STOCK MARKET WATCH, Monday November 10

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday November 10, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 71
WHERE'S OSAMA BIN-LADEN? 2573 DAYS
DAYS SINCE ENRON COLLAPSE = 2864
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54

---

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

---

AT THE CLOSING BELL WHEN BUSH TOOK OFFICE on January 22, 2001
Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90
Oil - $27.69/bbl
Gold - $266.70/oz.
$1 USD = EUR 1.06678
$1 USD = JPY 116.6200

In recognition of those prescient of the Dow's precipitous return of Bush values (9/29/08): JuneBourder and AnneD

AT THE CLOSING BELL ON November 7, 2008

Dow... 8,943.81 +248.02 (+2.77%)
Nasdaq... 1,647.40 +38.70 (+2.41%)
S&P 500... 930.66 +25.78 (+2.85%)
Gold future... 734.20 +2.00 (+0.27%)
30-Year Bond 4.26% +0.06 (+1.45%)
10-Yr Bond... 3.78% +0.07 (+1.97%)






GOLD,EURO, YEN, Loonie and Silver

---

PIEHOLE ALERT

Heads Up!
Preliminary info on appearances by Bush & Co. throughout the country. Details & links are added as they become available so check back. And if you know more, are organizing something, or would like to, contact [e-mail]

For information on protests and other actions Citizens For Legitimate Government

---

Read more: du

[ozymandius]

1. Market WrapUp

The Bigger Picture?
BY BRIAN PRETTI

Quite unfortunately, we need to quickly revisit and update a monthly discussion topic from August of this year. That discussion, entitled Doscientos Mes, primarily focused on the history and importance of the 200 month moving average in looking at and trying to assess the health of the major equity indices. We will not spend a lot of time rehashing our comments, as you are free to read or reread that discussion in our Monthly Archives. To the point, recent history of the last three to four decades tells us that very often major equity bear market lows can be found at or around 200 month moving average levels. Specifically, this is exactly where the NASDAQ bottomed at the 2002 lows. The Nikkei flirted with and danced around its own 200 month MA for almost half a decade prior to plunging below its own 200 month MA, which has not acted as upside resistance for a good decade. As we stated in the August discussion, failure to find support at the 200 month MA may indeed be quite the fundamental and technical warning sign. Events of the last few months, especially October, force us to revisit this topic and perhaps expand our time horizon viewpoint just a bit in terms of watching the forward character of the major equity indices. This is one of those discussions where the charts do the bulk of the talking.

....

When we wrote the article in August, it was a warning about potentially reaching the 200-month moving averages for the major equity indices. The time for warning is now behind us as you are fully aware. Every major US equity index reached and exceeded their respective 200-month moving averages to the downside in October. The following charts very simply review where we stand at October month end. But what we’ve also done this go around, and what we believe is now important in light of recent months financial market activity, is to try to broaden our thinking into a much bigger picture time frame than we have so far into this current down cycle. Why do this now? The market is forcing us to do so. Have a look and we’ll have comments below.

....

Quickly, as a bit of an adjunct to the very long cycle Fibbonacci retracement sequences we’ve drawn into the charts above, we also want to highlight the well known Dow Theory 50% principle. We’ve been ranting and raving over the 50% principle of Dow Theory in many a discussion over the summer. But the 50% retracement levels for the major equity indices observed over the 2003-2007 bull market were cut through like a hot knife through butter over the last month. We suggested to subscribers that should 50% bull market retracement levels of the 2003-2007 bull be violated, there would be trouble. The 2003-2007 Fib retracement levels provided almost zero technical support. Although we may sound reactionary based on recent month events, we believe we need to incorporate longer cycle thinking and analysis into the equation as we move ahead. So as we review the charts above, those 50% Fib retracement levels from 1980 lows to present now become critical, in addition to watching the 200 month moving averages.

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

[Ghost Dog]

10. It is unforgivable that the magnitude of leveraged positions

extant and those that still need to be liquidated are unknowns. This degree of lack of transparency towering over not only markets but over entire local, regional and global economies must be rapidly rectified.

Meanwhile, and in any case, it is, I think, worth repeating the last paragraph in the piece linked above:

Although we’re really talking to ourselves more than not, it’s a time to remain calm, unemotional, flexible and focused on bigger picture messages of the financial markets. Daily volatility has been quite extreme as of late. Markets are reacting violently to sound bites and make it up as we go along monetary and fiscal policy really globally. The credit markets are a massive key as to ultimate financial market reconciliation and real world economic outcomes. We necessarily need to monitor credit market character closely. Uncertainty and fear abound. We simply hope that staying focused on the proper longer-term time frames can help not only necessary ongoing risk management activities, but also help keep emotionalism at bay in decision making to the greatest extent possible. All part of trying to keep our heads together in the bigger picture.

(With apologies for any excesses on my part that shouldn't have gone online last week).

[ozymandius]

12. That is the best advice one could ever follow when trading.

Stay calm, calculated and unemotional. Or, as I told one of my students last week, never put money in the markets that you are not prepared to lose.

Defenders of the status-quo, for trading opacity, are growing thin in their ranks. I've not heard anyone speak in favor of keeping things the way they are anymore.

[ozymandius]

21. I was wrong. One person still publicly cheers opaque trading: George W. Bush.

G-20 Pits Bush Versus Sarkozy-Merkel Regulation Push (Update1)

Nov. 10 (Bloomberg) -- This week's economic-crisis summit will pit U.S. and Canadian support for free markets against European demands for greater state control.

In the middle will be developing nations that hold increasing sway over the future of the global economy and don't want the trade-off between regulation and economic expansion to come at their expense.

The leaders of the Group of 20 industrial and emerging countries, gathering Nov. 14 and 15 in Washington, will consider steps ranging from raising bank-capital standards to regulating hedge funds.

Their goal is to prevent any repeat of the irresponsible risk-taking that led to the worst erosion of credit since the Great Depression. ``Necessity is the mother of invention, and there's a real necessity now for more regulation,'' says former U.S. Treasury Secretary John Snow. The hard part is figuring out how much growth they are willing to sacrifice in exchange for greater economic security.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aCUyoDMpC36A&refer=economy

---

"how much growth they are willing to sacrifice in exchange for greater economic security"

Growth? I see growth of this sort as illusory. Boom goes to bust again and again, erasing all phantom gains.

[Tansy_Gold]

44. "...never put money in the markets that you are not prepared to lose."

Didn't that used to be the first rule of "investing"?



Tansy Gold

[mrdmk]

63. That use to be the first rule in lending money to a friend

Now it is the first rule in putting money into a savings account at your local bank.

We now need to consider Wall Street a charitable foundation.

[specimenfred1984]

64. Arrest a few big-time repukes like Powell, Rice, Cheney, Rumsfeld and...

the U.S. will have instant credibility. If not, the U.S. will remain a huge gamble in every American's and world investors minds. I'd like to see this text point on a chart "Cheney arrested", then another one "Corruption trials began".

[ozymandius]

2. No goobermental reports today. nt

[ozymandius]

3. Oil jumps above $63 on higher Asian stocks

SINGAPORE – Oil prices jumped above $63 a barrel Monday in Asia as regional stock markets rallied on a massive Chinese economic stimulus plan, which could underpin demand for crude.

Light, sweet crude for December delivery was up $2.42 to $63.46 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract Friday rose 27 cents to settle at $61.04.

China's $586 billion stimulus package announced Sunday helped lift Asian stock markets Monday. The Shanghai Composite Index surged 7.3 percent, Japan's benchmark Nikkei 225 index rose 5.8 percent and Hong Kong's Hang Seng index gained 4.8 percent.

.....

According to a summary of the agency's World Energy Outlook report due to be published in full this week, the IEA has hiked its forecast for the price of a barrel of oil in 2030 to just over $200 in nominal terms, compared to last year's estimate of $108 a barrel.

In other Nymex trading, heating oil futures rose 5.66 cents to $2.04 a gallon, while gasoline prices gained 5.10 cents to $1.40 a gallon. Natural gas for December delivery rose 27.6 cents to $7.03 per 1,000 cubic feet.

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

[ozymandius]

4. Oil above $63 on Saudi supply cut

LONDON (Reuters) – Oil rose more than 3 percent on Monday, fueled by Saudi Arabia's plans to cut December supplies to Asia and hopes that global economies' plans to lift growth could avert recession.

Saudi Arabia, the world's top oil exporter, has told refiners in Asia it would cut December supplies by 5 percent, providing the most visible evidence yet that it is adhering to OPEC's agreement last month to reduce output.

....

The drop in prices from July's record high of $147.27 has already spurred OPEC to rein in supply from November 1, and some members of the group are talking of reducing production further.

http://news.yahoo.com/s/nm/20081110/bs_nm/us_markets_oil_2

[ozymandius]

5. Wall Street turns to consumers to gauge economy

NEW YORK – Wall Street heads into another turbulent week with investors set to pore over a government report on retail sales and earnings from Wal-Mart Stores Inc. to get a better reading on the consumer.

There are growing signs that the deepening economic slowdown has caused Americans to tighten their purse strings. There was fresh evidence of this past week when retailers posted the worst October same-store sales in 35 years — and analysts believe the upcoming holiday shopping season could be among the slowest in decades.

With consumer spending driving more than two-thirds of the U.S. economy, investors will be paying close attention to earnings outlooks for some of the nation's biggest retailers. Wal-Mart, the nation's biggest retail chain, will post results on Thursday. Kohl's Corp., JCPenney Co., Macy's Inc., and Abercrombie & Fitch Co. are scheduled to release reports as well.

Investors will get an overall picture of consumer spending on Friday when the Commerce Department releases its October retail sales index. The closely watched gauge is expected to show sales dropping 1.2 percent for the month after falling 1.2 percent in September. Excluding the battered automobile industry, sales are expected to have fallen 0.9 percent.

http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/wall_street_week_ahead

[Demeter]

32. Based On the Size of Sunday's Paper, The Xmas Shopping Season Now Starts on Veteran's Day

Trying to maintain the economy on a holiday is insane, you know....

[Hugin]

40. I thought it started on Xmas day at noon.

So, they're now saying that the Xmas 2008 shopping season started on Veteran's Day 2007?

Looping it back to Vet's day is kind of redundant. There's only so many days in a year. :eyes:

[Demeter]

55. That's When Thrifty Shoppers Shop

I was referring to the retailer's side of the equation.

[ozymandius]

6. Europe, Asian markets surge on China stimulus plan

LONDON – European stock markets opened higher Monday after Asia's markets were boosted by China's $586 billion plan to stimulate its economy, a main driver of global growth.

The FTSE 100 index of leading British shares was up 153.35 points, or 3.5 percent, at 4,518.31, while Germany's DAX was 178.10 points, or 3.6 percent, higher at 5,116.56. France's CAC-40 was 133.70 points, or 3.9 percent, higher at 3,6029.82.

Europe's gains follow across the board increases in Asia. Tokyo's Nikkei 225 stock average surged 498.43 points, or 5.8 percent, to 9,081.43, while Hong Kong's Hang Seng Index gained 501.20 points, or 3.5 percent, to 14,744.63.

In mainland China, where the benchmark Shanghai Composite Index has fallen by more than two-thirds since peaking October, the index soared 7.3 percent to 1,874.80. Markets in India, Australia, Singapore and South Korea joined the region's advance.

http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/world_markets

[Dr.Phool]

9. Silly Chinese.

Why didn't they just give the money to the banks, like we did?

[ozymandius]

14. This smells like evidence on how much of Big Shitpile they own.

We haven't had a clear picture of how much junk they purchased, whether they be CDOs or CDS. Asian banks have been, generally, mum to this point.

[Hugin]

15. I'm assuming all of this stimulus money will stay in...

China.

At least that's the impression given by the Press Release yesterday.

It's planned to be spent on... INFRASTRUCTURE and disaster rebuilding. I don't know why Europe is so excited.

[Dr.Phool]

16. Health care too.

[Demeter]

34. Prosecuting Food and Drug Adulterers?

Nah. That would be too useful. Relatives might get beheaded!

[ozymandius]

17. Heaven help us. China plans on providing healthcare to its citizens.

They experimented with the United States model. Turns out their healthcare system failed to provide quality services at affordable prices. Plus there was a whole lotta graft and gouging too.

[Hugin]

19. True... True...

I had forgotten that bit.

Leaving the U.S. as the only practitioner of it's worst-of-all-worlds Health Insurance Model.

[ozymandius]

7. Federal Reserve Statement on AIG

For release at 6:00 a.m. EST

The Federal Reserve Board and the U.S. Treasury on Monday announced the restructuring of the government's financial support to the American International Group (AIG) in order to keep the company strong and facilitate its ability to complete its restructuring process successfully. These new measures establish a more durable capital structure, resolve liquidity issues, facilitate AIG's execution of its plan to sell certain of its businesses in an orderly manner, promote market stability, and protect the interests of the U.S. government and taxpayers.

Equity Purchase
The U.S. Treasury on Monday announced that it will purchase $40 billion of newly issued AIG preferred shares under the Troubled Asset Relief Program. This purchase will allow the Federal Reserve to reduce from $85 billion to $60 billion the total amount available under the credit facility established by the Federal Reserve Bank of New York (New York Fed) on September 16, 2008.

Credit Facility
Certain other terms of the existing New York Fed credit facility, established on September 16, will be modified to help achieve the objectives described above. In particular, the interest rate on the facility will be reduced to three-month Libor plus 300 basis points from the current rate of three-month Libor plus 850 basis points, and the fee on undrawn funds will be reduced to 75 basis points from the current rate of 850 basis points. The length of the facility will be extended from two years to five years. The other material terms of the facility remain unchanged. The facility will continue to be secured by a lien on many of the assets of AIG and of its subsidiaries.

Additional Lending Facilities
The Federal Reserve Board has authorized the New York Fed to establish two new lending facilities relating to AIG under section 13(3) of the Federal Reserve Act. These facilities are designed to alleviate capital and liquidity pressures on AIG associated with two distinct portfolios of mortgage-related securities.

Residential Mortgage-Backed Securities Facility
In one new facility, the New York Fed will lend up to $22.5 billion to a newly formed limited liability company (LLC) to fund the LLC’s purchase of residential mortgage-backed securities from AIG's U.S. securities lending collateral portfolio. AIG will make a $1 billion subordinated loan to the LLC and bear the risk for the first $1 billion of any losses on the portfolio. The loans will be secured by all of the assets of the LLC and will be repaid from the cash flows produced by these assets as well as proceeds from any sales of these assets. The New York Fed and AIG will share any residual cash flows after the loans are repaid.

Proceeds from this facility, together with other AIG internal resources, will be used to return all cash collateral posted for securities loans outstanding under AIG's U.S. securities lending program. As a result, the $37.8 billion securities lending facility established by the New York Fed on October 8, 2008, will be repaid and terminated.

Collateralized Debt Obligations Facility
In the second new facility, the New York Fed will lend up to $30 billion to a newly formed LLC to fund the LLC's purchase of multi-sector collateralized debt obligations (CDOs) on which AIG Financial Products has written credit default swap (CDS) contracts. AIG will make a $5 billion subordinated loan to the LLC and bear the risk for the first $5 billion of any losses on the portfolio. In connection with the purchase of the CDOs, the CDS counterparties will concurrently unwind the related CDS transactions. The loans will be secured by all of the LLC's assets and will be repaid from cash flows produced by these assets as well as the proceeds from any sales of these assets. The New York Fed and AIG will share any residual cash flows after the loans are repaid.

The U.S. government intends to exit its support of AIG over time in a disciplined manner consistent with maximizing the value of its investments and promoting financial stability.

http://www.federalreserve.gov/newsevents/press/other/20081110a.htm

[Festivito]

8. Debt: 11/06/2008 10,624,730,227,798.20 (UP 57,859,590,534.90) (Kaboom, Up.)

(As though they waited for the Friday dump by borrowing heavily on Thursday. Good Monday morning all.)

= Held by the Public + Intragovernmental(FICA)
= 6,358,998,910,837.97 + 4,265,731,316,960.28
UP 56,540,493,221.63 + UP 1,319,097,313.27
(NOTE: Excel 2007 cannot handle ten-trillion plus to the penny. It zeroes the penny.)

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

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in 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 a 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)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 19,862,540,017.70.
The average for the last 30 days would be 14,565,862,679.65.
The average for the last 31 days would be 14,095,996,141.59.
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$/day.
There were 26 reports in 37 days of FY2009 averaging 23.08B$ per report, 16.22B$/day.

PROJECTION:
GWB** must relinquish the presidency in 75 days.
By that time the debt could be between 10.7 and 11.8T$.
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)
11/06/2008 10,624,730,227,798.20 GWB (UP 4,896,534,431,616.63 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 600,005,330,885.80 so far this fiscal year.

Heavy borrowing seems to start 10/18/2008.
US borrowed $960,098,424,539.13 in last 49 days.
That's 960B$ in 49 days.
More than any year ever, except last year, and it's 94% of that highest year ever only in 49 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 49 DAYS NOT 365.

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

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) YESTERDAY'S POST LINK:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3588436&mesg_id=3588915

[Lasher]

24. Jan 20 data before 1993

It is available here: http://www.lafn.org/politics/gvdc/Natl_Debt_Chart.html

[Festivito]

28. Thanks. Not the same, referencing some .org rather than .gov.

People think I'm nuts as it is, pointing out the national debt. They doubt the figures. They doubt source.

They certainly doubt that Democrats reduced the deficit while Republicans increased it. But, they will not do the math themselves.

So, we get a bunch of single date PDFs from Republicans in charge of reporting. Why? So it becomes difficult to go through report after report in order to build a single spreadsheet.

By the time someone does build a spreadsheet, they've spent so much time and effort, they need to be paid back so they have to keep it private collecting money from private donors. The result is that rabbit ear TV viewers never learn a thing.

And, they are our swing votes that determine our elections.

[DemReadingDU]

41. Thanks for posting daily debt

It's an eye opener, and most have no idea how deeply the Republicans are increasing our future debt (the taxes we haven't yet paid).
Our country is so broke, and with unemployment rising monthly indicates even less taxes being paid, what choices does Obama have?
1. increase taxes on current workers?
2. eliminate programs (medicare? social security?)
edit to add...
3. increase taxes on corporations assuming they aren't all bankrupt


:grr:

[Festivito]

61. None of those are pretty. Grr right there with you.

[Lasher]

47. The .org is associated with the Internet Archive

The Internet Archive is a 501(c)(3) non-profit that was founded to build an Internet library, with the purpose of offering permanent access for researchers, historians, and scholars to historical collections that exist in digital format. This is the actual government data, which has been stored there. Particularly if government sites have purged the data, this source should be as unimpeachable as a government website.

And note, the numbers match those you supplied upthread.

I agree with you about current government reporting, and appreciate your contribution. And I know just what you mean about building spreadsheets. Have you ever looked in on Shadow Government Statistics?

It looks like the market is up about 2% so far today. It's hard to get enthusiastic about 2% to 3% gains on two consecutive trading days after two straight days of 5% losses.

[Festivito]

60. We are responsible for more than these debt numbers.

However, the owners are not screaming at us yet. The vets with ongoing health problems, the bridges and roads needing repair, ... don't get to be listed. With GAAP they should be listed.

My analogy is that we are a nice house of US on a big-boy block in a neighborhood called world. Had a caretaker named Bill who messed with a woman in an apartment across the way. He took care of repairs. Our mortgage looked doable. In fact it could be paid by the time our elderly live-in parents would need some help with retirement since they had helped us all this time. We'd just continue making the mortgage payments, only we'd write the check to them instead.

Then we hired George, he gave each occupant $600 extra money, but quietly borrowed $1500 extra per occupant of our home. And he continued borrowing this much each year. He doesn't fix the house, so big repairs are looming. Has started costly fights with distant neighbors and when our young ones return home they are going to need a lot medical attention. He tried to get other neighbors to join him, but they were not as interested as the money we are now paying shows us. We cannot seem to live on what we make anymore, instead we borrow more and more on the credit card each month. I don't know what we'll do when the folks retire, we are told we cannot hit the rich Uncles for extra toward it. They might starve but we won't have to hear about it since the house newsletters are printed by the Uncles and they don't like talking about kind of thing. George and his buddies created a little trouble with the bank accounts, oddly, just like his dad did. Now we have to borrow even more to cover the rich Uncles losses. They really like George.

Now we are going to hire a young black fellow to run the house. George's buddies are saying that we are entering the Obama recession. Strange, since he has not even begun the job yet, and what more, it is really a depression.

[Festivito]

70. Debt: 11/07/2008 10,622,166,941,631.60 (DOWN 2,563,286,166.60) (Down a little.)

(Either they don't like to work on Fridays or they don't like big numbers come Monday afternoon. Good night.)

= Held by the Public + Intragovernmental(FICA)
= 6,358,869,286,267.95 + 4,263,297,655,363.73
DOWN 129,624,570.02 + DOWN 2,433,661,596.55
(NOTE: Excel 2007 cannot handle ten-trillion plus to the penny. It zeroes the penny.)

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

THINKING IN BILLIONS: 3 or 4 dollars per billion in a 300-Million person America.
If every American, man, woman and child puts in $3.33 each THAT'S 1B$.
A family of three: Mom, Dad, Child: THEIR SHARE IS TEN BUCKS in 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 a 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)
(I hate those end to end dollars to the moon and back, or years to spend $100/second. Just say'n)
If you read this and have a suggestion or comment, good or bad, I'd love to see it.

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 18,087,034,031.33.
The average for the last 30 days would be 13,263,824,956.31.
The average for the last 31 days would be 12,835,959,635.14.
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$/day.
There were 27 reports in 38 days of FY2009 averaging 22.13B$ per report, 15.72B$/day.

PROJECTION:
GWB** must relinquish the presidency in 74 days.
By that time the debt could be between 10.7 and 11.8T$.
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)
11/07/2008 10,622,166,941,631.60 GWB (UP 4,893,971,145,450.03 so far since Bush took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 597,442,044,719.20 so far this fiscal year.

Heavy borrowing seems to start 10/18/2008.
US borrowed $957,535,138,372.53 in last 50 days.
That's 958B$ in 50 days.
More than any year ever, except last year, and it's 94% of that highest year ever only in 50 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 50 DAYS NOT 365.

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

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) YESTERDAY'S POST LINK:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3593298&mesg_id=3593315

[ozymandius]

11. U.S. Treasury, Federal Reserve and AIG Establish Comprehensive Solution for AIG

NEW YORK - (Business Wire) American International Group, Inc. (AIG) today announced agreements with the U.S. Treasury and the Federal Reserve to establish a durable capital structure for AIG, and facilities designed to resolve the liquidity issues AIG has experienced in its credit default swap portfolio and its U.S. securities lending program.

Edward M. Liddy, AIG Chairman and CEO, said these agreements are a dramatic step forward for AIG and all of its stakeholders: “Today’s actions send a strong signal to our policyholders, business partners and counterparties that AIG is on the road to recovery. Our comprehensive plan addresses the liquidity issues that threatened AIG, and gives us the financial flexibility to complete our restructuring process successfully for the benefit of all of our constituencies.”

Liddy continued, "The $85 billion emergency bridge loan was essential to prevent an AIG bankruptcy, which would have caused incalculable damage to AIG, our economy and the global financial system. Thanks to decisive action by Congress, Treasury and the Federal Reserve, there are now additional tools available to create a durable capital structure that will make possible an orderly disposition of certain of AIG’s assets and a successful future for the company. Our goal is to repay taxpayers in full with interest, and emerge as a focused global insurer that will create meaningful value for taxpayers and other stakeholders.”

.....

Taxpayers will benefit from the transactions with AIG as follows: fees, interest and repayment of the FRBNY loan in full, payment of a 10% coupon on the newly issued preferred shares, cash payments from the assets purchased by the two financing entities and potential asset appreciation in the underlying securities held by those entities. Taxpayers will own 77.9% of the equity of AIG and will hold warrants to purchase an additional 2% equity interest, and so will benefit from any future appreciation in AIG shares.

http://www.earthtimes.org/articles/show/us-treasury-federal-reserve-and-aig-establish-comprehensive-solution-for-aig,613773.shtml

[Hugin]

13. On my list of questions is...

What happened to all of the Private Mortgage Insurance(PMI) (A.K.A Lenders Mortgage Insurance (LMI)) which has
been paid over the years?

Wiki Entry: http://en.wikipedia.org/wiki/Lenders_mortgage_insurance

Excluding this chunk of course...

"LMI/PMI tax deduction
Mortgage insurance became tax-deductible in 2007 in the USA. For some homeowners, the new law made it cheaper to get mortgage insurance than to get a 'piggyback' loan. The MI tax deductibility provision passed in 2006 provides for an itemized deduction for the cost of private mortgage insurance for homeowners earning up to $109,000 annually.

The original law was extended in 2007 to provide for a three-year deduction, effective for mortgage contracts issued after December 31, 2006 and before January 1, 2010. It does not apply to mortgage insurance contracts that were in existence prior to passage of the legislation."

I should've bought my house after 12/31/2006. :eyes:

But, where is it? It was a large chunk of money.

[ozymandius]

18. AIG: Bailed out again (more info)

Fed restructures loan and creates 2 programs to rescue insurance giant from bad bets. Treasury buys $40 billion in shares. AIG quarterly loss: $25 billion.

NEW YORK (CNNMoney.com) -- Troubled insurer American International Group got a new, $150 billion deal from the federal government on Monday, as the Federal Reserve and Treasury Department made significant changes to the terms of the company's original bailout.

The Fed announced that it will reduce AIG's original $85 billion bridge loan to $60 billion, and it will reduce the interest rate by 5.5 percentage points.

In addition, the Treasury will use its special authority under last month's $700 billion bailout law - the so-called Troubled Asset Relief Program - to purchase $40 billion in preferred stock.

http://money.cnn.com/2008/11/10/news/companies/aig/?postversion=2008111006

---

Maybe they should get a payday loan to buy lottery tickets.

[Hugin]

22. I'm always amazed they call that junk 'preferred stock'.

Preferential to AIG? Maybe that's what they mean.

So, now AIG is covered if they bet the Sun isn't going to rise tomorrow morning? Anyone know what happens when
losing bets are 100% covered... A hint, it's not a recommended treatment for Gambling Addiction.

Where's all of the Apologists who show up screaming that relieving an Individual's Credit Card Debt is Socialism?
:crickets:

[ozymandius]

23. Fed Defies Transparency Aim in Refusal to Identify Bank Loans

Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

.....

Total Fed lending topped $2 trillion for the first time last week and has risen by 140 percent, or $1.172 trillion, in the seven weeks since Fed governors relaxed the collateral standards on Sept. 14. The difference includes a $788 billion increase in loans to banks through the Fed and $474 billion in other lending, mostly through the central bank's purchase of Fannie Mae and Freddie Mac bonds.

.....

Banks oppose any release of information because it might signal weakness and spur short-selling or a run by depositors, said Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a Washington trade group.

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

---

Barney Frank says this is just fine. He spoke to New York Fed chief, Geithner, and said that Geithner is "pretty sure" the recipient banks are okay.

Pretty sure?

[UpInArms]

31. AIG swings to 3Q loss, bailout is restructured

http://news.yahoo.com/s/ap/20081110/ap_on_bi_ge/earns_aig

NEW YORK – American International Group says continued financial market turmoil resulted in a large third-quarter loss.

The U.S. government also Monday announced a restructuring of a bailout plan for the troubled insurer.

New York-based American International Group Inc. said it lost $24.47 billion, or $9.05 per share, after a profit of $3.09 billion, or $1.19 per share, a year ago.

Results included pre-tax losses of $18.31 billion tied to the declining value of AIGs investment portfolio. They were also hurt by catastrophe losses and charges related to restructuring.

...more...

[UpInArms]

35. U.S. government increases AIG bailout to $150 bln

http://www.reuters.com/article/bondsNews/idUSLA32278220081110?sp=true

WASHINGTON/NEW YORK, Nov 10 (Reuters) - The U.S. Federal Reserve hiked its support for insurer American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) to about $150 billion on Monday after an initial bailout attempt failed to stem massive losses.

Under the new plan, the government is putting $150 billion at AIG's disposal, $27 billion more than it extended previously. But the new package will leave the government exposed to billions of dollars of potential losses.

AIG shares rose 24 percent to $2.62 in premarket trade after the new rescue plan was disclosed.

The restructured bailout was announced as AIG posted a $24.47 billion third-quarter loss, the largest in the company's 89-year history, hurt by massive losses on investments and billions of dollars of insurance claims from hurricanes that battered the U.S. Gulf Coast earlier this year.

The Fed will buy $40 billion of AIG preferred shares through the U.S. Treasury's Troubled Asset Relief Program (TARP), lend it $60 billion under a credit facility, and provide $50 billion to buy distressed securities and backstop AIG's securities lending portfolio.

The new plan is nearly double the government's initial $85 billion rescue plan for AIG, forged on Sept. 16. The government said its equity stake in the insurer would still be about 80 percent.

The preferred shares will carry a dividend of about 10 percent. The U.S. will charge a lower interest rate on its loan to AIG.

AIG, once the world's largest insurer by market value, received the $85 billion bailout financing from the government in September after counterparties and rating downgrades forced the company to post large amounts of collateral for credit derivatives positions. Last month, $37.8 billion in additional federal funds were put at its disposal under a securities lending agreement. The new plan replaces both of those facilities.

On Monday, the Fed lowered the interest rate on AIG's credit facility to three-months LIBOR plus 3 percentage points from the current LIBOR plus 8.5 percentage points, and extended the term of the loan to five years from two years.

...more...

[UpInArms]

42. AIG's credit default swaps fall to 28 pct upfront

http://www.reuters.com/article/bondsNews/idUSN1045061220081110

NEW YORK, Nov 10 (Reuters) - The cost of insuring American International Group's (AIG.N: Quote, Profile, Research, Stock Buzz) debt with credit default swaps tumbled sharply on Monday after the Federal Reserve hiked its support for the insurer to about $150 billion.

Five-year credit default swaps on AIG fell to 28 percent upfront from 49 percent upfront on Friday, plus 500 basis points in annual premiums, according to data from Markit Intraday. That means it costs $2.8 million a year in upfront costs to protect $10 million of AIG's debt for five years, plus $500,000 in annual premiums.

Under a new plan, the government is putting $150 billion at AIG's disposal, $27 billion more than it extended previously, after an initial bailout attempt failed to stem massive losses.

[ozymandius]

20. Ohio braces for possible DHL layoffs

About 8,000 job cuts reportedly may be announced tomorrow, when DHL's parent company releases its quarterly earnings report.

(CNN) -- A southern Ohio community is bracing for possible layoffs as DHL Express -- the largest employer in the area -- planned to announce its quarterly earnings report and restructuring details.

DHL's parent company, German-based Deutsche Post World Net, will announce plans for its U.S. operations to investors Monday, said spokesman Jonathan Baker. He did not respond to published reports that Deutsche Post has ordered roughly 8,000 layoffs at DHL's Wilmington hub.

But Ohio officials were scrambling over the weekend to offset possible job cuts to the community. U.S. Sen. Sherrod Brown, D-Ohio, sent a letter Friday to DHL Chief Executive Officer John Mullen asking for immediate information about layoffs in the Wilmington area.

http://money.cnn.com/2008/11/09/news/companies/dhl/?postversion=2008110922

[Droopy]

26. We've been hit hard with job losses here in southwest Ohio

There was a UPS hub at the Dayton International Airport that ended operations. I think we lost a couple of thousand jobs with that one. A GM assembly plant located in the Dayton area is scheduled to close up on 12/23/08. That's going to cost us an estimated 6000 jobs when you factor in all of the truckers and parts manufacturing people who will lose their jobs as well. My brother-in-law is now unemployed. He worked for Johnson Controls which supplied the seats for the SUVs being made at the GM plant.

And now we have DHL closing up shop. This place might start looking like a ghost town pretty soon.

[54anickel]

45. Thanks for the local update Droopy. There's a similar picture developing up here around the

Janesville plant. Smaller pieces and parts suppliers closing after filling final orders when the Janesville plant goes down 12/23/08. Then there will be another hit to the local economy as day cares, diners, malls and entertainment facilities struggle for "able paying" customers. Not sure who GM's major carrier is for the Janesville plant, (I think it's Con-way) but I'm sure they're headed for a world of hurt as well.

[Tansy_Gold]

66. This is why I still question the conventional wisdom that the housing market

is the foundation of the economy. Someone was just on NPR this morning talking about it -- I only caught part of hte interview so I don't know who it was -- and saying that the first priority would be to stablize the housing market, keep people in their homes, and get them buying new ones.

EXCUSE ME -- but don't they need JOBS to do that?

I know I've been kind of not here recently. My brain was in paralysis over the election and now I'm trying to catch up on all the essential work that slid while I was in emotional meltdown, but the world didn't change all that much in the past few weeks, did it? Jobs are still the basis of the economy, aren't they? And it's manufacturing jobs that create wealth, aren't they?

The idea of rebuilding the national infrastructure as a way to get people back to work is good, but then when they have wages to spend, won't they need goods to spend them on? And if there are no local manufacturing jobs to produce those goods, won't we ultimately end up right back where we were in August/September '08?



Tansy Gold, who needs to just do some laundry and stop thinking so much

[Hugin]

67. I've been pondering this point myself...

Until TPTB come up with some way to build houses far away and ship them to the U.S. Housing construction
is one of the few job groups which can't be outsourced. (Maybe this accounts for the push for tent cities.)

Granted most of the fixtures and appliances can be outsourced.

Who's going to be buying? :shrug:

But, TPTB aren't capable of thinking in these dimensions as demonstrated by their dogged bailing out of
strictly the financial sector (Which, I might add is the only thing they see on a day-to-day basis.)

They've killed their market.

:noddinghead: Such a mess.

[Tansy_Gold]

69. Apparently Williams was correct

William Appleman Williams, that is, in "The Great Evasion."

Shit, now I wish I had a degree in economics so I could speak with some authority on this, but it just seems to me that Williams was right -- we should long ago have admitted the STUDY of Marx and marxism into the general overview of economics instead of anathematizing him in favor of wholesale (pun intended) acceptance of market/corporate capitalism. In terms of a consumer economy, the housing market does indeed appear to be primary, and any exploration of the labor basis of the economy stinks so vividly of marxism that we (they?) tend not even to consider it. It's already been discredited (pun intended, of course) and needs no further examination.

Or did I get that wrong, too?


Probably.


Tansy Gold

[UpInArms]

25. dollar watch

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

Last trade 85.191 Change -0.932 (-1.20%)

Reality Bites

http://www.bktraderfx.com/site/fx-weekly-reports/fx-weekly-reality-bites-117-1408

The divide between blue and red states in America reminds me of the differences between technicians and fundamentalists in the market. And although I come from the bluest zip code, of the bluest Congressional district, of the bluest state in the nation I have long ago recognized that our most successful politicians in the post WW2 period (Reagan, Clinton, Obama) have been able to appeal to both sides of the aisle while our worst (Nixon, Carter,W Bush) have been horrid partisan hacks that damaged the country for years to come.

Is there a lesson for traders in American politics? I believe there is. Just as good politicians are able to combine the best ideas of market principles and social justice for a better society, so too the most successful traders are able to synthesize the fundamentals and technicals to create consistently profitable positions.


————–FX Market Outlook————–

First year economics students learn that the most primitive model of economic activity is nothing more than just a construct of self fulfilling expectations. Consumers feel good. They spend money. In response businesses produce more goods and services, hire more workers, who in turn buy even more goods and services and the GDP grows. On the flip side, consumers feel bad. They retrench. Businesses cut back, fire workers and final demand plummets as a result and GDP contracts.

The longer I live the more I am amazed at how accurately this ridiculously simple model reflects the reality of market economy. Forget econometrics, forget multi-variate formulas. To understand economic reality all you need to do is understand this model. Of course as I write this piece reality bites. ISM data this week printed to 38.9 -its worst reading since 1982. Unemployment hit a 14 year high at 6.5% and US automakers look like the next sector to go belly up. Even the mighty Toyota hinted that it may actually book a loss in the second half of the year. Welcome to the vicious cycle.

How bad will it get? No one knows. One thing however, seems reasonably certain. The economic situation in US is likely to get worse before it gets batter. Too much wealth has disappeared into very stupid investments in real estate and supply is still coming online. New York is still littered with hundreds of half built skyscrapers (three on my street alone) that will hit the market next year. Who will pay $1M for a 600 square foot studio in Manhattan?

...more...

Fed's Warsh: Fundamental Reassessment of Every Asset Everywhere

http://calculatedrisk.blogspot.com/2008/11/feds-warsh-fundamental-reassessment-of.html

" should be steady when financial market participants are fearful, and fearful when markets appear steady."
Governor Kevin Warsh, Nov 6, 2008
Yes, the Fed was not properly fearful when markets appeared steady. As Paul Volcker said in Feb 2005:
"Under the placid surface, at least the way I see it, there are really disturbing trends: huge imbalances, disequilibria, risks – call them what you will. Altogether the circumstances seem to me as dangerous and intractable as any I can remember, and I can remember quite a lot."
Too bad the policymakers didn't listen then.

Here are few excepts from Fed Governor Kevin Warsh's speech: The Promise and Peril of the New Financial Architecture
There are some notable signs of improvement. Short-term funding spreads are retreating from extremely elevated levels. Funding maturities are being extended beyond the very near term. Money market funds and commercial paper markets are showing signs of stabilization. And credit default swap spreads of banking institutions are narrowing significantly.

Nonetheless, financial markets overall remain strained. Risk spreads remain quite high and lending standards appear strict. Indications of economic activity in the United States have turned decidedly negative. The economy contracted slightly in the third quarter, and the recent data on sales and production suggest that the fourth quarter will be weak.

Still, the depth and duration of this period of weak economic activity remain highly uncertain.

...more...

Wave of Redemptions Hits Hedge Funds

http://globaleconomicanalysis.blogspot.com/2008/11/wave-of-redemptions-hit-hedge-funds.html

Myron Scholes, the 1997 Noble Prize Winning Genius involved in the demise of Long Term Capital Management has done it again. Scholes's Platinum Grove Fund Halts Withdrawals After Losses.
Platinum Grove Asset Management LP, the hedge-fund firm co-founded by Nobel laureate Myron Scholes, temporarily stopped investor withdrawals from its biggest fund after it lost 29 percent in the first half of October.

The decline left Platinum Grove Contingent Master fund with a 38 percent loss this year through Oct. 15, according to investors. Funds employing a similar approach of exploiting differences in the value of related securities fell 14 percent last month and 30 percent this year, according to data compiled by Chicago-based Hedge Fund Research Inc.

"The suspension is necessary given current market conditions,'' Ryebrook, New York-based Platinum Grove said in an e-mailed statement today. "Platinum Grove will use this period to consult with its investors and counterparties, determine their future intentions and manage the assets of the fund accordingly.''

Hedge funds are reeling from the worst financial crisis since the Great Depression, losing an average of 20 percent this year, according to Hedge Fund Research. A surge of investor redemptions forced firms such as Blue Mountain Capital Management LLC and Deephaven Capital Management LLC to freeze funds to stem the tide of withdrawals.

Scholes, 67, winner of the 1997 Nobel Prize in economics, was a founding partner in Long-Term Capital Management LP, the hedge fund that lost $4 billion a decade ago after a debt default by Russia. He started Platinum Grove in 1999 with Chi-fu Huang, Ayman Hindy, Tong-sheng Sun, and Lawrence Ng, who had all worked at Long-Term Capital.

...more...

[formercia]

27. Freezing funds

I bet those investors left holding the bag are a happy bunch.

[DemReadingDU]

29. GMAC Is Insulated From ResCap Woes

11/10/08
The exposure of GMAC Financial Services to a potential bankruptcy filing by its Residential Capital LLC mortgage-lending unit could be limited by an agreement reached several years ago. That agreement, however, had been put in place in 2005 to protect ResCap from GMAC.

"It's ironic. You never know how things are going to unfold," said Jack Bartko, a credit analyst at Standard & Poor's. "At this point, ResCap seems to be the albatross."

ResCap's chances of survival suffered a setback Friday after S&P pushed the mortgage unit's credit ratings deeper into junk territory and left the door open to further downgrades. S&P also downgraded GMAC. General Motors Corp. owns 49% of GMAC. A consortium led by private-equity firm Cerberus Capital Management LP owns the rest.

ResCap on Wednesday posted a third-quarter loss $1.9 billion, which made up the bulk of GMAC's $2.52 billion loss for the period. ResCap's common equity dwindled to $2.3 billion in the quarter, down 60% from a year earlier. This means another hefty quarterly loss could wipe out its common equity. "Absent economic support from GMAC, substantial doubt exists regarding ResCap's ability to continue as a going concern," GMAC said.

"It's rational to think that the ability and willingness of GMAC to support ResCap has to decline," said Craig Emrick, an analyst at Moody's Investors Service. "Each quarter confirms our opinion that doesn't have a viable franchise and very likely doesn't have the ability to produce cash flow to honor its debt obligations."

GMAC in 2005 restructured ResCap's business model to establish the mortgage lender as a distinct entity. At the time, ResCap was GMAC's crown jewel, raking in profit at the height of the residential real-estate bubble. The idea had been to protect ResCap from declining credit ratings at GM and GMAC so ResCap's access to cheap funding wouldn't be restricted. The agreement also isolated ResCap and GMAC from any bankruptcy filing by the other. That clause provides some relief to GMAC now. It could also allow the finance arm to cut itself loose from ResCap if the mortgage unit files for bankruptcy protection.

more...
http://online.wsj.com/article/SB122627770773112217.html?mod=googlenews_wsj

[dweller]

30. Sunday's Non Sequitur

in case anyone missed it. :D





the post turtle strikes again...
dp

[Hugin]

37. Ouch.

So true it hurts.

:lol:

[DemReadingDU]

33. Some G.M. Retirees Are in a Health Care Squeeze

11/10/08
General Motors is living on borrowed time, spending more than $2 billion in cash a month and lobbying for a government bailout to keep it out of bankruptcy.

And for about 100,000 of its white-collar retirees, time is about to run out on G.M.’s gold-plated medical benefits.

To conserve its dwindling cash reserves, G.M. is eliminating lifetime health care coverage for its legions of retirees at the end of this year, leaving people like Ken Hewitt to fend for themselves in deciding how to cover their doctor’s bills and prescription drug costs.

“Everybody felt like they were set for life,” said Mr. Hewitt, 81, who retired from the former Chevrolet Engineering Center in 1982 and lives north of Detroit. “It’s been difficult, but the information they’ve given us has been beneficial. Still, when you get to be our age, it’s tough to make any big changes like that.”

G.M. has had little choice this year but to make deep cuts wherever it can, including benefits that were long considered sacred.

more...
http://www.nytimes.com/2008/11/10/business/10gm.html?_r=1&th&emc=th&oref=slogin

[UpInArms]

36. Fannie Mae posts $29 billion loss in third quarter

01. Fannie Mae Q3 revenue $4.1 billion vs $2.7 billion year ago
8:33 AM ET, Nov 10, 2008

02. Fannie Mae Q3 loss $29 billion vs $1.4 billion loss year ago
8:32 AM ET, Nov 10, 2008

03. Fannie Mae Q3 loss $13 a share vs $1.56 loss year ago
8:31 AM ET, Nov 10, 2008

http://www.marketwatch.com/news/story/Fannie-Mae-posts-29-billion/story.aspx?guid=%7BF2AA6E2E%2D5BD7%2D48D9%2D8BAA%2D36AF1E74D2DF%7D

NEW YORK (MarketWatch) -- Fannie Mae (FNM: 0.74, +0.03, +4.2%) on Monday said its third-quarter loss widened to $29 billion, or $13 a share in its fiscal third quarter ending Sept. 30, from a loss of $1.52 billion, or $1.56 a share in the year-ago period. Fannie Mae also reported a decrease in the non-GAAP estimated fair value of its net assets, from a positive $35.8 billion on Dec. 31 to a negative $46.4 billion on Sept. 30. Third-quarter results were driven primarily by a $21.4 billion non-cash charge to establish a valuation allowance against deferred tax assets, as well as $9.2 billion in credit-related expenses arising from the ongoing deterioration in mortgage credit conditions and declining home prices, the Washington, D.C. lender said. On Sept. 6, Fannie Mae began operating under the conservatorship of the Federal Housing Finance Agency.

[Trojan]

39. Why Washington Cannot Stop Depression !!!

http://www.moneyandmarkets.com/why-washington-cannot-prevent-depression-27968

Snippet:

The Debt Crisis, the Primary Catalyst
of the Economy’s Decline, Is Far Too Big
for the U.S. Government to Control

The facts:

1. Based on the Federal Reserve’s Flow of Funds report, there are now $52 trillion in interest-bearing debts in the U.S.

2. Based on estimates provided by the U.S. Government Accountability Office and other sources, it’s safe to assume that there are also at least $60 trillion in contingency debts and obligations now starting to kick in — for Social Security, Medicare and other pensions.

3. Separately, the Bank of International Settlements reports that the total value of debts and bets placed worldwide (derivatives) is $596 trillion, or more than a half quadrillion!

In contrast, even after the most reckless outpouring of government bailouts in recent months, the total rescue money announced in the U.S. so far is $2.7 trillion — a huge, unwieldy amount, but still minuscule in comparison to the massive debt build-up.


The numbers are not directly comparable, but just to get a sense of the magnitude of the problem, compare the size of the debts and bets outstanding (the first three bars in the chart) with the size of the $2.7 trillion in bailout commitments thus far (barely visible in the chart).

Still, most people insist,

“If only Washington can avoid the mistakes it made in the 1930s … if only Washington can preemptively nip this crisis in the bud … if only Washington can be our lender and spender of last resort … Great Depression II will never come to pass.”

What they don’t see is the fact that the debt build-up in the U.S. today is far greater than it was on the eve of Great Depression I. Indeed, in the chart below, Claus Vogt, the editor of Sicheres Geld (the German edition of our Safe Money Report) shows how …

Prior to the 1930s, the total debt in the U.S. was between 150% and 160% of GDP. Now it’s close to 350% of GDP.



Moreover, he reminds us that this chart does not even include derivatives, which barely existed in the 1930s but which are now sinking banks deeply into the red.

Clearly the government bailouts are too little, too late to end this crisis. At the same time …

[UpInArms]

38. Worst retail sales trend since 1974 expected

http://www.marketwatch.com/news/story/worst-retail-sales-trend-since/story.aspx?guid=%7B3D36EF95%2D90C0%2D44B6%2DB72E%2DB82EE404D685%7D&dist=morenews_ts

WASHINGTON (MarketWatch) -- The election heard around the world has ushered in a political sea change throughout the United States.

But Barack Obama. the president-elect, can't look forward to smooth sailing. The recession, persistent distress in the housing and financial markets and mounting job losses will demand his attention, even as immediate remedies may prove elusive. Upcoming data on retail sales are likely to show that consumers, strapped by a credit crunch and rising unemployment, are cutting back on spending.

Still, hope abounds. Thousands of Obama supporters reveled in front of the White House during Wednesday's wee hours. While their widespread elation was clear, one has to wonder how long such spirits will hold up during these tough times.

At a press conference Friday, Obama said a stimulus package is his top priority, and spoke about tough choices for a country with an economy plagued by job losses and financial crisis.

"I do not underestimate the enormity of the task that lies ahead," he commented. "We have taken some major actions to date, and we will need further actions during this transition and subsequent months." Read more.

Data in coming days will shed light on how far those actions need to go.

...more...

[UpInArms]

43. Circuit City files for Chapter 11 bankruptcy

http://www.reuters.com/article/bondsNews/idUSN1042130420081110

NEW YORK, Nov 10 (Reuters) - Circuit City Stores Inc (CC.N: Quote, Profile, Research, Stock Buzz), the No. 2 U.S. consumer electronics retailer, filed for bankruptcy protection on Monday just a few weeks before the start of the key holiday shopping season, becoming the largest retailer to file under Chapter 11 this year.

Circuit City fell victim to tighter credit terms from vendors and a loss of market share to Best Buy Co (BBY.N: Quote, Profile, Research, Stock Buzz), Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research, Stock Buzz) and other rivals.

The retailer and 17 affiliates filed for Chapter 11 protection from creditors with the U.S. bankruptcy court in Richmond, Virginia, where it is based.

Circuit City filed one week after saying it would close 155 stores, or more than one-fifth of its retail base, and eliminate 17 percent of its U.S. workforce. It also said it was considering all options to restructure.

In a court filing on Monday, Chief Financial Officer Bruce Besanko said the retailer filed for Chapter 11 in order to continue its turnaround efforts.

"In large part, a Chapter 11 filing is due to three factors, all of which contributed to a liquidity crisis that prevented the company from completing its turnaround goals outside of formal proceedings: erosion of vendor confidence, decreased liquidity and a global economic crisis," Besanko said.

PINCHED SUPPLIERS

Circuit City had lost money in five of the last six quarters. In recent weeks, suppliers pinched by the global credit crunch have tightened terms, sometimes requiring up-front payments before shipping goods.

...more...

[Roland99]

46. I have no tears to shed for them.

[Demeter]

57. I Bet Blockbusters Is Glad They Didn't Bite

Most mergers are bad, anyway, IMO.

[Roland99]

48. GM'S STOCK FALLS 30% AFTER ANALYST SETS SHARE-PRICE TARGET OF $0

GM'S STOCK FALLS 30% AFTER ANALYST SETS SHARE-PRICE TARGET OF $0

Deutsche Bank sees GM shares as likely worthless
Automotive giant may have trouble funding past December, broker warns

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BCAFEF63F%2D017D%2D42E2%2D874A%2D14146A6D20A5%7D

LONDON (MarketWatch) -- Shares of General Motors Corp. got downgraded to sell from hold and were labeled Monday as likely to be worthless by Deutsche Bank, which said the car maker may not be able to fund its U.S. business past December without government intervention.

GM's shares, part of the Dow Jones Industrial Average, dropped 17% to $3.62 in early action, continuing their recent retreat.

Deutsche Bank analyst Rod Lache said in a note to clients that he believes the government will be compelled to intervene to shore up Detroit-based GM through a capital infusion or loan.

...

If GM manages to avoid bankruptcy, equity shareholders are unlikely to get anything back, Lache said in slashing his target price for the shares to nil from $4.

[DemReadingDU]

49. $0?

GM must already be bankrupt

[Hugin]

50. I view it as a buying opportunity.

Finally! A stock I can afford!

[DemReadingDU]

52. LOL

:rofl:

[antigop]

59. So how many shares can we buy at that price? Hey, let's buy out GM! n/t

[Hugin]

62. I'm on it...

My Broker says we still have to cover Shipping and Handling, but, I've got a cousin who rents storage units with
the free use of a truck.

[Roland99]

68. Soo...if the SMW denizens of GM buyout GM....

What do we call it?

:-)

[Hugin]

71. We'll call GM a tiny little division of the DU:SMW.

Ahh... It'll be so cool man.

Of course, it'll go All Electric/Hydrogen ASAP.

Edit to add: Unless you as a co-owner of SMW/General Motors have a better idea. ;)

[ozymandius]

76. Put me down for ten million shares.

If that stock even thinks about going to a penny, I'll sell.

[specimenfred1984]

65. I told a neighbor who works for Chevy that GM was in trouble about 6 months ago

The neighbor laughed and said "GM is fine, they'll be OK". Isn't it wonderful to live in a world full of delusional citizen-bots? LOL.

[antigop]

51. Another disaster you didn't need -- pension fund vapors

http://www.istockanalyst.com/article/viewarticle+articleid_2773667.html

The election's over. President-elect Barrack Obama won, and some people are worried that he'll start taxing dividends like income. Have I got news for you... that's the least of our worries on the dividend front. Put it in the drawer for next year's hand wringing.

Because just when you thought the financial news had exhausted all the bad stuff and you had found safety in dividend stocks, I have to give you a heads up. Your stock could be getting a pension fund "margin call."

I love dividend stocks. These companies have cash, pay cash, and keep the faith with investors for the most part. But some are on the verge of breaking that faith this year. It has nothing to do with mortgages or credit markets - it's about pension funds in trouble.

And when pensions are sucking up cash flow, your dividends could suffer. Mercer, a pension consulting firm that is part of Marsh & McLennan (MMC), already estimates that pension shortfalls will lead to a 10% cut in stock dividends this quarter compared to a year ago.

That's a big deal. Even the 2003 squeeze on pension funds after the three-year-long post-dot-com bear market didn't cause that. In fact, this could be the first time pensions have been hit so hard since 1958.

[DemReadingDU]

53. Thanks for posting articles about pensions, n/t

[antigop]

58. You are welcome. It is one topic that I follow quite closely. n/t

[Ghost Dog]

54. Obama backs crackdown on tax havens

The Observer, Sunday November 9 2008 President-elect Barack Obama plans to crack down on international tax havens, including Jersey, Guernsey and the Isle of Man, within weeks of taking power in January, putting him on a collision course with Gordon Brown.

There is growing international pressure to outlaw the secretive practices of tax havens as a key part of reforms to the world's battered financial system, as the leaders of the world's 20 most powerful economies gather for a major conference in Washington next weekend.

Britain has been notably lukewarm, but Obama, whose approval will be key to any reform package over the next 12 months, was one of the signatories of the Stop Tax Haven Abuse Act, legislation put to Congress last year that blacklisted Jersey, Guernsey and 32 other jurisdictions. Key aides to Obama said he will introduce a similar law as part of a wide-ranging revenue-raising and tax-reform package, within weeks of taking power.

Obama advisors estimate the measure could raise at least $50bn (£32bn) per year in lost US tax revenues, and Washington sources say leading accountancy firms have already hired lobbyists in anticipation of a fierce battle to water down the proposals.

Key measures are likely to include: revealing the beneficial owners of secretive trusts; prohibiting accountants from charging fees on specific tax services; and identifying 'offshore secrecy jurisdictions' that 'unreasonably restrict US tax authorities from obtaining needed information'. The measures could end years of financial secrecy that have protected the super-rich and international businesses as they move money from one jurisdiction to another.

Joe Guttentag, deputy assistant secretary for international tax in the Clinton administration and a key figure in the Obama campaign, is likely to drive the policy through, along with Professor Reuven Avi-Yonah, who helped frame the act. 'It is expected that something like this will happen,' Avi-Yonah told The Observer. 'There is a sense that if you can raise revenue by doing this, it will not be controversial.'

The measure comes as the UK faces international condemnation for blocking moves in the United Nations to upgrade its tax committee to intergovernmental status.

/... http://www.guardian.co.uk/business/2008/nov/09/barack-obama-tax-havens-crackdown

[Ghost Dog]

56. Banks urged to expose child porn money trails

The Observer, Sunday November 9 2008 European banks are under pressure to crack down on the owners of child pornography websites, following a legal breakthrough that has enabled international enforcement agencies to identify those who profit from them.

A meeting in Brussels next month will see child protection agencies and lawyers attempt to persuade the European Banking Federation and law enforcement agencies to form a financial coalition to combat what is a $2bn industry.

The meeting comes after 100 lawyers from Allen & Overy spent the past year developing a framework to circumvent data protection regulations, bank secrecy codes, criminal legislation and contract law across the EU. Until now, it has been virtually impossible for investigators to follow money trails leading to the successful prosecution of the financiers of child porn sites.

The lawyers, led by Allen & Overy managing partner Wim Dejonghe, all worked for free on the project. Dejonghe said lawyers were now attempting to create similar frameworks in Asia.

/... http://www.guardian.co.uk/business/2008/nov/09/child-porn-money-trials

... And let's hope America and elsewhere can see their way to follow suit ...

[Dr.Phool]

72. What happened to SMW?

DU down? Everyone on SMW arrested for treason?

I left at about 10:00am this morning, the Dow was up almost 200pts, some idiot on CNBC was saying the recession is over, and no posts here since before noon.

Things were posting kind of slow this morning.

Or is it my puter?

[Hugin]

74. I've been on the phone all day trying to buyout GM.

At $0/share it was a deal I couldn't refuse.

Better than Citibank a few months ago.


Oh, and I ate some real Chocolate and got a blinding headache for a couple of hours.

[Dr.Phool]

75. If you're looking for a bailout, I want a piece!

[Hugin]

78. I've put together the specs for our first auto... I'm calling it the DU-Go.

It'll have a 20,000 MegaWatt Solar Array main/JATO passing assist and a little flower vase on the dash. :)

I figure possibly Demeter, Tansy_Gold or AnneD will buy one.

[Ghost Dog]

79. Nah, hitch your car up to a locomotive running on tracks

(and build lots of tracks (== lots of "construction jobs")).

Oh, and power the locomotive running on electricity, yes,

perhaps, as well as solar/wind/etc,

powered by these: http://www.hyperionpowergeneration.com/

:)

[Demeter]

80. I Don't Get to Post Much on Weekdays

I spent the first hour and a half this morning replacing the zipper in my daughter's winter coat that she destroyed last year....if it got up to freezing today, I'd be surprised. And last week it was 70F, thanks to Hurricane Paloma pumping up hot air from the Caribean! Never a dull moment.

Now that the condo conversion, the election and getting the car ready for winter have been dealt with, I can concentrate on getting caught up on the 3 or 4 bushels of mending and the cleaning.

PS: We're going to court in December to get my daughter legally home to stay--the bitch that started our problems has conceded in writing that Daughter does better at home than with strangers on shifts....fancy that!

Have you noticed all the crazies are getting more so?

And what's with AIG? It's beginning to smell like BCCI.

[specimenfred1984]

82. People avoiding the entire site, don't like being hit up for money

especially from a site that bashes Reid, Pelosi, Hillary and every other dem 24/7 with 500 rec's usually going to the best bash of a democrat. It reeks like a repuke site around here on most days. Yesterday, one of the top posts was telling everyone to "get the fuck out" for expressing their opinions, LOL.

[Ghost Dog]

73. GLOBAL MARKETS-Stocks fall as euphoria over China plan fades

Mon Nov 10, 2008 4:24pm EST NEW YORK, Nov 10 (Reuters) - U.S. stocks fell and risk aversion returned on Monday after the initial euphoria over China's nearly $600 billion stimulus plans faded and news of corporate distress kept investors focused on economic worries.

A jump in the cost of rescuing American International Group Inc (AIG.N: Quote, Profile, Research, Stock Buzz) to $150 billion after a smaller bailout failed, a record quarterly loss at Fannie Mae and a plunge in General Motors' shares to 62-year lows cast a pall over markets.

Oil trimmed gains of more than 7 percent to settle up 2 percent as Saudi Arabia's move to cut supplies and China's stimulus plans aided crude prices and market volatility.

U.S. stocks initially rose following gains in Europe and Asia after China approved a $586 billion government spending package on Sunday and said it would adopt a "moderately easy" monetary policy. But the euphoria fizzled as investors doubted the steps would be enough to avert a steep global downturn.

...

AIG reported a record $24.47 billion third-quarter loss, while Fannie Mae, the largest source of funding for U.S. homes, reported a record $29 billion loss and said it is losing money so fast it may seek more government funds to avoid shutting.

In other dire news, electronics retailer Circuit City Stores Inc (CC.N: Quote, Profile, Research, Stock Buzz) filed for bankruptcy in the largest U.S. retailer to seek court protection from creditors since 2002.

And in a sobering forecast, chief economist Jan Hatzius of Goldman Sachs said worldwide losses from the credit crisis will total $1.4 trillion, of which only $800 billion have been realized so far.

The financial sector led U.S. stocks lower after Barclays analysts said they expected Goldman Sachs to post a quarterly loss for the first time in the company's history due to steep equity market declines.

McDonald's Corp (MCD.N: Quote, Profile, Research, Stock Buzz) helped the Dow fare better than the S&P 500 and Nasdaq. The world's largest hamburger chain said global sales at its fast-food restaurants open at least 13 months rose 8.2 percent in October, topping analysts' targets.

McDonald's shares rose 1.8 percent and GM shares plunged almost 23 percent to $3.36.

Another big Dow gainer was Alcoa, whose shares jumped more than 5 percent on a rise in metal prices.

The Dow Jones industrial average .DJI closed down 73.27 points, or 0.82 percent, at 8,870.54. The Standard & Poor's 500 Index .SPX fell 11.77 points, or 1.26 percent, at 919.22. The Nasdaq Composite Index .IXIC slipped 30.66 points, or 1.86 percent, at 1,616.74.

The FTSEurofirst 300 index of top European shares trimmed gains to close up 0.9 percent at 922.48 points.

Analyst said European stocks have rebounded from oversold levels over the past few weeks. It was the eighth day of gains in the last 10 for the pan-European benchmark.

/... http://www.reuters.com/article/marketsNews/idINN1047744520081110?rpc=44&sp=true

[ozymandius]

77. Here's how the story ended.

Dow 8,870.54 Down 73.27 (0.82%)
Nasdaq 1,616.74 Down 30.66 (1.86%)
S&P 500 919.21 Down 11.78 (1.27%)
10-Yr Bond 3.76% Down 0.02
NYSE Volume 4,670,803,000
Nasdaq Volume 1,732,501,750

4:20 pm : Stocks fell Monday as concerns regarding financial and automaker companies overshadowed news of a massive Chinese fiscal stimulus and a restructuring of AIG's (AIG 2.28, +0.17) government bailout.

The S&P 500 opened 2.3% higher as overseas markets rallied on the Chinese fiscal stimulus plan, but gave up those gains as the financial sector faltered. In the end, the S&P 500 fell 1.3% in below average volume with eight of the ten economic sectors posting a loss.

China will spend $586 billion, equal to a 18% of its GDP, in a plan to support its domestic economy and restore global economic health. The two-year package will target a broad range of industries, including housing, infrastructure and health care.

In corporate news, AIG rose 8% on word its bailout from the U.S. government has been amended, including an expansion in aid to $150 billion from $123 billion and better loan terms. The move is meant to give AIG more time to sell assets after losing $24.5 billion in the third quarter, and stands to reassure investors that the insurance giant will be able to satisfy its counterparty obligations.

Despite the strength in AIG, the financial sector dropped 4.4%, with notable weakness in Goldman Sachs (GS 70.94, -6.87). Goldman had its fourth quarter earnings estimate cut to a loss of $2.50 per share from a profit of $2.71 at Barclays. Barclays cited dramatic equity market declines. On average, analysts expect Goldman to post fourth quarter earnings of $1.46 per share.

General Motors (GM 3.29, -1.07) tumbled to its lowest level in six decades after it was downgraded to Sell from Hold and had its price target cut to $0 from $4 at Deutsche Bank. GM may not be able to fund its U.S. operations beyond December without government intervention, Deutsche Bank said. Ford (F 1.94, -0.08) fell 4%.

The financial market turmoil and slowdown in consumer spending is taking a toll on retailers (-2.0%). Circuit City (CC 0.11, -0.14) filed for Chapter 11 bankruptcy protection due to stiff competition and financial market disruptions that limited the retailer's access to credit.

UPS (UPS 53.66, +1.74) and FedEx (FDX 66.27, +1.69) gained on news that they will have less competition in the U.S. starting early next year. DHL U.S. Express said it will discontinue domestic-only air and ground services to only focus on international offerings. The shipping company, owned by Germany-based Deutsche Post World Net, will cut 9,500 U.S. jobs, on top of the 5,400 jobs it has already eliminated.

On a positive note, McDonald's (MCD 56.58, +1.11) continues to benefit from its relatively low price offerings. The company said October U.S. same-store sales increased by 5.4% and global same-store sales rose by 8.2%. U.S. sales, which accounted for 35% of McDonald's 2007 revenue, were aided by the popularity of the Monopoly game.

In commodity trading, oil surged as high as 7.4% and gold gained as much as 4.7% as traders speculated that the Chinese stimulus plan would spark increased demand. Commodities (+1.7%) gave up much of those gains by the end of the session, however, with oil settling up 1.9% to $62.22 per barrel and gold advancing 1.6% to $746.10.DJ30 -73.27 NASDAQ -30.66 NQ100 -1.6% R2K -2.5% SP400 -2.5% SP500 -11.78 NASDAQ Adv/Vol/Dec 745/1.71 bln/1954 NYSE Adv/Vol/Dec 991/1.14 bln/2095

[Roland99]

81. Thanks ozy

Had a pretty busy Monday on my end.