STOCK MARKET WATCH, Wednesday May 19

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday May 19, 2010

AT THE CLOSING BELL ON May 18, 2010

Dow... 10,510.95 -114.88 (-1.08%)
Nasdaq... 2,317.26 -36.97 (-1.57%)
S&P 500... 1,120.80 -16.14 (-1.42%)
Gold future... 1,224 +9.10 (+0.75%)
10-Yr Bond... 3.32 -0.03 (-0.87%)
30-Year Bond 4.21 -0.03 (-0.71%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren

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

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

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Today's Reports

08:30 Core CPI Apr
Briefing.com 0.0%
Consensus 0.1%
Prior 0.0%

08:30 CPI Apr
Briefing.com 0.0%
Consensus 0.1%
Prior 0.1%

10:30 Crude Inventories 05/15
Briefing.com NA
Consensus NA
Prior 1.95M

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

[ozymandius]

2. Oil falls near $68 to 8-month low on Europe fears

SINGAPORE – Oil prices fell to near $68 a barrel Wednesday in Asia, extending losses to an eight-month low as mixed U.S. crude supply figures failed to stem a two week sell-off.

Oil inventory data from the American Petroleum Institute late Tuesday was mixed. Crude and distillate supplies fell while gasoline stocks rose. Supplies at the key storage terminal in Cushing Oklahoma rose to a fresh record high.

The Energy Department's Energy Information Administration announced its weekly inventory data report later Wednesday.

In other Nymex trading in June contracts, heating oil fell 1.47 cents to $1.9468 a gallon, and gasoline dropped 2.3 cents to $2.0203 a gallon. Natural gas was down 1.3 cents at $4.329 per 1,000 cubic feet.

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

[hamerfan]

15. Hooray!

Cheap gas for all!
Oh, wait....

[Demeter]

3. Imagine my blurry, insomnia-driven shock

to find Ozy up and at them! Good 5:30 AM morning, Ozy!

I'm celebrating the liberation of our little "village" from an evil dictator. Our Board President is neutered and on her way out. The staff will not be receiving any further threats of firing, things will cease to go "missing", and if I can help it, those neighbors who face losing their houses will be able to sue for enough funds to buy them back...this is more problematic, but not impossible.

Well, since we are both here, I guess I could post a few nuggets...

[ozymandius]

5. Good morning, Demeter.

:donut: :donut: :donut:
Yo have mentioned the callous cold actions and motives of your president. I am glad that her ass has a date with the doorknob. Good news, too, about a glimmer of hope for your neighbors who have fallen on hard times. Will you take up the mantle as president?

[Demeter]

10. Not necessary

Soon-to-be-ex president walked out halfway through meeting--and it was so pleasant! The VP took over and did very creditable job. Anyone of the remaining 6 could do it, and we would all be quite content. I'm finally getting functional in the Treasurer job--as senior member, I would hate to turn it over to anyone else to start from the beginning. The learning curve was painful, and none of the others are any more an accountant than I. Although a CPA that is also a co-owner has said that now that our books are cleaned up, she could safely join the board, as she would not be held responsible for liability (it's complicated and I don't pretend to understand the CPA rules). I really don't need another job of that magnitude.

It will take some healing--and some disinfectant. But it's been 6 years' effort to get this situation rectified. I'm pooped.

[Demeter]

30. Today's Musical Note

http://www.youtube.com/watch?v=HFs4GSXxquw&feature=related

[Ghost Dog]

40. Heh heh heh heh heh...

Nice one.

http://www.youtube.com/watch?v=lUowGzwC-bE

[Tansy_Gold]

47. Or. . ...

http://www.youtube.com/watch?v=jsaTElBljOE

[Ghost Dog]

50. Um. No comment, TG.

Ffff. It looks like, all the major hotels in Geneva are full. I'll have to travel on spec.

[Dr.Phool]

53. That's where they're all at! They're empty in Clearwater Beach.

Well, maybe except for the Scientology headquartered, Fort Harrison Hotel.

[Ghost Dog]

57. Genève is a small town

(Pop. probably less than 500,000).

With lots of big and small, straight and weird, banks and/or weird, I repeat, stuff.

The Crédit Suisse, unlike, in my opinion, UBS, is tolerable, though.

I'm also ok with Nestlé, for example. They're quick to recognise, and learn, and correct, mistakes.

Once you get upstairs.

[Tansy_Gold]

61. LOL -- it'll be 100 here by the week-end, so

the winter visitors have left and I'll bet the gold Canyon Best Western is just about empty.



Tansy Gold, who is soooooooooooooooooooooooooooooooo glad summer is finally arriving, although the long spring has been a delight to her electric bills. . . .

[TalkingDog]

88. I don't know about the board you are on, but on just about any non-profit

board, the members of the board hold legal liability in the event of a failure of the organization. Also for any malfeasance that may occur during their tenure.

I wouldn't join a board with wonky books either...and I'm an artist.

[Tansy_Gold]

95. Depends on whether the organization is incorporated.

I belong to an arts organization that is adamantly opposed to the "politics" of incorporation. They refuse to recognize that as long as they are just "the board of @^%)*&S* Artists' Group" they are personally liable for anything that happens. All it will take is a single disgruntled artist who gets rejected for one of the group's juried shows and decides to sue. . . .

My mom was on the board of her condo association and the first thing everyone asked her is "ARE THEY INCORPORATED??" and when she said yes we all breathed a sigh of relief, since that pretty much relieved her of any personal liability.



TG

[Demeter]

97. I've Just Found Out The Real Problem

It's actually a two-pronged problem.

The first problem is: the management company we hired has a clause in its contract that can open the way to control fraud--embezzlement--by the president, which the president has started to dabble in, to what extent, I am not yet sure, but I am guessing it's my job to find out.

The second prong is that the president is psychotic. This is not just my opinion, even her mother hinted that there were mental issues, and tried to pass it off as PSTD, but mommy feared her so much she sold her home and moved away to safety in another county. Various people who interact with her have finally started comparing notes. I don't know what kind of mental illness it is, nor do I know how to deal with it.

Oh, for a one-pronged problem! I'm not foolish enough to think I rate in the no-problem category of humans....

Yes, the Association is incorporated and we have Board of Directors liability insurance, to boot.

[TalkingDog]

98. Ahhhh....I did not realize the finer points of non-profit liability n/t

[ozymandius]

4. Volcker: Europe's debt crisis shows risks for U.S.

STANFORD, California (Reuters) – Europe's debt crisis shows the risks for the United States if it does not get its budget deficits under control, former Federal Reserve Chairman Paul Volcker said on Tuesday.

Volcker, a special adviser to President Barack Obama, said many well-developed economies were becoming aware of the hazards of running "unprecedented levels of public debts" as they emerge from the global recession.

But in a speech to the Stanford Institute for Economic Policy Research in California, Volcker said the United States differs from that country and other small European countries whose credit markets have come under speculative attack.

Unlike those countries, the United States benefits from well-established currency and credit markets that are considered safe havens in times of financial turmoil.

Still, Volcker said there are lessons for the United States in Europe's woes and he warned of the need to address long-term budget problems, such as the expected growth in social programs as the U.S. population ages.

http://news.yahoo.com/s/nm/20100519/bs_nm/us_volcker_europe_usa

[Demeter]

6. Today's Exerpt: Unhinged: When Concrete Reality No Longer Matters to the Market&What to Do About It

http://www.oftwominds.com/blogmay10/market-unhinged-from-reality05-10.html

Exhibit 3: The Double Whammy Scam: Profiting from Designed Failure and Placing Bets Backed by Counterfeit Value

A recent government suit alleges that Goldman Sachs colluded with a billionaire short seller, John Paulson, to defraud investors and “construct a package of mortgage linked derivatives designed to blow up” so Paulson could make a fortune.

Continuing from AP reporter, Bernard Condon’s, article in the Washington Post, (Does Goldman Case Tarnish Cassandras of the Crash? April 21, 2010):

So-called short sellers, like Paulson, profit when stocks, mortgages or other assets they bet against lose value. In other words, the game of guessing which way prices would go was allegedly rigged in this case. That sounds bad enough. But some Wall Street veterans say the real tarnish on our erstwhile housing heroes is the package itself - regardless of whether it was designed to fail.

By just linking to mortgages but not actually containing any, the Paulson package and others marketed by banks upped bets on housing to more than even the mortgages in existence, making the overall losses much bigger now that boom has turned to bust.

"Normally short sellers add rationality to a runaway marketplace," says Charles Smith, who oversees $1 billion at Fort Pitt Capital Group. "But in this case they were adding rocket fuel to the fire." The fuel here is devilishly difficult to understand. Called synthetic collateralized debt obligations (CDOs), these packages contained a series of wagers on whether thousands of homeowners would continue to pay their loans.

The key thing to grasp about them, and the part that explains how they magnified housing losses, is that they don't actually own any mortgages and so aren't limited by the number of such loans. Instead, these investments merely make "reference" to real mortgages to determine which side of the wager wins. (my emphases)

Did you catch that? This language confirms the divorce of concrete reality and the market: 1) “Linking to” mortgages but not containing any, 2) not actually owning any mortgages but being able to bet on them, 3) making “reference” to real mortgages to determine which side of the wager wins, 4) wagering bets not “limited” by material assets. The last point could theoretically involve an infinite number of bets and infinite returns on those bets.

This is well analyzed except for one point: The core of this dealing is deceptively simple, even if the instruments themselves are deliberately complex. Industry bettors simply concoct counterfeit value by leveraging their own abstract, self-assigned-value assets between themselves in a ping-pong ascending scale beyond the value of the underlying concrete assets.

The bet has both replaced and exceeded the thing it refers to. There is no “there” there. Real money is siphoned in fees from the “marks,” the pension funds who are told they are investing in highly rated, stable instruments, and then the U.S. taxpayer is asked to take up trillions of dollars of real debt in order to cover a counterfeit, undisclosed bidding/betting war.

Should I be able to make a “reference” to the Bank of England, or food, or oil, simply collect billions of real money if I bet right, and lose my never-there-to-begin-with counterfeit wealth if I don’t?

Who is the “house” in this casino in which someone can wage a series of bets on assets that actually exceed the value of the assets themselves? It’s always going to be the American taxpayer, the public, bailing out an unregulated, morally and financially reprehensible private market. Usually when someone says, “You really hate America,” it’s a disgruntled conservative with a chip on his shoulder.

Well, these profiteers actually make huge sums of money by destroying America, robbing it blind, and then sticking the American citizen with the check for any downside bets. Now let’s see why very little is currently being done to correct this.(tomorrow, faithful readers---Demeter)

[DemReadingDU]

31. There is no “there” there.

"Real money is siphoned in fees from the “marks,” the pension funds who are told they are investing in highly rated, stable instruments, and then the U.S. taxpayer is asked to take up trillions of dollars of real debt in order to cover a counterfeit, undisclosed bidding/betting war."





This is not going to end well.
:(

[Demeter]

33. But we already knew that

not when it was happening, but shortly thereafter. Anyone who doesn't know it now was either born yesterday or not paying attention.

[ozymandius]

7. Home building gain likely to fade with tax credit

WASHINGTON – Home construction rebounded last month to the highest level in 18 months as buyers capitalized on tax incentives. But now that those tax credits have expired, builders are scaling back.

That means the homebuilding industry isn't likely to contribute as much to the economic recovery. Analysts expect sales to fall this summer as the effect of the
tax credits fades.

The rate of construction of single-family homes and apartment buildings rose 5.8 percent last month to a seasonally adjusted annual rate of 672,000, the Commerce Department said Tuesday.

That's the highest level since October 2008. It was driven by a 10 percent increase in single-family home building. The rate of homebuilding remains 70 percent below the decade's peak in January 2006. Still, it's climbed more than 40 percent above the April 2009 bottom.

Adding to evidence that the pace of construction will slow was the latest reading on applications for new building permits, a gauge of future activity: Applications sank 11.5 percent in April to an annual rate of 606,000. That's the lowest point since October 2009.

http://news.yahoo.com/s/ap/20100518/ap_on_bi_go_ec_fi/us_economy

[Demeter]

55. Investors Made Millions from People Facing Eviction

http://huffpostfund.org/stories/2010/05/investors-made-millions-people-facing-eviction

A six-year conspiracy by veteran real estate investors to rig bids and stifle competition at tax sale auctions made two chief organizers at least $10 million, largely from fees homeowners paid to keep from losing their properties, according to federal prosecutors.

Though many details remain under seal in U.S. District Court in Baltimore, prosecutors allege that from 2002 through 2007 the pair acted to corrupt nearly two dozen municipal tax sales in Baltimore and five other Maryland jurisdictions, including Montgomery and Prince George’s counties in the Washington, D.C. suburbs.

Every year, local governments in Maryland sell investors the right to collect unpaid taxes and municipal fees, often for a few hundred dollars or less. Lien holders can sue to take the property of those who fail to pay them.

The tax sale conspiracy deprived local governments of revenue from higher bids even as it enriched Baltimore County lawyer Harvey M. Nusbaum and his longtime real estate investment partner Jack W. Stollof, court records show.

“This was a crime of greed,” prosecutors wrote in court papers.

Both men have pleaded guilty to felony charges of bid rigging. On May 4, U.S. District Court Judge J. Frederick Motz sentenced Nusbaum, 72, to a year and a day in federal prison as well as an $800,000 fine. Stollof is due to be sentenced Wednesday.

Prosecutors won court approval earlier this year to seal records naming most of the co-conspirators and outlining their roles, citing an ongoing criminal investigation by the Justice Department’s antitrust division in Washington.

Yet court filings provide a glimpse inside the scheme that, prosecutors allege, evolved into a “gentleman’s agreement” to split up the property liens for sale and refrain from bidding on liens assigned to other members of the conspiracy.

According to the government, Stollof and Nusbaum bought thousands of municipal liens and then used the court system to threaten homeowners with seizure of their properties unless they paid legal fees, interest and other charges. These fees often totaled 10 times the original debt.

Nusbaum, a former Internal Revenue Service agent, filed some 6,000 lawsuits over the six-year period to foreclose on the property on which the men held liens, according to the government. He generated an estimated $6 million in legal fees as a result. The men split about $1.5 million in interest charges, according to prosecutors.

The homeowners cited in the case ranged from several Baltimore residents stuck with thousands of dollars in fees after they failed to pay water bills of a few hundred dollars to the owners of a parking space at a North Bethesda condominium. In that case, a $199.57 lien on the parking space cost $3,697 to redeem, according to court records.

In court documents, one man said he owed a water bill on a property on South Warner Street in Baltimore and ended up in the tax sale as a result. He said that when he called the Nusbaum law office and demanded an explanation for $4,000 in charges he was told: “You will pay, everybody does.”

In a second case cited by prosecutors, an 80-year-old widow with a $369.86 outstanding water bill sold in the 2005 Baltimore tax sale was billed more than $5,000, according to court records.

In another case, Rosa D. Carmon wrote that she had received a call from Stollof in October 2007, telling her he had bought a $346 water bill lien on a home she owned on Nuth Avenue in Baltimore. Her cousin was renting the property at the time and had failed to pay the bill.

Stollof later told the divorced mother of four that it would take $4,256 to redeem the property, according to Carmon’s affidavit. “I shared with him that I thought this was outrageous and that I didn’t have that kind of money,” she wrote.

Stollof and Nusbaum’s role in the tax sale business first came to light in 2007, when The Baltimore Sun exposed how three investment groups had won about two-thirds of the liens auctioned off. Later that year, the FBI raided Stolloff’s and Nusbaum’s offices and that of a third man as part of the bid rigging investigation that prompted the criminal charges in 2009.

As he stood before Motz at the May 4 sentencing hearing, Nusbaum said he was “stunned” by the FBI raid because he didn’t realize his conduct in bidding for tax liens had been illegal. He called it the “worst moment of my life.”

Stollof also contends that he didn’t know he was violating any laws.

Legal papers filed by his defense team describe him as a “not highly educated man” who relied on lawyers around him for advice. Stollof, his lawyers wrote, “achieved his success through hard work, handshakes and honesty.”

Read more: http://huffpostfund.org/stories/2010/05/investors-made-millions-people-facing-eviction#ixzz0oNnDxLWq
Under Creative Commons License: Attribution No Derivatives

[Demeter]

64. Couple Commits Suicide Over Debt Foreclosure and Unemployment Blamed for Spike in Suicides

http://www.informationclearinghouse.info/article25476.htm

Facing foreclosure, police say a husband and wife were driven to kill themselves in an apparent suicide pact that took place in a northwest Houston home on Arncliffe near Antoine.

Officers found the couple's bodies in their bed Sunday night after worried neighbors reported not seeing them for more than a month.

"A couple here committed a murder suicide," said HPD Sgt. J.J. Wilson. "They left notes... and names of next of kin. It seems well planned and well thought out."

"Suicide is a permanent solution to a temporary problem," said Linda de Sosa.

She knows the pain the victim's family is going through. Her 28 year-old son, Michael, committed suicide just this past Christmas. Though she doesn't think it's the main reason, she does acknowledge he was dealing with mounting debt.

"Bad economic times put a lot of stress on different people.... it's when you start feeling the despair that there is nothing you can do," said de Sosa.

C.P.A. Alan Sandersen agrees when the economy goes down, suicides go up.

"Try to communicate with their lenders, try to work out a loan modification... if all else fails, get some legal help to buy some time," said Sandersen.

Like Sanderson, de Sosa said she only wished her son and the couple knew that there is always help available.

"The family members should reach out and suggest help," said de Sosa.

"You can come back from a foreclosure it doesn't mean it's the end of the world," said Sandersen.

[notesdev]

8. Good morning

I have a feeling today will be particularly interesting... I got my eye on Euro disintegration and all the cascading effects that will come from it.

[ozymandius]

12. Good morning.

Sure will be interesting. The gyrations in Europe will have huge reverberations across the world.

[Demeter]

13. I love this quote, which I cannot offer a citation for:

"The market can be irrational much longer than you can curl up and hold the fetal position..."

I also liked this quip from the Lehman's-led crash:

“This is worse than a divorce. I’ve lost half my net worth and I still have a wife,” said one shell-shocked share trader at the end of the worst day on the stock market for twenty years....

http://business.timesonline.co.uk/tol/business/markets/article4923227.ece

[ozymandius]

16. That is a paraphrase.

"The markets can be irrational longer than you can stay solvent." - John Maynard Keynes

[notesdev]

17. The quote is

"The market can stay irrational longer than you can stay solvent"

And the author? None other than John Maynard Keynes himself.

[Demeter]

20. This Was an Improvement Upon Keynes' Famous Phrase

which I saw sometime in the past 30 days or so...if I trip over it again, I will cite.

[Ghost Dog]

41. Agreed.

But the people of this world

Are going to rebel.

Very soon now.

[Tansy_Gold]

72. Perhaps, but I'm not gonna curl up in a fetal position. . . .

or sit in a corner suckin' my thumb waitin' for it to happen.


They should get on with it, and soon.



TG

[Ghost Dog]

74. Yeah. I should have said,

all those young people.

[Tansy_Gold]

78. LOL

:yourock:

[Festivito]

9. Debt: 05/17/2010 12,974,895,930,216.56 (UP 48,206,149,979.88) (Mon)

(Up a lot. Good day.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,466,170,133,514.44 + 4,508,725,796,702.12
UP 46,069,416,994.17 + UP 2,136,732,985.71

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 309-Million person America.
If every American, man, woman and child puts in $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,287,624 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,950.91.
A family of three owes $125,852.72. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 4,417,346,564.44.
The average for the last 30 days would be 3,239,387,480.59.
The average for the last 31 days would be 3,134,891,110.25.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 157 reports in 229 days of FY2010 averaging 6.78B$ per report, 4.65B$/day.
Above line should be okay

PROJECTION:
There are 979 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
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)
05/17/2010 12,974,895,930,216.56 BHO (UP 2,348,018,881,303.48 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +1,065,066,926,704.80 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,697,595,756,538.22 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/27/2010 +000,734,843,937.10 ------------********
04/28/2010 -000,020,446,125.69 ----
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********
05/13/2010 +003,301,759,550.17 ------------*********
05/14/2010 -000,440,383,687.55 ---
05/17/2010 +046,069,416,994.17 ------------********** Mon

111,357,677,999.82 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4386232&mesg_id=4386238

[Festivito]

93. Debt: 05/18/2010 12,984,666,665,110.57 (UP 9,770,734,894.01) (Tue)

(Up a little. Good day.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,466,530,667,286.64 + 4,518,135,997,823.93
UP 360,533,772.20 + UP 9,410,201,121.81

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 309-Million person America.
If every American, man, woman and child puts in $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,294,270 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,981.59.
A family of three owes $125,944.78. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 32 days.
The average for the last 22 reports is 4,861,470,877.80.
The average for the last 30 days would be 3,565,078,643.72.
The average for the last 32 days would be 3,342,261,228.49.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 157 reports in 230 days of FY2010 averaging 6.85B$ per report, 4.67B$/day.
Above line should be okay

PROJECTION:
There are 978 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
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)
05/18/2010 12,984,666,665,110.57 BHO (UP 2,357,789,616,197.49 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +1,074,837,661,598.80 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,705,720,636,885.05 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/27/2010 +000,734,843,937.10 ------------********
04/28/2010 -000,020,446,125.69 ----
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********
05/13/2010 +003,301,759,550.17 ------------*********
05/14/2010 -000,440,383,687.55 ---
05/18/2010 +000,360,533,772.20 ------------******** Tue

65,648,794,777.85 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4388098&mesg_id=4388113

[ozymandius]

11. Stocks Fall as Euro Hits Four-Year Low on German Ban

The MSCI Asia Pacific Index lost 1.2 percent to 115.12 at 8 a.m. in London. The Stoxx Europe 600 decreased 1.1 percent to 248.55. Standard & Poor’s 500 futures fell 0.5 percent following a 1.4 percent decline in the index yesterday. The euro was little changed against the dollar after weakening below $1.22 for the first time since April, 2006. Yields on 10-year U.S. notes slid 2 basis points to 3.33 percent while 10-year bund yields fell 7 basis points to 2.75 percent. Oil slumped to a seven-month low near $68 a barrel and copper dropped 1.9 percent.

German Chancellor Angela Merkel’s government rattled investors with the new regulations by raising concerns they won’t be able to hedge their European holdings or sell assets as the region’s debt crisis worsens. The BaFin markets regulator banned investors from naked short sales -- speculating on declines in companies they don’t own -- for 10 banks and insurers, as well as naked credit-default swaps on euro-area government bonds starting today.

The rules hurt demand for European assets. The euro, which has depreciated 15 percent against the dollar this year, weakened to as low as $1.2144 before recovering at $1.2205. The pound slumped to a 13-month low of $1.4278 and the yen gained against 15 of 16 major counterparts. The German ban will last until March 31, 2011, BaFin said yesterday in an e-mailed statement.

The MSCI Asia Pacific Index has declined 11 percent from its high for the year on April 15, entering a so-called correction, as Europe’s debt crisis and concern China will quell inflation eroded investor confidence. Almost five shares fell in the index for each that rose.

Japan’s Nikkei 225 Stock Average dropped 0.5 percent. South Korea’s Kospi Index slumped 0.8 percent and Australia’s S&P/ASX 200 Index declined 1.7 percent. Hong Kong’s Hang Seng Index retreated 1.5 percent.

http://preview.bloomberg.com/news/2010-05-19/stocks-commodities-fall-as-euro-hits-four-year-low-on-german-trading-ban.html

---

The ban on naked short sales will put pressure on the U.S. (Senate, Fed, SEC) to do the same. For this move, I am very grateful that Europe has articulated the evils of naked short sales. Short sales are useful as Ritholtz explained yesterday. But the naked short sales are equivalent to what ones does in las Vegas at the roulette wheel and have no legitimate role in the worlds of banking and finance.

[ozymandius]

14. Merkel Seeks More Curbs on `Destructive' Markets

German Chancellor Angela Merkel laid out proposals to gain control over “destructive” financial markets, as her government seeks to extend a ban on naked short- selling across Europe.

Merkel, opening a parliamentary debate on Germany’s contribution to a $1 trillion bailout to backstop the euro, said faster budget cuts, tougher penalties for countries that flout the rules and the orderly insolvency of euro-region states are among the measures Germany will put to European Union partners on May 21.

Merkel’s coalition is seeking to build momentum on market regulation amid public opposition to Germany’s share of the Greek and euro-region bailouts. Germany banned naked short- selling and speculation on European government bonds with credit-default swaps today in an effort to calm financial markets, sparking investor anxiety about increasing regulation.

Merkel said Germany will lobby governments to introduce a tax on financial markets, and for ratings companies to come under European supervision so governments regain “primacy” over markets.

http://preview.bloomberg.com/news/2010-05-19/merkel-pushes-extra-eu-rules-seeks-to-widen-short-selling-ban.html

---

This is progress. Speculators may place a bet on the roulette wheel that they do not own - but their loss should not mean that civil servants should get thrown out of a job and that tax rates on the middle class should increase. So I am glad, as said above, that one government (no less the economic goliath of Germany) gets it. A tax on markets is another way to curb cannibalistic activity. If a loophole exists, and there is a 99% chance that it will, then a tax on anything like that activity is a good way to curb destructive speculative behavior.

[Demeter]

18. Goddess Bless Angela Merkel and the Common Market

by necessity (and I hope, by the ethical promptings of her strong incorruptible will) Angela and the whole of Europe will lead us out of financial slavery, and put the self-styled "Masters of the Universe" out of business--literally.

[ozymandius]

19. (OH LOOKY!) Goldman Sachs Advice Hands Clients Losses in Most Top Trades

Goldman Sachs Group Inc. racked up trading profits for itself every day last quarter. Clients who followed the firm’s investment advice fared far worse.

Seven of the investment bank’s nine “recommended top trades for 2010” have been money losers for investors who adopted the New York-based firm’s advice, according to data compiled by Bloomberg from a Goldman Sachs research note sent yesterday. Clients who used the tips lost 14 percent buying the Polish zloty versus the Japanese yen, 9.4 percent buying Chinese stocks in Hong Kong and 9.8 percent trading the British pound against the New Zealand dollar.

Goldman Sachs makes more money from trading than any other Wall Street firm. In the first quarter, the bank’s $7.39 billion in revenue from trading fixed-income, currencies and commodities dwarfed the $5.52 billion made by its closest rival, Charlotte, North Carolina-based Bank of America Corp. In equities, Goldman Sachs’s $2.35 billion in revenue was about 50 percent higher than its nearest competitor.

Goldman Sachs executives have grappled before with questions about whether they’re better at making money for the firm than for their clients, according to an internal e-mail dated Sept. 26, 2007, that was released by a U.S. Senate subcommittee last month.

http://preview.bloomberg.com/news/2010-05-19/goldman-sachs-hands-clients-losses-as-seven-of-nine-top-trade-ideas-flop.html

[Demeter]

21. Can the Boys at Goldman REALLY Be That Dumb?

I withdraw the question.

[Dr.Phool]

27. Smart enough to bet against their own advice?

It sounds like their main mission now is investing in suckers.

[Tansy_Gold]

39. In the gambling business. . . . .

For every winner there must be a loser. . . . . .




Tansy Gold

[Po_d Mainiac]

45. In Goldman's case there are 500 million

losers to cover their gain :grr:

[Tansy_Gold]

48. Agreed. agreed.

I'll add to your :grr:

[ozymandius]

23. Goldman Seeks Bigger Share of U.S. Retirement Savings

Goldman Sachs Group Inc., fighting a fraud lawsuit from U.S. regulators who accuse the company of misleading investors, is trying to persuade more Americans to trust the firm with their retirement funds.

The New York-based company is promoting alternative asset funds and designing target-date funds that provide guaranteed income to grab a bigger piece of the $2.7 trillion 401(k) market, said Bill McDermott, a managing director at Goldman Sachs Asset Management and head of its defined-contribution business.

Goldman’s 401(k) plan assets totaled $17.5 billion as of March 31, according to the company. Fidelity Investments, the largest 401(k) asset manager, had $347.8 billion as of December 31. Assets in 401(k) plans are estimated to increase 41 percent, to $3.8 trillion, by the end of 2014, according to data from Cerulli Associates in Boston.

“When a client gives us their money and their assets to manage, we are 100 percent their fiduciary, we must manage their money in the most prudent fashion possible using our best judgment possible,” Goldman Sachs President Gary Cohn said on May 11 at an investor conference in New York. “The rest of Goldman Sachs is not in the fiduciary business.”

http://preview.bloomberg.com/news/2010-05-18/goldman-sachs-seeks-bigger-share-of-2-7-trillion-u-s-retirement-market.html

---

"Best judgement possible." I think one would understand if I do not send them a check right away.

[Po_d Mainiac]

60. Riiggghhht

"funds that provide guaranteed income" ????

You can bet the rate of inflation will far exceed that guaranteed rate of return....Leaving the squid with the excess, while you load the wheelbarrow with greenbacks to buy a loaf of bread.

What kind of fools do they take us for? meh, nevermind

[CountAllVotes]

80. glad I do not have a 401K

my retirement money is sitting in an INSURED IRA CD drawing 6.25% still at my credit union. Thank god I went long on this investment when this opportunity presented itself in 2006.

Goldman Sachs will not get a cent of my money, not a god damn cent of it!

:kick:

[Demeter]

22. Britain cornered as EU backs hedge fund crackdown

http://uk.reuters.com/article/idUKTRE64H24F20100518

European Union finance ministers backed stricter controls for hedge funds and private equity groups on Tuesday, handing a defeat to Britain's new coalition government at its first EU meeting.

The draft rules will control pay and borrowing at hedge funds as well as forcing them to disclose extensive information to watchdogs about how they are investing or short-selling, breaking a taboo for the secretive industry.

The regime, which puts hedge funds under the eye of a pan-European watchdog for the first time, is part of a wider set of pledges by world leaders to create a more stable financial system after the global economic crisis.

"We are determined to accelerate the pace of regulation," Wolfgang Schaeuble, Germany's finance minister, told reporters after the meeting.

"Up until now this was not regulated," he said of the hedge fund and private equity industry. "This hole will now be closed."

Spanish Economy Minister Elena Salgado announced an agreement, despite acknowledging some concerns were removed.

Britain had fought hard to water down the law and was still hoping to overturn a provision that refuses a single licence for foreign funds to do business across Europe, something U.S. Treasury Secretary Timothy Geithner has also objected to.

But London's objections were overruled in a rare break with an unwritten rule of Brussels diplomacy that says no country should be bullied into accepting a law it does not want.

British diplomats put a positive gloss on developments, described by hedge fund lobbyists as disappointing, saying they had reached the "best possible" outcome with a footnote to the ministers' statement that flagged their worries.

But experts see the new rules -- likely to take effect around 2012 -- as a decisive political victory given the symbolic importance of the industry for London.

Other political leaders played down any impression that Britain might have come off badly in the negotiations.

"Today, with goodwill and agreement from Britain and after very hard struggle in recent weeks, we have succeeded ... to rein in hedge funds," said Austrian Finance Minister Josef Proell.

BRITAIN ISOLATED

Britain is worried the new law will drive its financial services elite out of London's West End, home to eight out of ten European hedge funds, to cities like Geneva.

But it is isolated. Only the Czech Republic backed it in opposing the approval of the new rules by the finance ministers, a weak alliance in the face of heavyweights France and Germany, who pushed for rigid restrictions....

[Demeter]

24. From WSJ: EU Moves to Tighten Control of Hedge Funds

http://online.wsj.com/article/SB10001424052748704912004575252632251750758.html?mod=dist_smartbrief



...Tuesday's vote over objections from U.K. financial leaders and U.S. hedge-fund lobbyists means that sweeping new restrictions will be drafted to constrain U.S. and other foreign hedge-fund managers trying to raise money from European investors. The European Union also plans to limit the amount of debt, or leverage, that foreign-based funds can use to amplify their trades and profits....

The vote followed Monday's approval by a key European Parliament committee of its version of the hotly contested legislation. The two measures diverge substantially, setting up months of wrangling before anything becomes law. Still, the EU vote shows that hedge funds are attracting a level of regulatory scrutiny that they long managed to avoid.

In the U.S., financial-overhaul legislation moving through Congress is widely expected to include mandatory registration with the Securities and Exchange Commission for hedge funds if they have a certain amount of assets, probably $100 million or more.

Mandatory SEC registration has long been expected, and many hedge-fund managers already are registered because deep-pocketed investors such as pension funds demand it. But registration under a newly emboldened SEC is expected to bring fresh disclosure requirements and other uncomfortable realities managers previously have staved off.

Hedge-fund executives and lawyers cite broadening insider-trading investigations, questions about how fund managers treated investors during the financial crisis and in-depth probes into details of hedge-fund operations even during routine scheduled examinations as examples of the SEC's harder-line posture.

"There's fear of how much more authority the SEC will get in areas where it hasn't had much authority, and it's pretty much a foregone conclusion that the SEC's authority is expanding significantly," says Mitchell Nichter, a San Francisco hedge-fund lawyer. The SEC didn't comment.

Hedge funds have avoided heavy regulation partly because they cater to wealthy individuals, pension funds, university endowments and other investors that are supposed to be sophisticated enough to protect their own interests.

Assets controlled by hedge funds have roughly quadrupled over the past decade to $1.7 trillion now, and their share of trading volume on major exchanges has skyrocketed. Hedge funds often pursue trading strategies in corners of the financial markets that are lightly regulated, including bearish bets known as credit-default swaps....

[Ghost Dog]

43. Fog in the Channel,

Continent isolated.

Oh, yeah?

[Demeter]

25. Fishing Ban Is Expanded as Spill’s Impact Becomes More Evident

http://www.nytimes.com/2010/05/19/us/19spill.html?src=me

The National Oceanic and Atmospheric Administration greatly expanded the fishing ban in the Gulf of Mexico on Tuesday in response to spreading oil from the BP well blowout. The prohibited area now covers 19 percent of the gulf, nearly double what it was, according to the agency...

[ozymandius]

26. Credit Card Firms May Face State Rate Caps, Other Tightening

Credit-card firms caught off-guard by U.S. Senate passage of curbs on debit fees are facing what one executive sees as a “volcanic” eruption of legislation, including possible limits on interest rates.

States could enforce their own rate limits on cards, regardless of where the issuer is based, under a proposal by Sheldon Whitehouse, a Rhode Island Democrat. Whitehouse pushed his amendment on the Senate floor yesterday, the same day colleagues voted to let consumers get credit scores for free.

Card companies including Visa Inc. and MasterCard Inc. already are reeling from the Senate’s surprise passage last week of limits on debit-card “swipe” fees, the levy charged to merchants for each transaction. The stream of proposed rules “rivals only the Icelandic volcanic reports,” Discover Financial Services Chief Financial Officer Roy Guthrie told investors and analysts.

The American Bankers Association, the industry trade group and lobby, opposes Whitehouse’s plan to curb interest rates, saying in a statement that banks would face an “avalanche of lawsuits” as they try to comply with differing state laws. The amendment might mean less credit available for consumers and small businesses, the ABA said.

Whitehouse’s amendment wouldn’t set rate caps, leaving that to individual states under their local usury laws. The measure would cover all consumer lenders regardless of their legal form to prevent them from changing charters to escape the new rules. The law would take effect 12 months after enactment.

http://preview.bloomberg.com/news/2010-05-18/credit-cards-may-face-state-rate-caps-in-u-s-senate-s-financial-overhaul.html

[ozymandius]

28. Last post of the morning -

I applaud Senator Whitehouse's efforts to get predatory lending under control. Preservation of lending capital for small businesses needs to be addressed. There is already a pullback in all credit market sectors, as we read here almost daily, in small business credit markets. Small businesses use credit cards, revolving credit lines, legitimately as seasonal fluctuations must be addresses. Borrowing costs are among many expenses that are simply the cost of doing business.

It is a meritless argument that small businesses should be lumped together with scatterbrained consumers who will max out their credit cards over a weekend's spending binge.

Have a nice day all. I need an early start on my school day. :hi:

[Dr.Phool]

29. Have a good day.

:hi:

[Demeter]

32. IMF chief says eurozone loan could force concessions

http://www.washingtonpost.com/wp-dyn/content/article/2010/05/18/AR2010051805054.html?nav=hcmoduletmv

European nations might need to surrender some control over public spending and other policies to resolve a crisis in the 16-nation currency union that uses the euro, the managing director of the International Monetary Fund said Tuesday.

"The idea that you can build a single currency and just let everybody do what they want is wrong," said Dominique Strauss-Kahn, who called for closer coordination among the eurozone's governments at a time when the stresses in the common currency are at a peak....



YOU KNOW WHAT I THINK? I THINK THE IMF WILL GET ITS COMEUPPPANCE, JUST LIKE GOLDMAN AND LEHMAN'S AND EVERY OTHER BANKSTER. I THINK THAT THE IRON GRIP OF THE MINIONS OF GREED WILL BE BROKEN. CHANNELING KASSANDRA HERE....

[DemReadingDU]

38. The Euro was great during the boom times

Now it appears all those Euro countries revert back to their respective historical origins, only looking at their own specific country. It wouldn't surprise me if Greece eventually leaves the Euro, followed by other countries, each returning to their original currency.

[Ghost Dog]

44. I/we most of us think we're doing ok as we are.

Looking forward.

But, there are other (center.right) suggested options, eg:

http://fistfulofeuros.net/afoe/economics-and-demography/much-ado-about-some-of-the-wrong-things/

[DemReadingDU]

51. yes, indeedy

Perhaps, I may be only hearing what the media is saying. Good to have additional sources.
:)

[Demeter]

34. Walmart struggles while Home Depot thrives

The uneven recovery in US consumer spending was underlined by quarterly results from Walmart and Home Depot, which suggested that purchases by low-income Americans were still lagging the pick-up in expenditure by middle-class shoppers
Read more >>
http://link.ft.com/r/QM42II/M9ULIF/HI3M9/NSHG64/A7WM9L/PJ/t

I THINK FT IS OVERLOOKING THE KIND OF MERCHANDISE THE TWO STORES OFFER---WALMART HAS VERY LITTLE IN THE WAY OF HOME REPAIR, AND IT IS THE SEASON FOR IT, NOT TO MENTION MAINTAINING ONE'S LARGEST ASSET IS MORE IMPORTANT THAN JUST BUYING CHEAP CHINESE CONSUMABLES.

[Tansy_Gold]

79. It would be interesting to see a real breakdown of those purchases

How much Home Depot / Lowe's / Menard's / etc is bought to maintain a house that might have been sold in other economic conditions; how much is to remodel/expand existing facilities to accommodate additional residents; how much is to alter/retrofit for energy efficiency??



TG

[Demeter]

81. You Mean....Data? Hard Data?

[Tansy_Gold]

84. Silly me! What WAS I thinking???

I don't even want to let my mind wander into the idea of hard data. . . . . .




Tansy Gold, who is NOT in the gutter, she really isn't. . . . .

[Demeter]

35. SEC to pilot ‘circuit breakers’ on stocks

The Securities and Exchange Commission proposed rules to introduce “circuit breakers” for all stocks in the S&P 500 index, marking the most dramatic regulatory response yet to this month’s so-called ‘flash crash’
Read more >>
http://link.ft.com/r/QM42II/M9ULIF/HI3M9/NSHG64/OJ3RG4/PJ/t

[Ghost Dog]

46. Shouldn't similar rules apply on the way up

as well as on the way down?

[ozone_man]

52. Bubbles pop faster than they inflate.

Also, the largest one day increase was 400 points a few weeks ago.

Nevertheless, it's those intraday swings that take your breath away, down 1,000 points and up 650 all in the course of a few hours. Panic selling and panic buying. Sure it should be both ways, but it is a casino, with house rules.

[Po_d Mainiac]

49. As the can gets kicked a bit further down the lane n/t

[Demeter]

36. Ex-RBS director agrees bank sector exile

Johnny Cameron, former head of Royal Bank of Scotland’s investment banking division, has agreed never again to take a full-time position in the financial services industry as part of a settlement of an FSA investigation into his previous employer
Read more >>
http://link.ft.com/r/QM42II/M9ULIF/HI3M9/NSHG64/TPTUC5/PJ/t

IF THEY CAN BANISH ONE BANKSTER, WHY NOT BANISH THEM ALL?

[Demeter]

37. Buy-out activity hampered by financial climate

The decision by Blackstone and fellow private equity groups to abandon their offer for Fidelity National Information Services comes at a time when favourable conditions may be coming to an end
Read more >>
http://link.ft.com/r/QM42II/M9ULIF/HI3M9/NSHG64/TPTUCK/PJ/t

[DemReadingDU]

42. All Hell Breaking Loose In Thailand, Stock Exchange On Fire

5/19/10 All Hell Breaking Loose In Thailand, Stock Exchange On Fire
All hell is breaking loose in Thailand now. The army moved to clear protesters out of their main Ratchprasong encampment this morning, moving slowly inwards towards the main protest stage while encountering sporadic resistance in the outer area of the protest site. There were some limited casualties, including foreign journalists, though we'll wait for official confirmation of the exact counts. Yet even after the key Thai protest leaders surrendered themselves to police and told their followers that the protest was over, riots spontaneously broke out across Bangkok and in upcountry provinces.

There are now multiple locations in Bangkok where protesters are angry and burning tires, burning buildings, and clashing with security forces. Even upcountry, Thai television has shown mobs of protesters storming some town halls and lighting them on fire. Symbols of the Thai establishment appear to have been targeted. For example, protesters immediately tried to burn down the luxury Central World shopping mall next to their main protest stage. One Thai TV station, Channel 3, is also reportedly besieged by people.

more...
http://www.businessinsider.com/thai-protest-leaders-surrender-but-angry-riots-are-breaking-out-everywhere-2010-5

T-shirt wars in Bangkok. Series of graphic photos and graphic videos
Color-themed groups whether they be red, yellow, or 'multi-colored' shirts have roamed the Thai capital Bangkok over last few years demanding political changes. These range from the red shirts' recent demand for fresh elections, to the pro-government yellow-shirt mob's current goal of not having an election in order to protect the political party in control right now.
**WARNING** these photos and videos are graphic
http://www.businessinsider.com/understanding-the-bangkok-riots-2010-4#t-shirt-wars-in-bangkok-1

[Dr.Phool]

54. Dow opens with a big vertical line.

Guess which direction.

[Dr.Phool]

58. Now, it's a yo-yo.

[Demeter]

56. MORE DETAIL ON AN ITEM I POSTED EARLIER:

Chinese electronics tycoon becomes country's richest prisoner

http://www.guardian.co.uk/world/2010/may/18/huang-guangyu-gome-jailed

Even by the standards of China, Huang Guangyu's rise was meteoric. He left school and his impoverished home at 16. By 36 he was a billionaire, the founder of a retailing giant and the wealthiest man in the country.

But the entrepreneur's fall proved just as abrupt. At 41, he is beginning a 14-year prison sentence following his conviction for bribery, insider trading and illegal foreign exchange dealings.

His fortune was valued at between $2.7bn (£1.83bn) and $6bn. But in November 2008, shortly after he topped the Hurun rich list, he was detained and accused of manipulating stock prices. Today the state news agency Xinhua reported that a court in Beijing had jailed him, fined him 600m yuan (£60m) and confiscated property worth 200m yuan. His wife, Du Juan, was fined 200m yuan and sentenced to three and a half years for insider trading, Xinhua said.

Huang, also known as Wong Kwong Yu, was born into poverty in Chaoshan, southern China. He dropped out of school in 1985 and went into business with his elder brother with 4,000 yuan borrowed from friends and family.

Like many entrepreneurs at the time, they realised that cheap products from fast-developing southern China could be sold for considerably more in the north. It was not always smooth going. Huang once recalled trying to trade fabric, only to discover than no one liked the patterns he had chosen.

"The material and the issue of seasons made my head ache. I could not work it out. But electrical appliances are used by everyone, so there is not a big risk," he said.One story, possibly apocryphal, involves them stacking empty boxes on their stall because they could not afford stock. If a customer wanted a product, they would rush off to buy it from another vendor.

Huang proved equally canny when he founded the Gome chain of home appliance retailers. "Prior to Huang and Gome, the idea of retail in China was to get your customer into the shop and sell them something as expensive as possible," said Rupert Hoogewerf, whose Hurun rich list put Huang in the top spot in 2005, 2006 and 2008. "He turned that idea on its head and basically said: if you come to Gome, we will give you the best possible prices."

Huang also invested in advertising and launched aggressive takeover bids so the chain could keep expanding.

China's rapid urbanisation fuelled the boom. But doing business also required good connections."The nature of retail in the early days was such that each region probably had a dominant state-owned retail competitor. When you are dealing with these sorts of competitors, it wouldn't surprise me at all if you ended up getting into bed with some rather unpleasant characters," Hoogewerf said.

Five senior police and tax officials were detained or questioned in relation to the investigation into Huang, state media have reported. But while leaders have stressed the need to tackle widespread corruption, observers say prosecutions reflect personal connections as much as the seriousness of alleged crimes.

" shocked a lot of the entrepreneurial class - the fact he was taken down, but also the fact he allowed himself to be. It's one thing to be ambitious and have a good business but another not to have put in place protective measures - cultivating government relations that would be able to avoid things getting to the courts. He has to have done something pretty bad or upset someone pretty important," said Hoogewerf.

...............................................................

What prompted the investigation is unclear, but some believe that attempts to cultivate friends in high places made him a target. "If you cosy up to a particular politician, by default that politician's enemies will be yours," Hoogewerf said.

"Huang's case is not unique; it gained more attention because he was the richest person in China," said Liu Shanying, an analyst at the Institute of Political Science in the Chinese Academy of Social Sciences. "If you want to do business, it is hard for you to make it big without a good relationship with government. Of course, is not a bad thing....but during the process of building up a good relationship, it is easy for the owner of the power and the owner of the business to exchange interests privately."

Liu added that people had been expecting more senior officials to be named in connection with the case.Even if Huang serves his full sentence he will be only 55 when he is released. And while he resigned as chairman of Gome following his detention, he still holds a third of its shares. And last week three executives from Bain Capital – an American private equity firm that invested in the company last summer - were ousted from the board by shareholders affiliated with Huang. The executives were subsequently reinstalled. But it looks as if the tycoon's remarkable story may contain a few more chapters.

TOO BAD WE DON'T HAVE FACTIONALISM IN OUR GOVERNMENT ANY MORE--OBAMA CODDLES THE SAME "ENTREPRENEURS" AS W DID.

[Ghost Dog]

59. I thought about posting this exemplary example yesterday,

>But then, I thought I could rely on you guys to pick it up and run with it.

[Demeter]

62. Spanish debt auction comes close to failure

http://www.ft.com/cms/s/0/7cc4dcd4-629c-11df-b1d1-00144feab49a.html

Spain came close to its first debt auction failure on Tuesday, highlighting the funding problems for weaker eurozone economies.

The government’s difficulties in selling €6.44bn ($7.96bn) in one-year and 18-month bills sparked worries over its 10-year debt auction on Thursday.
Madrid had planned to issue €8bn, but only just attracted that amount of bids, with yields at record highs. This prompted debt managers to reduce the size of the sale by €1.56bn. Normally a government bill auction would be covered at least 1.5 times.

The ECB has so far bought €16.5bn in government bonds, mainly short-dated Greek, Portuguese and Spanish debt. Some analysts say the central bank may have to buy up to €600bn to maintain stability in the markets....Many think the central bank will have to introduce full-blown quantitative easing, which involves expanding the money supply as planned sterilisation measures could prove difficult if it has to buy large amounts of bonds. Sterilisation involves selling other assets or draining cash from the eurozone system to pay for bond purchases.

Analysts say the ECB is also, in effect, “qualitative easing” as it is taking poor quality assets, which in the case of Greece are rated junk, onto its balance sheet.

One economist said: “The ECB is purchasing the government debt of sovereigns whose solvency is in question. Neither the Bank of England nor the US Federal Reserve did that.”

.

[Demeter]

63. DIVE! DIVE! DIVE!

133+POINTS IN AN HOUR.

http://www.wikio.com/video/fasten-your-seatbelts-3198822

[Demeter]

73. -142 points at noon

[Demeter]

65. Did Vladimir Lenin Predict The Banking Disaster Of 2008?

http://www.informationclearinghouse.info/article20946.htm

http://www.youtube.com/watch?v=2Lfxjy9-1-g

[Demeter]

66. The Point of Maximum Danger By Mike Whitney

http://www.informationclearinghouse.info/article25473.htm

Debt woes in Greece have sent bond yields soaring and increased the prospect of sovereign default. A restructuring of Greek debt will deal a blow to lenders in Germany and France that are insufficiently capitalized to manage the losses. Finance ministers, EU heads-of-state and the European Central Bank (ECB) have responded forcefully to try to avert another banking meltdown that could plunge the world back into recession. They have created a nearly-$1 trillion European Stabilization Fund (ESF) to calm markets and ward-off speculators. But the contagion has already spread beyond Greece to Spain, Portugal and Italy where leaders have started to aggressively cut public spending and initiate austerity programs. Belt-tightening in the Eurozone will decrease aggregate demand and threaten the fragile recovery. We are at a critical inflection point.

From American Banker:

"Bank stocks plunged last week under the theory that banking companies will take large losses in Europe. The theory is correct. Banks will get hurt," Richard Bove of Rochdale Securities LLC wrote in a research note.
Bove wrote in a separate report last week that "big American banks have a bigger stake in this drama than thought." He estimates that JPMorgan Chase has $1.4 trillion of exposure across all of Europe alone, while Citigroup Inc. has $468.4 billion.

Analysts said large U.S. banks have opaque ties to the region through their overseas counterparts. U.S. money-center banks trade derivatives, orchestrate currency swaps and handle other transactions with large European banks. U.S. banks may not hold a lot sovereign debt in Europe, but those European institutions do. If Greece defaults, that could create a crisis of confidence in the European banking market that would spread to large U.S. banks.

"Obviously, the European banks have exposure to Greece. The U.S. banks have loans out to those banks," said Keith Davis an analyst with Farr Miller & Washington. "There are a number of different ways they can have exposure — it's not hard to imagine how a wildfire can spread." (Europe's debt Crisis, US Banks Exposure", Paul Davis and Matt Monks, American Banker)

China and the United States have begun to hunker down and pursue deflationary policies. China has already been blindsided by a steep 14.5% rise in the renminbi over the euro in the past 4 months which is beginning to hurt exports. But China's leaders are also trying to unwind a real estate bubble that was created by loose monetary policies and the massive $600 billion fiscal stimulus package. Rather than drain liquidity by raising interest rates, (which would strengthen the renminbi) China is tightening lending standards to put more pressure on speculators. It's a circular strategy to deal with a serious problem. This is from The People's Daily online:

"On April 16, the State Council rolled out a series of measures to curb the domestic housing market amid concerns over asset bubbles. These measures include a 30 percent down payment for first time buyers for houses larger than 90 square meters, 50 percent down payment and lifting mortgage interest rate for second home buyers. The government has also imposed a temporary ban on mortgage applications for third or above home buys and cross-city purchases. Shanghai will be the third region after Beijing and Shenzhen to have rules governing property buys, said Sun." the people's daily online, Shanghai property curbs soon.

By tapping on the brakes, China will likely limit the fallout from the burst credit bubble, but will also slow investment which is the main driver of growth. That leaves the experts divided about what the future holds in store; many now believe that China is headed for a "hard landing". Here's an excerpt from hedge fund manager Hugh Hendry with a particularly grim forecast:

"The composition of China's growth has undergone a potentially treacherous change: in the absence of expanding foreign demand for its exports, it has instead come to rely on a massive surge in domestic bank lending to fuel its growth rate. Indeed, when measured relative to the size of its economy, the 27pc point jump in bank loans to GDP is unprecedented; at no point in history has a nation ever attempted such an incredible increase in state-directed bank lending.

“What a turnaround: from an export juggernaut to a credit addict. Who would have thought it necessary back in 2001, the year everything all started to work out for China?....China has become the world's biggest creditor, after amassing nearly $2.3 trillion of foreign exchange claims on us. However, the specter of a creditor nation running persistent trade surpluses has ominous historical portents. It has happened only twice before, with the US economy in the Twenties and with the Japanese economy in the Eighties.” ("China: Hugh Hendry warns investors' infatuation is misguided" UK Telegraph)

China's economy is reeling from over-investment, under-consumption, and razor-thin profit margins. A slowdown in China will only deepen the downturn in the EU by reducing the amount of liquidity in the system. This will lead to tighter credit and falling demand. Deflationary pressures continue to mount.

Developments in China and Europe come at a bad time for the United States, where recovery is so weak that the Federal Reserve hasn't raised rates from zero in more than 14 months or sold any of the assets in its $1.7 trillion stockpile of "toxic" inventory. If there was even a flicker of light at the end of the tunnel, the Fed would have raised rates by now. As it stands, Fed chair Ben Bernanke has refused to sell any of the mortgage-backed securities (MBS) he purchased from underwater banks. He's worried that even a small auction--of say $20 or $30 billion--would divert liquidity from the markets and send stocks into a nosedive. Bernanke's timidity underscores the severity of the slump. He's not taking any chances.

The recent uptick in Personal Consumption Expenditures was the result of government transfers, otherwise PCE remained flat. Obama's $787B fiscal stimulus has not restored consumer spending to pre-crisis levels or created the foundation for a self-sustaining recovery. By the end of the third quarter, the stimulus will diminish (excluding another asset bubble) and the contraction will resume. The stock market bubble--largely engineered by Bernanke's monetization program (QE) and liquidity injections--has not decreased unemployment, increased economic activity, or halted encroaching deflation. Here's an excerpt from Gluskin Shef's chief economist David Rosenberg who gives a good summary of the economy:

"There are classic signs indeed that the recession in the U.S. ended last summer ... But the depression is ongoing...Real organic personal income is nearly $500 billion lower now than it was at the peak 16 months ago and this has never occurred before coming out of any technical recession....

Outside of the lagged impact of all the government stimulus and the impact of inventory accumulation, the economy is not growing.....if you take the government data at face value, the past four quarters have averaged a mere 1.38% in terms of real final sales, which goes down as one of the very weakest post-recession trajectories in recorded history....the government has done everything it can to perpetuate a consumer spending cycle even though such expenditures command a record of over 70% of GDP.....Moreover, once the foreclosure moratoria is over, and the government no longer tries to play around with market forces and allow for price discovery, home values are back on a downward track, now evident in all the data series. There is... an excess of five million vacant housing units across the U.S. acting as a continued dead-weight drag on house prices....

The National Federation of Independent Business small business survey is showing that economic growth is stagnant at best." ("Why the depression is ongoing", David Rosenberg, Gluskin Sheff & Associates)

Nearly-$800 billion in fiscal stimulus has barely pushed the economy into positive territory. Apart from inventory restocking, GDP measured a mere 1.38% (as Rosenberg notes) "one of the very weakest post-recession trajectories in recorded history." In the US, consumers face an uphill slog; meager employment opportunities, mushrooming personal debts, flat wage growth, and dwindling access to credit. Consumers are too strapped to pull the economy out of the muck and Wall Street knows it. That's why Bernanke has defended high-risk debt-instruments and securitization so ferociously, because they represent the only means of maintaining profitability in a stagnant economy. The battle over derivatives is the battle for the future of capitalism itself.

No one has written more brilliantly or persuasively about the stagnation that grips mature capitalist economies that UCLA historian Robert Brenner. In the introduction to his 2006 book, "The Economics of Global Turbulence", Brenner explains the structural flaw inherent to capitalism which inevitably leads to crisis. Here's an excerpt (although the piece should be read in its entirety):

"The fundamental source of today's crisis is the steadily declining vitality of the advanced capitalist economies over three decades, business-cycle by business-cycle, right into the present. The long-term weakening of capital accumulation and of aggregate demand has been rooted in a profound system-wide decline and failure to recover the rate of return on capital, resulting largely--though not only--from a persistent tendency to overcapacity, i.e. oversupply, in global manufacturing industries. From the start of the long downturn in 1973, economic authorities staved off the kind of crises that had historically plagued the capitalist system by resort to ever greater borrowing, public and private, subsidizing demand. But they secured a modicum of stability only at the cost of deepening stagnation, as the ever greater buildup of debt and the failure to disperse over-capacity left the economy ever less responsive to stimulus...."

To deal with pervasive stagnation, Brenner says that the Fed embarked on a plan that would use "corporations and households, rather than the government, would henceforth propel the economy forward through titanic bouts of borrowing and deficit spending, made possible by historic increases in their on-paper wealth. themselves enabled by record run-ups in asset prices, the latter animated by low costs of borrowing. Private deficits, corporate and household, would thus replace public ones. The key to the whole process would be an unceasing supply of cheap credit to fuel the asset markets, ultimately insured by the Federal Reserve." ("What's Good for Goldman Sachs is Good for America: The Origins of the Current Crisis", Robert Brenner, Center for Social theory and comparative History, UCLA, 2009)

The present crisis is not accidental. The system is performing as it was designed to perform. The low interest rates, lax lending standards, leverage-maximizing derivatives, even blatant securities fraud have all been implemented to overcome the basic structural flaw in capitalism --it's long-term tendency to stagnation. Naturally, this lethal policy-cocktail has generated greater systemic instability and increased the likelihood of another meltdown.

GREAT DEPRESSION PART TWO?

There are many similarities between today's crisis and events that took place during the Great Depression. As journalist Megan McArdle points out, the Great Depression also had "two parts"; the stock market crash of 1929 followed a year and a half later by the deeper dip in 1932. Phase 2 of the Depression began in Europe. Here's an excerpt from the article:

"The Great Depression was composed of two separate panics....the economic conditions created by the first panic were eating away at the foundations of financial institutions and governments, notably the failure of Creditanstalt in Austria. The Austrian government, mired in its own problems, couldn't forestall bankruptcy (and) the contagion had already spread. To Germany. Which was one of the reasons that the Nazis came to power. It's also, ultimately, one of the reasons that we had our second banking crisis , which pushed America to the bottom of the Great Depression, and brought FDR to power here." ("Why Should You Be Freaked Out About Greece? Remember, The Great Depression Had Two Parts", Megan McArdle, businessinsider.com)

With the implementation of austerity programs throughout Club Med (Greece, Portugal, Spain, and Italy) German surpluses will shrivel and the EU's GDP will shrink. Efforts to cool China's economy will have equally damaging effects on global growth by choking off liquidity and slowing overall investment. The constraints on spending will adversely impact fiscal stimulus in the U.S. and accelerate the rate of deterioration. The political climate has changed in the U.S. and there's no longer sufficient public support for a second round of stimulus. Without another boost of stimulus, the economy will lapse back into recession sometime by the end of 2010.

[Juneboarder]

76. Strikingly Blatant

No need to paint a pretty picture when things appear so grim. Thank you for sharing this information.

[Demeter]

67. US bankruptcies resume upward path in 1st quarter

http://www.reuters.com/article/idUSN1418760920100514

Consumer filings up 18 pct, business filings up 2 pct

U.S. bankruptcy filings resumed their upward climb in the first quarter, nearly equaling their highest level since 2005, as high unemployment and a still-strained housing market squeezed consumers.

There were 388,148 filings between January and September, up 17 percent from 330,394 a year earlier, according to data released Friday by the Administrative Office of the U.S. Courts. Consumer filings rose 18 percent to 373,541, while business filings edged up 2 percent to 14,607.

Filings also rose 4 percent from last year's fourth quarter, the government data show. That had been the first period with a quarter-to-quarter drop in filings since 2006.

For the 12 months ended March 31, there were 1.53 million filings, up 27 percent from a year earlier and the most since 2006. Some experts expect the number to stay above 1.5 million in future periods....

[Demeter]

68. Weekend Follow Up: Midwest Bank Seized By FDIC

http://chicagoist.com/2010/05/15/midwest_bank_closed_by_the_fdic.php

Banks are still facing tough draws, as another bank in Illinois closed just before the weekend. Despite receiving $85 million from a federally-distributed Troubled Asset Relief program, Midwest Bank was seized Friday after failing to raise enough capital to remain an independent bank. Midwest Bank, based in Elmwood Park, was supposed to raise between $125 million to $250 million by the May 13th deadline. The failure of Midwest Bank to raise this capital will cost the Federal Deposit Insurance Corp. around $216.4 million, and the assets and holdings of Midwest Bank will be taken over by FirstMerit of Ohio.

FirstMerit is greatly familiar with the banking scene in Chicago. In addition to the purchase of Midwest Bank, FirstMerit has taken over two other banks in Chicago. Earlier this year, FirstMerit purchased 24 branches of First Bank in Chicago and also bought the Geroge Washington Savings Bank. In all, FirstMerit has a Chicago-area deposit market share of 1.46 percent, which ranks 13th in the state. The failure of Midwest Bank is the 11th closure in Illinois this year, and 21 banks closed last year.

[Demeter]

69. Mervyn King: "World's Worst Financial Crisis Ever"

http://www.washingtonsblog.com/2010/05/mervyn-king-worlds-worst-financial.html

Bank of England Governor Mervyn King says:

We are still halfway through the world's worst financial crisis ever.

He is in good company.

The following experts have said that the economic crisis could be worse than the Great Depression:

* Fed Chairman Ben Bernanke

* Former Fed chairman Alan Greenspan (and see this)

* Former Fed Chairman Paul Volcker

* Economics scholar and former Federal Reserve Governor Frederic Mishkin

* Economics professors Barry Eichengreen and and Kevin H. O'Rourke (updated here)

* Nobel prize winning economist Joseph Stiglitz

* Investment advisor, risk expert and "Black Swan" author Nassim Nicholas Taleb

* Well-known PhD economist Marc Faber

* Former Goldman Sachs chairman John Whitehead

* Morgan Stanley’s UK equity strategist Graham Secker

* Former chief credit officer at Fannie Mae Edward J. Pinto

* Billionaire investor George Soros


DEMETER-SELECTED comments:

Anonymous said...

The only people who aren't saying this could be worse than the Great Depression are those people who are politically motivated to whistle past the graveyard.
May 14, 2010 3:13 PM

Anonymous said...

If all the liars say that this is the worst financial crisis ever, I'm inclined to wonder if maybe the whole thing is just contrived.
May 14, 2010 4:27 PM
Anonymous said...

Dunno, but if you took the power interest away from the transnational banks by nationalizing, this whole scourge would disappear like so many cockroaches fleeing a sinking ship.
May 14, 2010 7:43 PM
Anonymous said...

When peaceful revolution becomes impossible, violent revolution becomes inevitable.
May 14, 2010 8:42 PM
Anonymous said...

Doesn't calling those men "Experts" break the posting rules?
May 14, 2010 10:48 PM
Anonymous said...

Anonymous 7:43 PM,

"Dunno, but if you took the power interest away from the transnational banks by nationalizing, this whole scourge would disappear like so many cockroaches fleeing a sinking ship."

Ah, yes, nationalization. Is and always was the most appropriate solution. But then also a kind of parallel cleansing - perhaps incarceration, interrogation and public trial - for the political bacteria that made the nationalization necessary. You wouldn't want the Pelosis and the Bohners to get a free pass, now would you?

Andrei Vyshinsky

[Demeter]

70. The May 6 Stock Crash Revisited "21 Years on Wall Street, I Never Saw Anything So Suspicious"

The May 6 Stock Crash Revisited

"Over My 21 Years on Wall Street, I Never Saw Anything Remotely So Suspicious"

By PAM MARTENS

May 15, 2010 "Counterpunch" May 12, 2010 - -Procter & Gamble may have to put the second half of its name in bold in the future or maybe add an exclamation point. Cowboy capitalism threw a lasso around the staid 173 year old household products company on black Thursday, shaving some $62 billion off its market cap at the low point in trading.

Procter & Gamble started its day on May 6, 2010 talking about babies’ bottoms. It went downhill from there. Jodi Allen, Vice President for Procter & Gamble’s Pampers line of baby diapers issued a press release stating: "For a number of weeks, Pampers has been a subject of growing but completely false rumors fueled by social media that its new Dry Max diaper causes rashes and other skin irritations.”

It’s highly doubtful that this statement could have set off a precipitous plunge in its stock price. The company has been around since 1837. It owns some of the most well known brands in the world: Gillette, Ivory soap, Crest toothpaste, Camay, CoverGirl, Max Factor, Pantene, Oral-B, Scope, Pepto Bismol, Cascade, Vicks, Charmin and dozens of other top brands.

What Procter & Gamble is also, however, is one of the 30 stocks that make up the Dow Jones Industrial Average, the index most frequently quoted as a measure of the stock market. Someone wanting to knock out a strut holding up the stock market structure might see entering a large sell order on Procter & Gamble as one of a number of pivotal steps. Here’s why.

Procter & Gamble is in a lot of hands. Because of its historic strong performance and stability, it’s owned by a lot of conservative mutual funds. It would be beneficial to someone wanting to conduct a bear raid on the market on May 6 to knock out all those trailing stop loss orders on Procter & Gamble and pick up a tidy quick profit. (A stop loss order is when one wishes to place a limit on how far down one wants a stock price to go before it is automatically sold. That order stays in place for weeks or months or even years until the stock reaches that price and then is executed on the next tick. Unfortunately, on May 6, the next tick could have been many points below the last tick.) Stop loss orders also serve to slow down plunging stock prices because they cause trades to be printed at each of these various price levels, offering a chance for new buyers to come in at these prices. Once these are knocked off, there’s a big air pocket in a plunging market.

According to reports of time and sales, around 2:45 p.m. when the massive market disruption got underway, Procter & Gamble traded at $59.66. It had opened the day at $61.91. About a minute later, it was trading at $57.36, then $53.51, then it hit a liquidity air pocket and plunged to print a trade at $39.37. This created panic in the market. If one of the most conservative stocks can hit a 36 percent downdraft, some traders thought a major news event was happening outside. Liquidity hit a wall. In an eight minute span, the Dow lost $700 billion and saw a cumulative decline of 998.5 points or 9.2 percent before turning on a dime and moving in the opposite direction. It closed the day down 3.2 percent.

Aggravating the liquidity crunch on May 6 was the fact that the New York Stock Exchange, where Procter & Gamble is listed, paused trading momentarily to let humans on the floor of the exchange attempt to find buying support. That pause sent trades off to the world of electronic exchanges which now make up the bulk of all trading in the U.S. The New York Stock Exchange has only a 25 percent market share in its own listed stocks. The cowboys of capitalism command the rest.

To underscore how dramatic and unprecedented the trading in Procter & Gamble was on May 6, I reflected back to the day I sat behind a Wall Street terminal and watched the market lose 22.6 percent in one day. That day was October 19, 1987. That was more than twice the percentage drop at the worst market point on May 6. And yet, Procter & Gamble lost only 28 percent at its worst point in 1987 versus 36 percent on May 6 when the overall market was down less than 10 percent.

When a bear raid knocks out these stop loss speed bumps on Dow components like Procter & Gamble and 3M (it lost 21 percent at its worst point), the New York Stock Exchange pauses trading momentarily and trades are left to the feckless electronic exchanges, proprietary trading desks of the bailout boys (big Wall Street firms) and high frequency traders. This is like hitting an air pocket at 30,000 feet, then opening the cockpit door to find out no one is inside and the plane is on autopilot as the plane goes into a nose dive.

But sell orders in individual Dow component stocks were not the only problem on May 6. There was extensive selling in the Standard and Poor’s 500 futures contract known as the E-Mini. Futures can be purchased on much greater margin giving bear raiders a bigger bang for their buck. According to testimony from Gary Gensler, Chairman of the Commodity Futures Trading Commission before the House Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises yesterday, one trader “entered the market at around 2:32 and finished trading by around 2:51. The trader had a short futures position that represented on average nine percent of the volume traded during that period. The trader sold on the way down and continued to do so even as the price level recovered. This trader and others have executed hedging strategies of similar size previously.” That last sentence may be ignoring the reality that this was no ordinary day: the gauge of fear in the market, the VIX, had spiked over the past two days; there was intense fear of Greece defaulting on its debt and stresses in the credit markets were being reflected in rising yields on junk bonds.

Cumulatively, mom and pop investors lost many millions of dollars on their stop loss orders from this free fall on May 6. Only those trades occurring between 2:40 and 3 pm that were 60 percent or more away from the market are being cancelled. That means the losses in Procter & Gamble and dozens of other stocks are real losses for those who got stopped out and real profits for those on the other side of the trade.

Over my 21 years on Wall Street, I never saw anything as remotely so suspicious as the trading activity on May 6 or as nonresponsive as the SEC’s investigation to date.

Pam Martens worked on Wall Street for 21 years; she has no security position, long or short, in any financial company. She and family members own less than 500 shares in Procter & Gamble. She writes on public interest issues from New Hampshire. She can be reached at [e-mail]

http://www.informationclearinghouse.info/article25454.htm

[Ghost Dog]

71. Here's a reminder ("Love Letter");

http://www.youtube.com/watch?v=FxJdEqaCcGc

[DemReadingDU]

75. Suddenly, Everyone's In the CRASH Camp, Not Just The Bear Camp

5/18/10 Suddenly, Everyone's In the CRASH Camp, Not Just The Bear Camp
Here a Swan, there a Swan, everywhere a Black Swan...
by Joshua Brown

Newsletter writers, hedge fund managers
, journalists, bloggers, technicians, fundamental analysts, economists and strategists are joining the crash camp left and right. Not the bear camp...the crash camp.

I've been running around Manhattan all day taking care of business, meeting clients etc. After scanning today's articles and blog posts, I can honestly say that I've never heard more chatter about an imminent market crash, all at once, in my life. It's like the May 6th Flash Crash got everyone in the mood to talk cataclysm all of a sudden.

I'm not one of those guys who takes everything as a contrarian signal. I abhor knee-jerk contrarianism. Samuel Lord once said "Do not choose to be wrong for the sake of being different," and I think that's kind of apropos here.

As avowed contrarian Dougie Kass likes to remind us, the crowd usually outsmarts the remnant when herd mentality takes over. So what is the herd hearing/ seeing?

* First of all, the macro guys are disturbed by the Euro Zone's crisis and its ripple effect/ contagion risk. This isn't new but it is more pervasive. And the possibility of a China collapse scares the hell out of almost everyone.

* The technicians and Dow Theorists are grossed out and have dusted off all the 1937 charts again. Specifically, they are looking at the highly distinct pattern of a big drop (May 6th) followed by a failed rally (euro bailout day's 4% gap open) followed by another fast sell-off. Richard Russell's latest missive, in which he tells us that we won't recognize America by year's end, will make you want to kill yourself.

* Equity analysts are all pointing to year-over-year comps which will start getting harder now. They may feel OK about the "E" but they're shaky about the "P" - will the tax hikes and regulatory headwinds we now face really allow for a high-teens multiple on whatever the earnings turn out to be?

* Bond guys are freaking out about sovereign stuff, obviously. We've transferred corporate risks onto government balance sheets with bailouts, the Piper still awaits his payment in many cases.

* Eddie Elfenbein posted the results of a CNBC poll yesterday in which 40% of respondents predicted a 50% haircut for the Dow. Seriously, almost half the respondents predicted Dow 5000 by the end of this year.

* The hedgies are vocally bearish again as well. Seth Klarman's got some cautious commentary out today and Jeremy Grantham's "sell everything" stuff is being quoted everywhere. Raoul Pal put out a newsletter this week with a 2 day-to-2 week crash prediction.

We're not talking garden variety bearishness here. We're talking about ubiquitous crash predictions. My comment is that I've never seen so much certainty in so many places of a coming crash. Will it be self-fulfilling or are we talking major contrarian signal?

Worth noting no matter what.

http://www.businessinsider.com/suddenly-everyones-in-the-crash-camp-not-just-the-bear-camp-2010-5#ixzz0oNcB1eMi

[DemReadingDU]

77. The Die Has Been Cast

5/18/10 Matterhorn Asset Management: The Die Has Been Cast

Yes this is it! We have crossed the Rubicon and events in the world economy are now likely to unfold in a totally uncontrollable fashion. Clueless governments still don’t understand that it is their ruinous actions that have created a credit infested and bankrupt world. They will continue to prescribe the same remedy that caused the problem in the first place, namely more credit and more printed money. The consequences are clear; we will have hyperinflation, economic and human misery as well as social unrest. When will the world finally begin to understand that we have reached the point of no return and that “the voyage of their life is bound in shallows and in miseries” (Shakespeare, Julius Caesar). Sadly, we are probably not very far from that point. It is already starting to happen in many countries. Never in history has the world been in a situation when virtually all industrialised countries are bankrupt. Therefore there is no precedent for what will happen in the next few years. What we can be quite certain about is that events will happen in a seemingly random pattern and that it will be impossible to forecast where the next crises will start. - Egon von Greyerz, Matterhorn Asset Management

lots more, charts and graphs too
http://www.zerohedge.com/article/matterhorn-asset-management-die-has-been-cast

[Demeter]

82. One Man's Bankruptcy Is Another Man's Freedom and Comfortable Retirement

If you are getting what you need, instead of what you want, then you are doing okay.

[Dr.Phool]

83. Haven't you heard?

The economy is strong, and getting stronger.

Thank gawd it passed!

We are in recovery.

If you just believe hard enough.

[Tansy_Gold]

85. Hmmm, you been hittin' the vodka early today, eh, Doc?

Do tar balls dissolve in vodka? Or is that a sacrilegious waste of alcohol?

Anyway, I'm thinkin' about ya, my friend. :hug:


Tansy Gold, needing some fresh pictures of that puppy. . . . .

[Dr.Phool]

87. No alcohol yet today.

After kayaking for a couple of hours yesterday evening, and a trip to the gym this morning, it may be painkillers and the couch, instead.

[ozymandius]

94. Bazooka Joe sez it in my horoscope, too.

:crazy: I think I'll just be sending my money to them Golden :puke: Sacks fellas. They really want my bidness. :woohoo: Thank gawd it passed! :sarcasm:

[Demeter]

96. I Think Ozy Has Been in the Schnapps

I've never seen him so...giddy.

[TalkingDog]

89. Richard Russell commentary on Business Insider

And yeah, it's beyond depressing. To tell how bad he thinks it is...he almost doesn't tell you to buy gold. Lots of gold.

http://www.businessinsider.com/dow-theorist-richard-russell-sell-everything-liquid-you-wont-recognize-america-by-the-end-of-the-year-2010-5


Clearly something is wrong. But what could it be? Much as I love
Barron's, I trust the stock market more. If I read the stock market
correctly, it's telling me that there is a surprise ahead. And that
surprise will be a reversal to the downside for the economy, plus a
collection of other troubles ahead.

About Dow Theory -- First, we saw the recent April highs in the
Averages. Then we saw a plunge in both Averages to their May 7 lows --
Industrials to 10380.43, Transports to 4298.12, next a short rally. If
ahead, the two Averages turn down and violate their May 7 lows, that
would be the clincher. Such action would signal the certain resumption
of the primary bear market.

Just as for years I asked, cajoled, insisted, threatened, demanded,
that my subscribers buy gold, I am now insisting, demanding, begging
my subscribers to get OUT of stocks (including C and BYD, but not
including golds) and get into cash or gold (bullion if possible). If
the two Averages violate their May 7 lows, I see a major crash as the
outcome. Pul - leeze, get out of stocks now, and I don't give a damn
whether you have paper losses or paper profits!

[Dr.Phool]

92. Only 65 points from that 10380 Dow right now. After todays close.

About 120 points from the 4298 Transport.

[RUMMYisFROSTED]

86. *Gurgle*

[bread_and_roses]

90. glancing at the Market #s though the day lately had been like watching Sisyphus

push that boulder up the mountain -and sounds like those commentators think it's as futile.
edit: sp

[TheWatcher]

91. Despite the Criminals attempts at another Mid-Day Miracle the close was pretty telling to me.

This "Market" is in deep, deep trouble.

Nearly all the "gains" from the "Greece Hopes" are gone.

1 Trillion dollars in Bankster fraud seems to only buy one week these days.

the Fraudsters had better get their act together or things are going to get ugly.

And soon.

it really doesn't matter for the rest of us though.

Things are ALREADY ugly for those of us in the real word.

Well, except for those Rose Colored, Unaffected, Hope Junkies that still believe there is an actual "Recovery."