let me know.