STOCK MARKET WATCH, Monday March 31, 2008

[Demeter]

Source: DU

--------------------------------------------------------------------------------
STOCK MARKET WATCH, Monday March 31, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 296
DAYS SINCE DEMOCRACY DIED (12/12/00) 2626 DAYS
WHERE'S OSAMA BIN-LADEN? 2351 DAYS
DAYS SINCE ENRON COLLAPSE = 2643
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.

AT THE CLOSING BELL ON March 28,
2008>

Dow... 12,216.40 -86.06 (-0.70%)
Nasdaq... 2,261.18 -19.65 (-0.86%)
S&P 500... 1,315.22 -10.54 (-0.80%)
Gold future... 936.50 -17.50 (-1.87%)
30-Year Bond 4.35% -0.03 (-0.71%)
10-Yr Bond... 3.47% -0.07 (-1.92%)







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>

---

No link yet.

[ozymandius]

1. Good morning Demeter. Try this for image links.

[font size=2][b]STOCK MARKET WATCH, Monday March 31, 2008[/b]

[b][font color=red]COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 296 [/font][font color=red]
DAYS SINCE DEMOCRACY DIED (12/12/00) 2626 DAYS
WHERE'S OSAMA BIN-LADEN? 2351 DAYS
DAYS SINCE ENRON COLLAPSE = 2642
Number of Enron Execs in handcuffs = 19
ENRON EXECS CONVICTED = 10
Enron execs conveniently deceased = 3
Other Arrests of Execs = 54
[/font]
[HR width=85%]
[link:money.cnn.com/markets/morning_call/|U.S. FUTURES &
MARKETS INDICATORS]
NASDAQ FUTURES-----------------------------S&P FUTURES
http://i.cnn.net/money/ssi/BC/AM_marketcall/nasdaq_future_large.gif
http://i.cnn.net/money/ssi/BC/AM_marketcall/sandp_future_large.gif

[HR width=85%]

[font color=blue][b]AT THE CLOSING BELL WHEN BUSH TOOK
OFFICE[/font] on January 22, 2001[/b]
[font color=red]Dow - 10,578.24
Nasdaq - 2,757.91
S&P 500 - 1,342.90 
Oil - $27.69/bbl
Gold - $266.70/oz.[/font]

[link:/finance.yahoo.com/?u|AT THE CLOSING BELL ON March 28,
2008]
[font color=red][b]
Dow... 12,216.40  	    	  -86.06     	  (-0.70%)
Nasdaq... 2,261.18  	    	  -19.65     	  (-0.86%)
S&P 500... 1,315.22  	    	  -10.54     	  (-0.80%)
Gold future... 936.50	 	 -17.50  	 (-1.87%)
30-Year Bond  	4.35%  	    	  -0.03    	  (-0.71%)
10-Yr Bond... 	3.47%  	    	  -0.07    	  (-1.92%)
[/b][/font]

http://money.cnn.com/ssi/BC/markets-data/dow.gif
http://money.cnn.com/ssi/BC/markets-data/nasdaq.gif
http://money.cnn.com/ssi/BC/markets-data/sandp.gif
http://money.cnn.com/ssi/BC/markets-data/bond.gif 

[left]http://www.wtrg.com/daily/small/clfclose.gif
http://www.wtrg.com/daily/small/ngfclose.gif[/left]

[b][font color=blue font size=2][link:www.kitco.com/|GOLD,
EURO, YEN, Loonie and Silver][/b][left]
http://www.kitconet.com/charts/metals/gold/t24_au_en_usoz_2.gif
http://www.weblinks247.com/exrate/exr24_eu_en_2.gif
http://www.weblinks247.com/exrate/exr24_ye_en_2.gif
http://www.weblinks247.com/exrate/exr24_ca_en_2.gif
http://www.kitconet.com/charts/metals/silver/t24_ag_en_usoz_2.gif[/left]
[HR width=85%]
[font color=red font size=3][b]PIEHOLE ALERT[/b][/font]

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
[link:legitgov.org/action.html|Citizens For Legitimate
Government] [/link][/b]

[HR width=85%]

[center]
http://images.ucomics.com/comics/tmdho/2008/tmdho080326.gif
[/center]

[Demeter]

2. Thanks, Ozy!

for some reason, it's giving me a lot more trouble today than Friday


Where does the data on 30 year bond rates come from?

[ozymandius]

3. try this link for closing data

http://cbs.marketwatch.com/tools/marketsummary/default.asp?siteid=mktw

[DemReadingDU]

17. Thanks for helping out Demeter!

[Hugin]

53. Howdy! Howdy!

Morning Demeter... Looks great! :)


(Note to Ozy: Okay, I combed my hair, shaved, and put on my best Sunday-go-ta-meetn' clothes. I haven't looked like this
since the first day of Kindergarten. I'm on my bestest behavior. Oh, and this time I'll try not to 'crack the glass egg'*)











* Obscure movie reference.

[Demeter]

54. Very Obscure--But You Look Nice, Prag!

Thanks for the praise--I'm slow, but persistent.

[Hugin]

64. Good qualities...

:thumbsup:

:hi:

[Demeter]

4. Good to the Last Drop? BY BRIAN PRETTI

http://www.financialsense.com/Market/daily/friday.htm



Well, apparently good to the last drop is indeed the case when it applies to US households still “extracting” equity from residential real estate. I want to quickly roll over the recent refi stats as of year-end 2007. And this is important why? Because although many Street pundits are trying to claim that the worst is behind us in the financial markets (the bottom is in, remember?), the Fed has once again saved the world (at least for a month or two, maybe, in terms of providing just enough liquidity that has essentially forestalled financial institutions from potentially having to try to monetize the very bad paper they are holding as an alternative to currently being handed free money from the Fed), and that better days lie ahead for the economy now that the “Fed gets it,” that fact is that what lies ahead is a US consumer that has not yet weaned itself off of real estate equity as a source of household funds. At least not as of the end of the fourth quarter of 2007. Very important in terms of the forward character of US consumption. Mortgage equity withdrawal is just about to take on an entirely new meaning, trust me. And like any addict, withdrawal can be quite the painful experience. US households are about to find out just how kicking the habit feels. Let’s get right to it.

Let's quickly walk through the current residential refi data character as it also has very meaningful implications for the broader economy. I will not belabor the point as I've been through this too many times in recent years. Mortgage equity extraction has been a huge boost to household cash flows and consumer spending actions. As the nature of the convenience of taking equity out of residential real estate contracts ahead, this necessarily has important implications for broad economy wide tone and rhythm. Probably the most important data of the entire report is contained in the first three charts below. Home equity cashed out in 2007, according to the folks at Freddie Mac, was approximately $250 billion. Please remember, this is refi cash out only, not inclusive of home equity lines or actual sales of real estate for cash. Although not wildly overwhelming, this number represents about 1.8% of current nominal US GDP. At the margin, not inconsequential.



When this number is looked at as a percentage of the year over year change in household disposable personal income, it takes on a much more meaningful impact. The year over year change in nominal dollar US disposable personal income during 2007 was $565 billion. Without question, cash out refi activity referenced above continued to be quite meaningful to US households broadly last year. Let's put it this way, and without actively searching out pessimism, the fallout from the potential decline in cash out refi activity hasn't even begun to be felt as of yet. As you can see below, refi cash outs this decade have occurred in amounts very meaningful relative to the year over year change in disposable personal income. Even in the late 1990's as the credit cycle was still accelerating, 5-10% cash outs relative to disposable income at the outside was the norm. We've simply left that in the dust in the current decade. Of course the important question remains, do we ultimately revert back to levels seen in the 1990's? For the sake of US consumption, the US retailing community, and those foreign economies dependent on US consumer goods imports, let's hope not.



Finally, and it simply continues to amaze me to be honest, cash out dollars as a percentage of new refied loans in 2007 stood just shy of 26.5%. At least as of the totality of last year, the continued leveraging of US residential real estate was in full bloom. As per all anecdotes of the moment, 2008 should begin the 180 degree process as far as these trends are concerned. We'll just have to take it one quarter at a time as the cycle continues to play out....

[Demeter]

20. Economic downturn worsens in March: Payrolls, ISM should show further weakness / MarketWatch

http://www.marketwatch.com/news/story/economic-downturn-worsens-march/story.aspx?guid={EECD5640-59E6-49ED-9195-950D6F128774}&siteid=yahoomy

WASHINGTON (MarketWatch) -- Markets may be stabilizing, but the news on the economy is getting worse. The coming week will see more dismal headlines on employment, construction and manufacturing, economists said.

"The indicators on the economy will point in the direction of pronounced weakness in domestic demand," wrote Global Insight economists Nigel Gault and Brian Bethune. If the economists' forecasts are right, nonfarm payrolls are expected to decline for the third straight month in March, the unemployment rate should rise to 5% and manufacturing sentiment should slide further into recession territory. But strong export growth could keep both employment and manufacturing healthier than they usually are during recessions.

Federal Reserve Chairman Ben Bernanke will be on the Hill three times during the week, meeting first in private with lawmakers and then testifying in back-to-back appearances on Wednesday and Thursday. Treasury Secretary Henry Paulson, meanwhile, is expected to unveil the administration's "blueprint" for rewriting the nation's regulations over the financial system.

Payrolls

The employment report on Friday will be the most important economic release of the week, or the month, for that matter. For most Americans, the state and security of their job is most of what they need to know about the economy. If jobs are plentiful, incomes will tend to grow and most households will feel confident. However, if jobs are scarce, belts are tightened as anxieties rise.
Economists surveyed by MarketWatch look for a net loss of about 60,000 jobs in March, the third straight decline in nonfarm payrolls and the fourth straight loss in private-sector employment, thus "cementing the recession case," wrote Sal Guatieri, senior economist for BMO Capital Markets.
"We do not see these job cuts abating anytime soon," wrote Joseph LaVorgna, chief U.S. economist for Deutsche Bank. Profits are declining rapidly, putting more pressure on companies to cut costs, he said. In addition, job losses in construction haven't run their course yet, considering that the slump in commercial building has only begun.

[TalkingDog]

36. Holy cow!

Sending this one to the Spousal Unit (who is mortified by people using the Home Equity ATM)

[Demeter]

5. Today's Reports

Chicago PMI March

Briefing.com 46
Consensus 46.7
Prior 44.5

[Demeter]

12. Looking Ahead: The Week’s Major Economic Reports

http://www.nytimes.com/2008/03/31/business/31ahead.html?ref=business


ECONOMIC SIGNALS The main economic event of the week will be the unemployment report for March, to be released on Friday. Employment is expected to fall by 40,000 jobs.

Other reports include the Chicago purchasing managers index for March (Monday), the Institute for Supply Management’s manufacturing index for March and February construction spending (Tuesday), the Automatic Data Processing payrolls forecast, and February factory orders (Wednesday) and the I.S.M. service index (Thursday).

THE REGULATORS The Federal Reserve chairman, Ben S. Bernanke, will testify before the Joint Economic Committee of Congress (Wednesday).

The Treasury secretary, Henry M. Paulson Jr., will meet with Chinese leaders and speak at the Chinese Academy of Sciences in Beijing (Wednesday and Thursday).

Frederic S. Mishkin, a Fed governor, will speak at a dinner in New York sponsored by the Center for Economic Policy Studies at Princeton University (Thursday).

COMPANY REPORTS Reports will come from Best Buy, Micron Technology, Monsanto and Research in Motion (Wednesday); and Constellation Brands (Thursday).

ET CETERA The Agriculture Department will report farmers’ plans for planting corn, wheat and soybeans (Monday). Automakers will report March sales (Tuesday). The CTIA Wireless industry trade show takes place in Las Vegas (Tuesday through Thursday).

[UpInArms]

46. Chicago PMI March index 48.2 vs 44.5 - index improves but shows further contraction

1. Chicago PMI March index 48.2 vs 44.5
9:52 AM ET, Mar 31, 2008 - 2 minutes ago

02. Chicago PMI prices paid index 83.9 vs 79.4
9:52 AM ET, Mar 31, 2008 - 2 minutes ago

03. Chicago PMI index improves but shows further contraction
9:51 AM ET, Mar 31, 2008 - 3 minutes ago

[Demeter]

6. Oil falls on repair of Iraqi pipeline By GILLIAN WONG, Associated Press Writer

http://news.yahoo.com/s/ap/oil_prices;_ylt=AjHegrSjDLVFRyYgRwS_zvFv24cA


Oil prices fell to near $105 a barrel Monday as supply concerns eased on news that Iraq's oil exports and refining operations in the south have been restored after attacks and power outages disrupted operations.

An official from Iraq's South Oil Co. said Saturday that "everything returned to normal as of 10 p.m. Thursday" after the bombing of a key oil export pipeline in Basra earlier in the day.
Word of Thursday's attack had raised concerns that Iraqi exports would fall sharply and sent oil prices surging higher. Basra has faced fierce clashes since fighting broke out Tuesday between government security forces and Shiite militia fighters. Thursday's attack was the second pipeline bombing since the security crackdown was kicked off in Basra, which is about 550 kilometers (340 miles) southeast of Baghdad and accounts for most of Iraq's oil exports and output.

Light, sweet crude for May delivery dropped 32 cents to $105.30 a barrel in Asian electronic trading on the New York Mercantile Exchange by midafternoon in Singapore. The contract fell $1.96 to settle at $105.62 a barrel Friday.

Meanwhile, the dollar strengthened against the euro, making oil and other commodities less appealing as a hedge against inflation. A stronger dollar also makes oil more expensive to overseas investors.

Concerns about the U.S. economy also weighed on futures. The U.S. Commerce Department said Friday consumer spending edged up by just 0.1 percent last month, the poorest showing since September 2006. Energy investors worry that a cooling economy will use less fuel.

Analysts are split on oil's direction. Many think prices will rise to new records in coming months as the dollar resumes its decline. The U.S. Federal Reserve is expected to cut interest rates several more times this year, and lower interest rates tend to weaken the dollar. Many analysts say the weaker dollar has been largely responsible for oil's run to a record near $112 a barrel earlier this month.

In other Nymex trading, heating oil futures were flat at $3.105 a gallon while gasoline prices rose 0.42 cent to $2.7212 a gallon. Natural gas futures rose 6 cents to $9.86 per 1,000 cubic feet.

Brent crude futures dropped 2 cents to $103.75 a barrel on the ICE Futures exchange in London.

[54anickel]

72. Oh thank Bob! I don't know WHAT we'd do without all those gazillion

barrel of oil that come out of Iraq. :eyes:

Another headline drawing attention away from the real cause...

...The U.S. Federal Reserve is expected to cut interest rates several more times this year, and lower interest rates tend to weaken the dollar. Many analysts say the weaker dollar has been largely responsible for oil's run to a record near $112 a barrel earlier this month.

Lookie over there!!!

[Demeter]

7. Treasury set to announce regulatory overhaul

http://news.yahoo.com/s/nm/20080331/bs_nm/usa_economy_regulation_dc_1;_ylt=AnYgVMKhIFDqBd1kpqLFoE2b.HQA


Treasury Secretary Henry Paulson will reveal in full sweeping new plans on Monday for streamlining a hodgepodge of regulation faulted for permitting the U.S. mortgage crisis to balloon into a full-blown economic threat.

Keenly aware of the political debate already mounting as soaring home foreclosures push the economy toward recession, the Bush administration allowed the veil to be lifted on key measures before Paulson's announcement at 10:00 a.m EDT.

The regulatory blueprint proposes vesting new powers as a "market stability regulator" in the Federal Reserve -- effectively formalizing a role it already has been performing by providing liquidity to investment banks and lowering official interest rates.

It would give the U.S. central bank authority to demand that all financial system participants supply it with full information on their activities and grant the Fed a right to collaborate with other regulators in setting rules for their behavior.

MERGE WATCHDOGS?

Among changes, Treasury wants to merge the Securities and Exchange Commission, the U.S. markets watchdog, with the Commodity Futures Trading Commission that is charged with overseeing the activities of the nation's futures market.

It also recommends getting rid of a Depression-era charter for thrifts that was intended to make it easier to obtain mortgage loans, saying it is no longer necessary. That would mean closing the Office of Thrift Supervision and transferring its duties to the Office of the Comptroller of the Currency that oversees national banks.

In one important change to try to clamp down on mortgage brokers, Treasury is urging the establishment of a "Mortgage Origination Commission" made up of regulatory agency representatives that would be able to set licensing standards for mortgage brokers.

That would boost consumer protection by increasing scrutiny of the personal conduct, disciplinary history and educational qualifications of the people who are frequently on the lending front lines.

[Demeter]

25. Paulson's Cosmetic, Cynical Financial Regulation "Reform"

http://www.nakedcapitalism.com/2008/03/paulsons-cosmetic-cynical-financial.html

Why is it that the media feels compelled to take pronouncements from government officials more or less at face value? By now, they ought to know that if someone from the Bush Administration is moving his lips, odds are it's a lie...Today's object lesson is the so-called financial services regulatory reform plan announced by Treasury Secretary Hank Paulson. Both the Journal and Times treat his proposals as significant. Their headlines, respectively: "Sweeping Changes in Paulson Plan," and "Treasury’s Plan Would Give Fed Wide New Power." There is less here than meets the eye, and what is here is guaranteed not to be implemented during the remaining months of the Bush presidency. And that of course is precisely the point of this exercise. Appear to be doing something and dump the mess in the lap of your successor.

To the details. Remember where we are: we've had years of misguided confidence that investment banks could be left to their own devices, that the wonders of the originate-and-distribute model meant Things Were Different This Time. Specifically, the powers that be believed that risks were so widely spread and diversified that the financial system was now much more resistant to systemic shocks. We've seen what a crock that idea was. So although no one has come up with a detailed reform plan, it's clear that the old model is badly tarnished. Since we have demonstrated that losses from investment banking risk-taking will be socialized, curbs need to be put on them. Otherwise, the very presence of a put to the government will guarantee untoward speculation and poor allocation of capital. In addition, continued taxpayer funded rescues of institutions with egregiously well-paid staff would eventually result in bankers' heads on pikes.

A number of ideas have been proposed: tougher capital requirements; restrictions on the use of off-balance sheet entities; driving more trading on to exchanges; limiting the risk-taking of institutions that are big enough to be systemically important (say allowing them to risk only a certain portion of capital in hard-to-value, volatile, or illiquid products); pro-cyclical capital charges; addressing poor incentives; improving transparency and disclosure.

But would any of the measures proposed by Paulson have prevented our crisis-in-motion? No.

What Paulson offered up instead what a plan for some consolidation of financial services industry regulatory oversight. This isn't useless; it would help prevent regulatory/supervisory arbitrage and allow for more consistent implementation of any new regulation. But to pretend that bureaucratic consolidation is tantamount to reform is dishonest...In reality, the biggest single culprit was a lack of willingness of major regulators, in particular the Fed, to intervene in a securitization process that, as long as it beefed up housing prices, was seen to be virtuous. A secondary factor was that the Federal government, largely through favorable court rulings, has for the most part stripped states of the power to regulate financial services firms. Yet many states have been far more aggressively pro-consumer than the Feds; usury laws, now gutted, existed only at the state level, as did the tougher versions of predatory lending laws. Ironically, had the states been more in the driver's seat (which is a less rather than more consolidated regulatory approach), the mortgage crisis might have been severely blunted (it might not have been attractive to design and market the more aggressive subprime products if they would have been permissible only in certain states). But the Federal government has long had a regulatory bias that favors industry profits over consumer protection.


"Market stability regulator" is a dangerous bit of Newspeak. This is code for the fact that the Fed's role as chief bailout agency will be formalized. And when Japanese regulators there spoke about promoting market stability, that meant protecting industry incumbents, usually by somehow limiting competition and therefore improving profits.

And this program sounds as if it is replacing a hodgepodge now fractured by type of institution (thrifts vs. national banks vs. securities firms) with a smaller number of regulators that will be fragmented functionally. The idea of the Business Regulatory Agency is utter hogwash. How do you oversee business conduct separate and apart from supervisor audits? This agency is bound to be toothless, which is probably the point. And if I read this correctly, we will have the new Prudential Financial Regulatory Agency and the Fed (n the cases of banks with significant trading operations)regulating the same institution, which can lead to either overlapping mandates (which generates conflicts) or supervisory gaps.

In other words, this isn't even rearranging the deck chairs on the Titanic; it's keeping the ship on full throttle with a only slight change in course.

[donkeyotay]

84. Irony is not dead on the SMW, so I thought you might enjoy meeting Mr. Risk

From Businessweek, JUNE 12, 2006
Mr. Risk Goes To Washington
Hank Paulson's profound understanding of risk and reward makes him the perfect pick for the Treasury

snip>

The appointment of Paulson, Mr. Risk, as Treasury Secretary is at once ironic and completely appropriate. According to conventional economic wisdom, the single biggest problem the U.S. faces is a massive accumulation of debt. Both liberal and conservative economists warn that the bulging trade deficit, now roughly 6% of gross domestic product, poses a danger of sending the dollar plunging and causing a financial meltdown. The federal budget deficit for 2006 will hit at least $300 billion. And current projections call for Social Security and Medicare to run up enormous deficits in the long run.

Yet Goldman actually has leveraged up faster than the U.S. government in recent years. In 1999, Goldman had about $1.60 in long-term debt for every dollar in net revenue. In the same year, the federal government had $3.10 in debt, mostly long-term, for every dollar in revenue. Today the government has about $3.70; Goldman, around $4.

Clearly, Paulson isn't scared by debt and risk-taking. That might make him the ideal person to grapple with the U.S. economic and fiscal situation, which is more similar to Goldman's than most economists will admit. Facing intense competition from around the world, the only way the American economy can thrive is through risk-taking. Indeed, some economists have characterized the U.S. as a giant venture capital fund that sucks in money from overseas and invests it in high-risk, high-return projects.

http://www.businessweek.com/magazine/content/06_24/b3988001.htm?chan=search


:rofl: :eyes:

[Demeter]

90. Quite an Archeological Find There! Good Job, Donkeyotay!

[Demeter]

8. Housing secretary to resign

http://news.yahoo.com/s/nm/20080331/bs_nm/usa_economy_housing_dc_1;_ylt=AoL1ojOSZC6QKrL0FODAOFub.HQA

The U.S. housing secretary will resign Monday morning under pressure after accusations of improper allocation of federal contracts, the Wall Street Journal reported in its Monday edition.

Housing and Urban Development Secretary Alphonso Jackson will step down on Monday morning, the paper reported. The department announced late Sunday that Jackson will make a statement to the press on Monday morning.

Jackson has faced calls for his resignation after lawmakers have said he behaved improperly in awarding federal contracts.

The Federal Housing Administration, overseen by HUD, runs the largest government program to aid home buyers and is seen by many lawmakers as the key to a federal effort to stem foreclosures.

[Demeter]

15. US federal home loan banks get $100B in extra mortgage-buying power to ease credit crunch

http://www.iht.com/articles/ap/2008/03/24/business/NA-FIN-US-Credit-Crunch-Home-Loan-Banks.php


WASHINGTON: The Federal Home Loan Bank system can increase purchases of Fannie Mae and Freddie Mac securities by $100 billion over two years in the latest government effort to stabilize the devastated market for mortgage-backed assets.

The 12 regional banks in the system can up purchases of securities issued by the two government-sponsored companies to 600 percent of capital from 300 percent, the Federal Housing Finance Board, which oversees the banks, said Monday.

The aim is to inject liquidity into a market that has seized up amid a global credit crunch sparked by the U.S. housing market downturn...Created by Congress during the Depression, the self-funded home loan bank system has some 8,100 members around the U.S.: banks, savings and loans, and credit unions. Eight of every 10 U.S. financial institutions belongs to the home loan bank system.

It was the third step the government has taken in recent weeks to allow Fannie and Freddie to shoulder larger burdens in the mortgage market despite their multibillion-dollar losses last quarter and expectations of further red ink this year.

[Demeter]

29. Good News for ARM Mortgagees

DailyReckoning.com

According to a Bloomberg report, the Fed’s efforts to loosen credit really have done the job. Mortgage resets have been much less of a problem than anticipated – because the resets are linked to Libor, which has been pushed down by central bank action.

Of course, people are still losing their homes in record numbers – but it’s not necessarily because of the mortgage resets.

Also, the feds are looking at various plans to bail out homeowners in advance of the upcoming elections. Neither party wants long lines of angry, homeless voters lining up at the polls in November.

[Demeter]

31. For an Opposing View: Bloomberg Pronounces Hope for Subprimes Based on Single Deal

http://www.nakedcapitalism.com/2008/03/bloomberg-pronounces-hope-for-subprimes.html

From Bloomberg:

"Unfortunately, most of the defaults and foreclosures that have wreaked havoc in financial markets haven't been due to resets so far. Many borrowers simply bought a house or condo they couldn't afford unless bailed out by rising prices, and lower rates alone won't help them much.

Still, the big drop in Libor means there likely will be many fewer foreclosures than there would have been....

A new report, ``Understanding the Securitization of Subprime Mortgage Credit,'' by economists Adam B. Ashcraft and Til Schuermann of the New York Federal Reserve Bank, published this month, provides a wealth of detail about subprime mortgages. Much of its information is based on a pool of such mortgage-backed securities issued by New Century Financial in June 2006.

All but 12 percent of the loans in the pool were ARMs, either the so-called 2/28 or 3/27 variety. That is, they carried a fixed-initial rate for two or three years, respectively, so the former will first reset in June.

The average initial rate for the loans was 8.64 percent, set when the six-month Libor was 5.31 percent, according to the report. It was a teaser rate in the sense that once resets began, the interest rate would be based on Libor plus a spread of 6.22 percentage points."
..................

Now the interesting thing is that the authors of the paper stress that they investigated only one pool used to illustrate how subprimes work and to try to understand how the product turned out to work so badly. The abstract and executive summary make no reference to the economics of subprimes. The abstract:

In this paper, we provide an overview of the subprime mortgage securitization process and the seven key informational frictions that arise. We discuss the ways that market participants work to minimize these frictions and speculate on how this process broke down. We continue with a complete picture of the subprime borrower and the subprime loan, discussing both predatory borrowing and predatory lending. We present the key structural features of a typical subprime securitization, document how rating agencies assign credit ratings to mortgage-backed securities, and outline how these agencies monitor the performance of mortgage pools over time. Throughout the paper, we draw upon the example of a mortgage pool securitized by New Century Financial during 2006

Fed economists no doubt would know better than to use on one pool of MBS issued by one issuer in one month for an economic when there are vastly more comprehensive data sources that are designed for precisely that sort of analysis. And a quick look at one suggests that Berry's conclusions are quite a stretch.

The American CoreLogic databases as of March 2007 contained 38 million mortgages. Their extraordinarily detailed analysis of 8.4 million ARMS originated between 2004 and 2006 showed only 9.1 % with initial interest rates of 8.5% or higher (note that the paper claims an average of 8.64%) There were more mortgages ate 2% and below (1,1 million) than above 8.5% (770 thousand). Without throwing in the intermediate levels, it's obvious that the weighted average is well below 8.64% (the level in the New Century pool, which gave Berry the notion that there wouldn't be much reset shock). Similarly, a March 2007 (admittedly now dated) paper by Chris Cagan deemed ARMs with initial rates of 6.5% or higher as not-very-vulnerable to reset shock.
ARMs with low introductory rates were never intended to reset; the assumption was that the would refinance. And recent pools are running at unheard-of rates before reset, with monthly default rates of 3.5%, which equates to a 34.8% cumulative default rate over three years. Thus the performance of later subprimes is horrendous independent of the issue of resets.

Finally, while Libor was a popular index for setting the reset rate, it's far from the only benchmark. Others include the 11th District Cost of Funds rate, the Prime rate, the Monthly Treasury Average rate, the Constant Maturity Treasury rate. And some of these have not been affected by the Fed's cuts...Note that while prime has fallen, its level is not much below what it was in 2005 and 2006, which were the heaviest years for origination of dubious subprimes (while the 2007 vintage is worse in terms of quality, the volume issues was lower than in the two preceding years)

[MilesColtrane]

45. How will Bush be able to fulfill his bald fetish now?

Will he hand Condi an Atra and an ultimatum?

[Demeter]

9. Wall Street sees steeper decline in Q1 results

http://news.yahoo.com/s/nm/20080331/bs_nm/companies_dc_1;_ylt=As7KmsXIRPOexmBt76seTpmb.HQA


Wall Street analysts have cut their first-quarter earnings forecasts for U.S. companies and are now projecting a sharper decline, figures from Reuters Estimates showed on Monday.

Earnings for Standard & Poor's 500 companies are now expected to fall 8.1 percent in the first quarter, compared with the 5.5 percent decline projected last week.

At the beginning of the quarter, analysts projected 4.7 percent earnings growth during the period.

The worsening global credit crisis has significantly damaged the outlook for many major U.S. companies, particularly in the finance sector.

Financial companies are expected to take the hardest hit, with Reuters Estimates predicting the sector will suffer a 49 percent decline in quarterly earnings.

Consumer companies are expected to see their earnings decline 10 percent, as consumers continue to be pinched by rising food and energy costs and declining home values.

The overall projected rate combines figures for companies that have reported with estimates for companies that haven't.

The energy and technology sectors are expected to post the healthiest results for the quarter, with respective gains of 33 percent and 12 percent, according to Reuters (RTR.L) Estimates.

The challenging environment has led most companies to issue negative outlooks for the upcoming quarter. According to Reuters Estimates, companies have reported 242 negative outlooks, compared with just 169 positive forecasts.

[54anickel]

79. SEC Gives Permission to Fudge Mark-to-Market

http://www.nakedcapitalism.com/2008/03/sec-gives-permission-to-fudge-mark-to.html

The US is acting more and more like a banana republic with every passing day. One of the characteristics of a banana republic is that it puts out flattering-to-the-point-of-being-unreliable data about its economy and important institutions.

Alert reader James Bianco pinged us about a new SEC release today and Floyd Norris of the New York Times' commentary on it, "If Market Prices Are Too Low, Ignore Them," Norris, who is usually pretty understated, disapproved of one of the items in the SEC letter, as do we.

Most readers probably know that accounting rule FAS 157 became effective as of January 1 of this year. It requires companies, subject to certain restrictions, to classify financial assets as Level 1 (easily valued by reference to market prices), Level 2 (doesn't trade actively, but similar enough to actively traded assets that can be valued in relationship) and Level 3 (known in the trade as "mark to model" or "mark to make believe"). Some financial firms opted to comply with FAS 157 early, which led to quite a few investment banks revealing that the value of their Level 3 assets exceeded their net worth.

In the last couple of months, there has been increased worry that mark-to-market accounting leads to the operation of a destructive "financial accelerator." As prevailing values go down, banks have to lower the value of their holdings. This leads to a direct hit to their net worth, which will lead them to contract their balance sheets, either by withholding credit or selling assets. More sales in a weak market lead to further declines in the prices of financial instruments, leading to more writedowns and sales of inventory.

Funny how no one had a problem with mark-to-market when asset prices were rising. The process in reverse leads to mark-to-market gains, higher net worths fueling balance sheet growth and credit expansion, which led to more demand for financial assets. That gives you higher securities prices which least to more mark-to-market gains. Sounds like a bubble, doesn't it?

The SEC's solution for the contractionary version of this dynamic is simple: ignore those market prices if they are too ugly. From the release:

Fair value assumes the exchange of assets or liabilities in orderly transactions. Under SFAS 157, it is appropriate for you to consider actual market prices, or observable inputs, even when the market is less liquid than historical market volumes, unless those prices are the result of a forced liquidation or distress sale (boldface ours).

more...


http://ftalphaville.ft.com/blog/2008/03/31/11928/marking-to-moral-hazard/

Marking to Moral Hazard

More writedowns ahead for the big banks? A spate of negative analyst’s reports - led by none other than Oppenheimer’s Meredith Whitney - would have you believe so. But what about this:

Under SFAS 157, it is appropriate for you to consider actual market prices, or observable inputs, even when the market is less liquid than historical market volumes, unless those prices are the result of a forced liquidation or distress sale. Only when actual market prices, or relevant observable inputs, are not available is it appropriate for you to use unobservable inputs which reflect your assumptions of what market participants would use in pricing the asset or liability.

“This” is a letter sent by the SEC to Wall Street CFOs last week in anticipation of the next round of 10-Qs
.
The distress sale caveat looks like an escape clause. Having required Wall Street to mark most of their structured finance models to model - as “level-3″ assets under SFAS 157 - the SEC is now inviting banks just to ignore their model when it suits them.

To wit: if asset prices fall too much, just ignore the price falls. In fact, create, buy or hold, whatever structured rubbish you like in the future because it doesn’t have to lose its value if you don’t want it to.

If the price isn’t right, just tweak and add “benefits” to your model to compensate for the effects of “distressed pricing”.

http://ftalphaville.ft.com/blog/2008/02/12/10866/did-aig-mark-to-myth/">That is exactly what AIG did - and would have gotten away with doing, had it had a letter like this to wave.

[Robbien]

85. So that is why financial stock market is doing so well these days

Their real situation isn't any better, they just don't have to say how bad it is. Ignore reality.

It is hard to believe these are the times we are living in.

[Demeter]

10. U.S. car companies go back to black By David Bailey / Reuters

http://www.earthtimes.org/articles/show/195433,us-car-companies-go-back-to-black.html


DETROIT (Reuters) - Henry Ford, who created the automotive industry's first mass-market hit with the Model T a century ago, was a proponent of radical simplicity. In fact, Ford became famous for saying his customers could have the $825 Model T in any color -- so long as it was black.
In the century since the first Model T in 1908, Ford's vision of top-down efficiency has been swamped by thousands of feature and color combinations on new cars, trucks and SUVs.
The result, executives say, has been higher production and inventory costs and headaches for customers and dealers in sorting through a complex matrix of choices.

Now, Ford Motor Co and other embattled U.S. automakers are going back to black, embracing thespirit of Ford's notion in response to mounting losses and the risk of a deeper downturn in the United States, the world's largest market for new cars, in 2008.

Ford Chief Executive Alan Mulally said he was amazed by the number of variations Ford offered when he arrived at the No. 2 U.S. automaker from Boeing Co in 2006. "I was looking at the (Lincoln) Navigator console," Mulally said. "We have 128 different options you could choose on the console. That's just the console." With so many variations, a customer inevitably will want a vehicle that is not in stock, leading to a frustrated customer and pressure on the dealer to offer a discount, Mulally said. "They are unhappy and we are losing money," he said of Ford, which posted losses of $2.7 billion in 2007 and $12.6 billion in 2006.

Ford's chief of marketing, Jim Farley, who was hired away from Toyota Motor Co <7203.T> last year, said he was stunned to find that Ford was offering 100,000 combinations of options on its entry-level Focus sedan. Some 80 percent of Ford's sales came from just 4,000 of those combinations, he said. In response, Ford has cut complexity by reducing the number of "buildable combinations" of the 2008 Focus by 99 percent. On the 2008 Expedition, it has cut combinations by 95 percent.
"Coming from Toyota, I can tell you that the opportunity is there to reduce the complexity of our line-up," Farley told analysts recently.

It's a similar story at Chrysler LLC, where sales chief Jim Press -- another high-level defection from Toyota -- has also pushed the struggling automaker to simplify. "Previously, we offered too many options," Chrysler Chief Executive Bob Nardelli told reporters. "That resulted in too much complexity in the plants that build them, too much confusion for the dealers who order them and no added value to the customers who buy them." Nardelli said Chrysler had cut ordering complexity by 93 percent over the past two years by dropping some options and repackaging others. Chrysler, which lost $1.6 billion last year, plans to go further, cutting models and trimming dealers. That represents a stepped-up restructuring under Cerberus Capital Management LP, which bought an 80 percent stake in the automaker in 2007.

LESS IS MORE

General Motors Corp is also paring variations to cut costs and expects to have the vast majority of vehicles on shared global platforms within two years, said Jon Lauckner, GM's vice president of global program management. "It has tremendous advantages," he said. "Obviously we are going to leverage one of our strengths, which is our scale." GM, the largest U.S. carmaker, increasingly markets vehicles made on common platforms under different names in markets around the world with only minor changes, a process that saves money that can be rolled into product development. The first GM vehicle with the global architecture -- the Opel Vectra -- will debut at the London auto show and will be on the road in the fall. The next GM vehicles to be built with the global structure will be small cars from the automaker's Korean affiliate Daewoo, Lauckner said.

[Demeter]

11. A Nervous Wall St. Seems Unsure What’s Next By JULIE CRESWELL NYT

http://www.nytimes.com/2008/03/31/business/31credit-1.html?ref=business


Most everyone on Wall Street, and on Main Street, wants to know when will the financial crisis end. So far, despite the government’s efforts, the markets are whispering an answer that no one wants to hear... the proposals from the Treasury to change financial regulation, which critics say are long overdue and do not go far enough, are aimed at the future and do not address the current turmoil.
The debate in Washington over what to do is entering a new phase, with more calls for broad help for homeowners to help prevent what some fear could be a severe recession.

On Wall Street, it has been a grim first quarter. And in the next few weeks, big banking companies like Citigroup are expected to write down the already shrunken value of mortgage-linked investments further, sapping quarterly profit...The average diversified stock mutual fund has fallen 10.3 percent so far this year — the worst quarterly showing in five years, according to analysts at Morningstar in Chicago. For some people, such reduced assets seem to sting even more as they confront the deepening housing slump.


..while the Fed is easing credit, the markets are reluctant to follow suit. Banks are hoarding cash and are wary about lending money, even to one another. Part of the banks’ unwillingness to lend reflects their own weakened condition, analysts say. As a result, mortgage rates remain higher than they might be, at around 5.9 percent for a 30-year loan. The rate at which banks borrow money from other banks in the London market, a widely used reference rate for short-term loans, rose to 4.47 percent on Friday, its highest level since December.

Bond investors, the linchpins of the credit markets, are on edge, too. Many want to buy only the safest debt. Investors are demanding a premium of about 1.8 percentage points over United States Treasuries on mortgage bonds guaranteed by Fannie Mae, the giant mortgage business. While that spread — a measure of the risk that investors perceive in the Fannie Mae bonds — has narrowed since early in the month, it is up sharply from a year ago.

“Banks’ appetite for risk has totally disappeared,” said Peter Gumbel, a mortgage broker in Greenwich, Conn. “Regardless of how much the Fed lowers rates, banks just can’t price in enough of a premium to want to take a risk on some loans.”


Nor have the Fed’s moves squashed market rumors that another Wall Street firm, Lehman Brothers, could face the kind of bank run that toppled Bear Stearns. On Thursday, Lehman felt compelled to issue a statement calling the rumors “totally unfounded.” It blamed individuals or funds that had sold its stock short, which would result in a profit if the stock fell. At least one Wall Street analyst argued that fears about Lehman running out of cash were overblown, pointing to the firm’s war chest of $34 billion and access to funds from the Fed. The analyst, Prashant A. Bhatia of Citigroup, said in a research report Friday, “It’s tough to have a liquidity-driven meltdown when you’re being backed by government entities that have the ability to print money.”

[Wednesdays]

78. Just in time for the Boomers' retirement

The average diversified stock mutual fund has fallen 10.3 percent so far this year — the worst quarterly showing in five years...

With mutual fund 401(k)'s replacing pensions as the typical retirement vehicle, this stock market bust couldn't come at a worse time...the first of the Baby Boomers will be in retirement age within just a couple more years. What are they gonna do? The way it's going, there will no longer be such a thing as "retirement". :(

[llmart]

89. I've often maintained......

that us boomers have gotten the short end of the stick for a very long time in many ways because there are so many of us. When they first trotted out 401K's as the answer to everyone's retirement prayers and slowly did away with defined benefit plans I said, "How could anyone believe that investing their money on their own would be better for most people than a regular pension check that you can rely on until the day you die?" But the media jumped on the bandwagon to brainwash people into thinking that they could make a killing if they only did their own investing. Yeah, right. Like the average Joe Blow in America is that savvy.

And of course for quite some time now the media has been trying to brainwash boomers into believing that it will be good for them if they continue working until they drop.

It started with Raygun and we're still being boondoggled with this crap.

[TrogL]

86. What financial crisis?

:sarcasm:

They are setting it up so the roof caves in the day a Democratic President whom they will blame for the perfect storm caused by years of Republican fascism.

[Demeter]

13. Finding Health Insurance if You Are Self-Employed By MARCI ALBOHER

http://www.nytimes.com/2008/03/27/business/smallbusiness/27sbiz.html?ref=smallbusiness

If there is one thing that separates the self-employed from those employed by others, it is their preoccupation with health insurance...A 43-year-old woman wrote about going without insurance in the first year of her business. “I lived in terror of needing a doctor visit or worse yet, lab tests or something more,” she said. She then moved to an H.M.O. for sole proprietors through a local chamber of commerce. The cost of that plan, which she said was $171 a month in 2001, has now risen to $500 a month. At the same time, she wrote, co-payments have increased and services have been cut.

That woman’s experience reflected the exasperated tone of several of the other writers. Many entrepreneurs seem to find health insurance after doing a lot of research, though they generally pay more than they think they should. Some who are in good health bet on remaining that way and forgo health insurance or get policies with low premiums and high deductibles, choosing to insure themselves for mostly catastrophic illness. Some are lucky enough to have a well-insured partner.

The unluckiest are those with chronic illnesses or the dreaded pre-existing condition that results in a denial of coverage. Many of these people abandon dreams of entrepreneurship altogether because they need jobs that come with a health plan and they cannot find a way to self-insure.

The comments also revealed that the health care system is a state-by-state patchwork, with options varying based on where you live. A 60-year-old owner of a mail order business from Illinois wrote that she was unable to get insurance until about 10 years ago when Illinois started a high-risk pool with Blue Cross Blue Shield...There were reports from Americans happily insured while living in Europe and Canada. And, of course, there were numerous pleas to Washington.

Jennifer Jaff, a reader who happens to be an expert on health insurance issues, shared a valuable tool, healthinsuranceinfo.net. The site, maintained by the Georgetown Health Policy Institute, shows a map of the country and after clicking on a state, a document is downloaded that covers everything from what kinds of programs are available to small-business owners to whether there is a high-risk pool available for those who have been rejected by insurance providers. These primers are comprehensive and frequently updated, and they are a great place to start, especially if you have been wondering about the meaning of jargon that peppers insurance providers’ descriptions of their offerings.

Many readers shared recommendations based on where they buy their insurance. Popular sources were local chambers of commerce, the Small Business Service Bureau (sbsb.com), AARP (aarp.org) (for those over 50), industry-specific trade associations like a bar association or the Institute of Electrical and Electronics Engineers. In states that permit it, small-business owners can also start a group with as little as one member. In that case, a good insurance agent comes in handy.

For the reasonably healthy who know what they are looking for, ehealthinsurance.com got fairly good reviews. The site, which has the feel of an Expedia or Orbitz for purchasing health insurance, allows you to compare a variety of policies offered through about 70 insurance providers. One caveat, pointed out by several readers, is that ehealthinsurance.com does not serve consumers in all states. Rhode Island, Vermont, Massachusetts, Maine and North Dakota are excluded. The company also covers only individuals. So if your company has employees, you will need to explore other options, like starting a group if your state permits that.

Another possibility for consultants and independent workers is the Freelancers Union, which won consistently good reviews in the reader comments. But the union also has some limitations. It operates in only 30 states, and you have to work in one of the industries or occupations it serves.

[Tansy_Gold]

91. Good information, since as of 04/01/08, I am uninsured . . .

. . . . and self-(under)employed.

Tansy Gold, don't even get me started. . . . . .. :grr:

[Demeter]

93. I've Had to Cope Since the Divorce in 93

No way I could hold a real job and care for autistic child at same time.

[Demeter]

14. Lehman hit by $355 mln fraud, blames Marubeni-source

http://news.yahoo.com/s/nm/20080330/bs_nm/marubeni_fraud_dc_4

Lehman Brothers (LEH.N) was fleeced out of more than $355 million in a fraud the U.S. investment bank believes was perpetrated by two employees at Japanese trading house Marubeni Corp. (8002.T), according to a person briefed on the matter.

The fraud may have hit other financial institutions as well, according to the source, who spoke on condition of anonymity.

If Lehman's arguments are true, the scamsters perpetrated one of the more sophisticated corporate con jobs since Enron set up a fake trading floor to impress analysts. Lehman believes the scam included forged documents and an imposter.

Lehman is trying to recover a loan to a fund headed by Asclepius Ltd -- a now-bankrupt unit of LTT Bio-Pharma Co (4566.T). Lehman had believed the money, supposedly to be used to finance medical leases, was backed by Marubeni.

[MattSh]

63. Fraud? Or business as usual?

Business as usual, I thinks....

[Demeter]

16. The Fed is just an Extension of the Banking Establishment; The Bear bailout proves it / Mike Whitney

http://www.informationclearinghouse.info/article19572.htm

19/03/08 "ICH" -- - One picture tells the whole story. It's a photo of five grim looking men in gray suits staring ahead blankly like they were in the dock with Saddam awaiting sentencing. Every one of them looks downcast and dejected; shoulders rounded and jaws set. This is what desperation looks like, which is why the photo was kept off the front pages of our leading newspapers.
The group took no questions and, as far as the media was concerned, the meeting never happened. But it did happen; and it happened on Monday at the White House at 2PM. That's when President Bush convened the Working Group on Financial Markets, also known as the Plunge Protection Team, to explain their strategy for dealing with deteriorating conditions in the financial markets. The details of the meeting remain unknown, but judging by the sudden (and irrational) recovery in the stock market yesterday; their plan must have succeeded.

The Plunge Protection Team is a panel that includes Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson, Securities and Exchange Commission Chairman Christopher Cox, and acting Commodity Futures Trading Commission head Walter Lukken. According to John Crudele of the New York Post, the Plunge Protection Team’s (PPT) objective is to redirect the stock market by “buying market averages in the futures market, thus stabilizing the market as a whole.” In the event of a terrorist attack or a natural disaster, the group's activities could play an extremely positive role in saving the market from an unnecessary meltdown. However, direct intervention into supposedly “free markets” is less defensible when it is merely a matter of saving an over-leveraged banking system from its inevitable Day of Reckoning. And, yet, that appears to be the reason for the White House confab.

The psychology behind the PPT's activities are explained in greater detail by Robert McHugh Ph.D. who provides a description of how it works in his essay “The Plunge Protection Team Indicator”:

“The PPT decides markets need intervention, a decline needs to be stopped, or the risks associated with political events that could be perceived by markets as highly negative and cause a decline, need to be prevented by a rally already in flight. To get that rally, the PPT’s key component -- the Fed -- lends money to surrogates who will take that fresh electronically printed cash and buy markets through some large unknown buyer’s account. That buying comes out of the blue at a time when short interest is high. The unexpected rally strikes blood, and fear overcomes those who were betting the market would drop. These shorts need to cover, need to buy the very stocks they had agreed to sell (without owning them) at today’s prices in anticipation they could buy them in the future at much lower prices and pocket the difference. Seeing those stocks rally above their committed selling price, the shorts are forced to buy -- and buy they do. Thus, those most pessimistic about the equity market end up buying equities like mad, fueling the rally that the PPT started. Bingo, a huge turnaround rally is well underway, and sidelines money from Hedge Funds, Mutual funds and individuals’ rushes in to join in the buying madness for several days and weeks as the rally gathers a life of its own. (Robert McHugh Ph.D., “The Plunge Protection Team Indicator”)
...The powers of the PPT are greatly exaggerated; eventually the liquidity they provide has to be drained from the system. The popular myth that the Fed simply creates as much money as it chooses and spreads it around wherever it likes; is pure rubbish. The Fed has very defined balance constraints. The system is not quite as rigged as many people imagine. According to Bloomberg News, the Fed has already depleted most of its arsenal:

“The Fed has committed as much as 60 percent of the $709 billion in Treasury securities on its balance sheet to providing liquidity and opened the door to more with yesterday's decision to become a lender of last resort for the biggest Wall Street dealers.” (“Bernanke May Run Low on Ammunition for Loans, Rates”, Bloomberg)

The troubles in the credit markets and real estate are bigger than the Fed or the PPT; and they know it. The next step is massive government intervention; rate freezes, bailouts and fiscal stimulus. Big government is back; Reaganism has gone full-circle. That doesn't mean that the PPT cannot have an important psychological affect in soothing jittery markets and stalling a system-wide collapse. It just means, that markets will eventually correct regardless of what anyone does. The sharp downturn in the financial markets is the result of unsustainable credit expansion that can't be fixed by the parlor tricks of the PPT. The rate at which financial institutions are deleveraging and destroying capital will inevitably trigger an economic crisis equal to the Great Depression. What is needed is strong leadership and a re-commitment to transparency, rather than the “business as usual” deception of the public that keeps the balls in the air for another day or two.

This may sound like technical gibberish geared for market junkies, but it is critical to understanding the gravity of what is really going on. The Fed's rate cuts are not affecting the lending between banks which is actually deteriorating quite rapidly. And, when banks don't lend to each other (because they are worried about getting their money back) the wheels of capitalism grind to a halt. The banks are the essential conduit for providing credit to the broader economy, so there must be traffic between the major lending institutions. The banks are hoarding cash to cover losses on their steadily downgraded mortgage-backed assets and to shore up their skimpy capital reserves. As a result, consumer spending will slow, housing will continue to falter, business will contract and GDP will shrink...Paulson is clearly out of his depth. He's just not the man to deal with a crisis of this magnitude. His only interest is bailing out his friends in the banking industry. The interests of workers and consumers are just brushed aside. Has anyone from the Dept of the Treasury (or the Fed) suggested a bailout for the 14,000 Bear Stearns employees who lost not only their jobs but the entire retirement when the company was purchased by JP Morgan?

Of course, not. Because both Paulson and Bernanke take a class oriented approach to the problem that narrows their range of vision and limits their ability to pose viable remedies. They are unable to see the whole playing field. For example, Bernanke assumes that if he keeps cutting rates, he can reflate the equity bubble by reenergizing consumer spending. But that won't happen. First of all, the banks are not passing on the savings to customers. And, second, the banks are only lending to applicants with a flawless credit history. In other words, the Fed's cuts may be good for Bernanke and Paulson's buddies, but they do nothing for either the consumer or the broader economy. Also, as Michael Hudson notes in his latest article “Save the Economy, Dismantle the Empire” (counterpunch.org) the banks are making no attempt to stimulate the economy, but simply turn a profit with capital borrowed from the Fed:

“This week the Fed tried to reverse the plunge in asset prices by flooding the banking system with $200 billion of credit. Banks were allowed to turn their bad mortgage loans and other loans over to the Federal Reserve at par value (rather at just 20% "mark to market" prices). The Fed's cover story is that this infusion will enable the banks to resume lending to "get the economy moving again." But the banks are using the money to bet against the dollar. They are borrowing from the Fed at a low interest rate, and buying foreign euro-denominated bonds yielding a higher interest rate--and in the process, making a currency gain as the euro rises against dollar-denominated assets. The Fed thus is subsidizing capital flight, exacerbating inflation by making the price of imports (headed by oil and other raw materials) more expensive. These commodities are not more expensive to European buyers, but only to buyers paying in depreciated dollars.”

[Demeter]

19. Reviving the R.T.C. The Next Big Plan From The Bernanke Politburo By Mike Whitney

http://www.informationclearinghouse.info/article19632.htm

The Federal Reserve is presently considering an emergency operation that is so risky it could send the dollar slip-sliding over the cliff. The story appeared in the Financial Times earlier this week and claimed that the Fed was examining the feasibility of buying back hundreds of billions of dollars of mortgage-backed securities (MBS) with public money to restore investor confidence and clear the struggling banks' balance sheets. The Fed, of course, denied the allegations, but the rumors abound. Currently the banking system is so clogged with exotic investments, for which there is no market, they can't perform their main task of providing credit to businesses and consumers. Bernanke's job is to clear the credit logjam so the broader economy can begin to grow again. So far, he has failed to achieve his objectives.

Since September, Bernanke has slashed interest rates by 3 percent and opened various auction facilities (Term Securities Lending Facility, the Term Auction Facility, the Primary Dealer Credit Facility, and the new Term Securities Lending Facility) which have made $400 billion available in low-interest loans to banks and non banks. He has also accepted a “wide range” of collateral for Fed repos including mortgage-backed securities and collateralized debt obligations (CDOs) which are worth considerably less than what the Fed is offering in exchange. But the Fed's injections of liquidity have not solved the basic problem which is the fall in housing prices and the persistent downgrading of mortgage-backed assets that investors refuse to buy at any price. In fact, the troubles are gradually getting worse and spreading to areas of the financial markets that were previously thought to be risk-free. The credit slowdown has also put additional pressure on hedge funds and other financial institutions forcing them to quickly deleverage to meet margin calls by dumping illiquid assets into a saturated market at fire-sale prices. This process has been dubbed the “great unwind”.

In the last six years, the mortgage-backed securities market has ballooned to a $4.5 trillion dollar industry. The investment banks are presently holding about $600 billion of these complex debt instruments. So far, the banks have written-down $125 billion in losses, but there's a lot more carnage to come. Goldman Sachs estimates that banks, brokerages and hedge funds will eventually sustain $460 billion in losses, three times greater than today. Even so, those figures are bound to increase as the housing market continues to deteriorate and capital is drained from the system.

The Fed has neither the resources nor the inclination to scoop up all the junk bonds the banks have on their books. Bernanke has already exposed about half of the Central Bank's balance sheet to credit risk. ($400 billion) But what is the alternative? If the Fed doesn't intervene, then many of country's largest investment banks will wind up like Bear Stearns; DOA. After all, Bear is not an isolated case; most of the banks are similarly leveraged at 25 or 35 to 1. They are also losing more and more capital each month from downgrades, and their main streams of revenue have been cut off. In fact, many of Wall Street's financial titans are technically insolvent already. The generosity of the Fed is the only thing that keeps them from bankruptcy...

AND THE BAD NEWS KEEPS ON COMING==SEE REST AT LINK!

[DemReadingDU]

21. Thanks for posting the Whitney articles

He always has some interesting things to say!

[librechik]

61. saw that one coming down Broadway n/t

I was there the first time around

[Demeter]

18. Dollar Heads for Biggest Weekly Drop Against Euro in a Month

http://www.bloomberg.com/apps/news?pid=20601087&sid=arRP1iTbLQ94&refer=home

By Agnes Lovasz and Kosuke Goto

March 28 (Bloomberg) -- The dollar headed for its biggest weekly decline in a month against the euro as traders raised bets the Federal Reserve will cut interest rates to avert a recession.

The currency was also poised to drop versus the British pound and the Swiss Franc before a U.S. government report today that will probably show growth in consumer spending slowed. The yen fell against the Australian and New Zealand dollars as gains in Asian stocks prompted traders to increase holdings of higher- yielding assets funded with loans from Japan.

The dollar traded at $1.5812 per euro at 7:15 a.m. in New York, from $1.5779 yesterday and $1.5431 a week ago. The U.S. currency rose to 99.97 yen, from 99.65 yesterday and 99.58 at the end of last week. Japan's currency weakened to 158.10 per euro, from 157.21 yesterday and 153.55 on March 21.

The dollar, which dropped 2.4 percent this week, will trade in the $1.5750 to $1.58 range today before falling to a record $1.60 within the next two weeks, Praefcke predicted.

New Zealand's dollar advanced after a statistics bureau report showed the nation's economic growth in the fourth quarter accelerated at the fastest annual pace in three years. The currency rose to as high as 80.68 U.S. cents, before trading at 80.54 cents, from 80.35 cents. It also gained 0.6 percent to 80.56 yen. The Australian dollar strengthened 0.6 percent to 92.40 U.S. cents and 0.9 percent to 92.41 yen.

ECB Speakers

The euro rose for a sixth day against the yen, its longest stretch since Feb. 21, on speculation European Central Bank officials will today reiterate concern that price growth may increase. Inflation accelerated to 3.3 percent in February, boosted by record oil costs and higher food prices.

Five governors of Europe's central banks, including Austria's Klaus Liebscher, will meet in Prague, and ECB executive board member Juergen Stark will speak in Cape Town.

ECB President Jean-Claude Trichet said in a statement released yesterday there are ``upside risks' to inflation because of rising oil and food prices, signaling interest-rate cuts were not imminent.

``Inflation is still a problem and the economy is doing relatively well in Europe,'' said Seiichiro Muta, director of foreign exchange in Tokyo at UBS AG, the world's second-largest currency trader. ``The trend for a stronger euro is intact.'' The euro may rise to $1.5860 and 158.00 yen today, Muta forecast.

Yield Advantage

The yield advantage on two-year German notes over similar- maturity Treasuries increased to 1.85 percentage points on March 26, the most since October 1993. The gap was at 1.74 today.

The euro has gained 8.4 percent versus the dollar this quarter as traders reduced bets the ECB will lower rates this year. The yield on the Euribor interest-rate futures contract expiring in December rose 3 basis points, to 4.04 percent, compared with 3.91 percent a week earlier.

The pound fell to a record 79.29 pence against the euro after reports showed consumer confidence slumped to a 15-year low this month and the U.K. economy expanded slower than forecast in the fourth quarter. It was at 79.16 pence, from 78.64 pence.

Gross domestic product increased 2.8 percent in the three months through December from a year earlier, the least since 2006, the statistics office said.

Carry Trades

The yen dropped against 15 of the 16 most-actively traded currencies as the MSCI Asia-Pacific Index of regional stocks rose 1.1 percent and European shares pared earlier losses, giving investors more confidence to purchase high-yielding assets.

Lower currency volatility may also encourage carry trades. Implied volatility on one-month dollar-yen options fell to 16.50 percent, from 16.65 percent yesterday. Traders quote the gauge of expectations for future currency swings as part of pricing options.

In carry trades, speculators get funds in a country with low borrowing costs and invest in one with higher returns, earning the spread between the two. The risk is currency moves erode those profits.

South Korea's won fell 0.5 percent to 992.97 per dollar after a central bank report showed a third consecutive current- account deficit and Yonhap news agency reported that North Korea had fired short-range missiles.

The Dollar Index traded on ICE Futures in New York, which tracks the currency against those of six trading partners, was at 71.66, down from 72.71 a week ago. It reached a record low of 70.698 on March 17.

The dollar has fallen 0.8 percent against the pound this week, and traded at $1.9974, from $2.0072 yesterday. It has also declined 1.4 percent versus the Swiss franc, and traded at 0.9956 franc, from 0.9941.

Dollar Drop

The dollar headed for its sixth straight quarterly loss, and the biggest since 2004, as the Fed slashed interest rates by 3 percentage points since September to 2.25 percent. Personal spending rose 0.1 percent last month, the smallest gain in more than a year, a Commerce Department report will show today, according to a Bloomberg News survey.

Futures on the Chicago Board of Trade show traders increased bets the Fed will lower its target rate by a half-percentage point on April 30. The futures showed a 46 percent chance of a reduction to 1.75 percent, compared with 42 percent yesterday. The remaining bets were for a cut of a quarter-point.

[DemReadingDU]

22. Columbus trial - Warrant out for missing National Century exec

3/28/08

Rebecca Parrett, the 58-year-old former executive convicted two weeks ago in the National Century Financial Enterprises Inc. fraud trial, is the target of law enforcement officials again.

Parrett, who was found guilty with four other company executives on conspiracy and securities fraud charges, was scheduled to meet a court officer in Carefree, Ariz., where she lives, but never showed up, Assistant U.S. Attorney Douglas Squires said Friday.

The U.S. Marshal's Office has begun a search for Parrett, while U.S. District Judge Gregory Frost on Thursday evening issued a bench warrant for her arrest, said Supervisory Deputy U.S. Marshal Thomas Genz.

"It's pretty rare that this happens," Genz said.

Details on Parrett's whereabouts are still being gathered.

Parrett and the other National Century executives were convicted of running a multiyear fraud at the Dublin company, which collapsed into bankruptcy six years ago and resulted in as much as $3 billion in investor funds going missing. Parrett, Donald Ayers, Roger Faulkenberry, Randolph Speer and James Dierker are each facing prison sentences of 20 to 55 years.

The company's CEO, Lance Poulsen, is scheduled for his fraud trial this summer. He and Karl Demmler, who once owned a popular Dublin bar, were convicted this week on witness tampering charges stemming from Justice Department claims they tried to bribe a key government witness scheduled to testify in Poulsen's trial.

U.S. District Judge Algenon L. Marbley in Columbus allowed the five convicted executives to remain under house arrest until their sentencing on the condition they would be placed on electronic monitoring, but Genz said Parrett never did receive monitoring. He said he's not sure how that happened.

The other defendants are complying with their house arrests, Squires said.

Parrett's attorney said during her trial that she was broke, but Genz thinks it's likely she has other resources. Her passport had been confiscated.

Anyone with information regarding Parrett's whereabouts are asked to call the U.S. Marshal's office at 614-469-5540.

http://www.bizjournals.com/columbus/stories/2008/03/24/daily35.html


edit for 2nd article
3/29/08 Warrant out for missing National Century exec
Parrett was convicted on conspiracy and fraud charges in U.S. District Court in Columbus. After the trial ended March 13, Judge Algenon L. Marbley allowed Parrett to return home to Carefree, Ariz., to await sentencing while on house arrest.

She posted $100,000 bail. Her travel was restricted to Ohio, Arizona and California, and she surrendered her passport to court officials.

more...
http://www.columbusdispatch.com/live/content/business/stories/2008/03/29/parrett.ART_ART_03-29-08_C10_C09PB3B.html?sid=101


link to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3246150&mesg_id=3246263

[donkeyotay]

88. You'd have a higher bail for robbing a 7-11

These people were robbing our healthcare system to the tune of $3 Billion, and bail is set at $100,000. You don't suppose she might have some cash abroad? Oh, but they confiscated her passport. Thank Bob she can't get fake ID or anything unethical like that.

This theft of $3B goes nicely with today's tale of $353m going missing that was allegedly for hospital renovation (in Japan, I think). Folks, the reason we can't afford healthcare is because it's more lucrative than hookers and gambling. The only thing that rivals it is defense.

[saigon68]

94. She's out of the country

They'll never find her

[UpInArms]

23. dollar watch

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

Last trade 71.745 Change +0.150 (+0.21%)

Can Dollar Hold Ground?

http://www.dailyfx.com/story/topheadline/Can_Dollar_Hold_Ground__1206911525909.html

Dollar selling continued this week, but the pair had a hard time clearing the 1.5850 resistance level on the way to challenging the 1.5900 all time highs. Perhaps the bears are starting to run out of steam. Certainly the economic data gave them little to chew on this week. Overall the results were mixed as housing data and personal income showed some mild improvement but Durable Goods once again missed to the downside. At best one could say that the US fundamentals have not become dramatically worse and that was enough to keep dollar bears at bay.
The pair remains at standstill as traders look for new themes to develop. Last week we noted that “With EURUSD having run out of stream at 1.5900 early last week, near term momentum has shifted to dollar bulls. They will however, need further negative surprises out of the Eurozone in order push the pair lower. Otherwise, assuming there are no additional exogenous shocks, the currency market may simply meander aimlessly for the rest of the week in very narrow trading range.”

The range for the time being appears to be contained within 1.5600-1.5850 zone. However, next week the veneer of calm may be shattered by the event risk to come. The US calendar carries important releases nearly every day of the week with both ISM Manufacturing and Services possibly foreshadowing the state of the US labor market to be revealed in Friday’s NFPs. If data confirms the doomsayers worst predictions showing continuing contraction in US labor demand, the dollar may not be able to hold its ground and 1.6000 could give way. On the other hand if the numbers do not reveal a huge decline of –100k or more, the greenback may inch away from precipice and commence a much needed relief rally.



...more...

US Dollar Could Fall to a New Record Low

http://www.dailyfx.com/story/bio1/US_Dollar_Could_Fall_to_1206741107510.html

We have seen some big moves in the currency market this past week, but these fluctuations should pale in comparison to the action that we expect to see next week. Not only are there a lot of economic data due for release from countries around the world, but Federal Reserve Chairman Ben Bernanke will also be testifying before the Joint Economic Committee. His comments as well as the ADP Employment report could set the tone for trading ahead of Friday’s non-farm payrolls report. We continue to call for further job losses in the US economy as Wall Street and Main Street announce more layoffs. With liquidity still a problem, we don’t expect any optimistic comments from Bernanke. For these reasons, the US dollar could fall to a new record low against the Euro in the coming week. The bearish outlook for the US economy is confirmed by the latest US economic numbers. Consumer confidence as measured by the University of Michigan fell to a 16 year low. Even though personal income ticked higher, spending was the weakest in 17 months. Regardless of whether the Federal Reserve admits it, 85 percent of the people surveyed by the University of Michigan already feel that the US economy is in a recession. They have cut back spending and are focusing on repaying debts and rebuilding their savings. Such a dramatic shift in sentiment will be difficult for the Federal Reserve to fix especially since banks and mortgage lenders have been counteracting the Federal Reserve’s efforts by tightening lending standards. Commodity prices are also skyrocketing with rice prices yesterday jumping 30 percent in one day. Inflation will come back to haunt the Federal Reserve, but with consumers retrenching and the housing market weakening, the outlook for growth is so bleak that the Fed may have no choice but to focus on fixing the more immediate problems. Although we think that the Federal Reserve will need to bring interest rates down to 1.50 percent, cutting interest rates alone will not do the trick.

...more...

[Demeter]

24. Fair Game: If You Can’t Sell, Good Luck By GRETCHEN MORGENSON NYT

http://www.nytimes.com/2008/03/30/business/30gret.html?adxnnl=1&ref=business&adxnnlx=1206964829-OvWJJtCaHF4p8ltPHAZVdw&pagewanted=print


WHERE’S my bailout?

That’s what thousands of individual investors, stuck with auction-rate securities that brokers had told them were “as good as cash,” might have wondered as they watched the Federal Reserve take on $29 billion of malodorous assets from the balance sheet of Bear Stearns.

Everybody knows, though, that only big guys get bailouts. Long-suffering small investors, unable to sell these supposedly liquid securities, have to look elsewhere for satisfaction. Unfortunately, satisfaction is elusive for these investors. They have two choices: They can hope that the issuer of the auction-rate security will buy it back. Or they can sue the brokers who sold the securities, in many cases making verbal promises that they could be cashed in weekly. Such suits cost money that many investors do not have. And so they sit and wait with no access to their money.

Let’s revisit the facts of this mess. Auction-rate securities are debt obligations of an issuer, a municipality or a closed-end fund, say, whose interest rates are set at regular auctions, typically occurring every seven days. These securities were invented in the late 1980s and worked fairly well until this year, when the auctions began to fail amid the credit crisis, and investors could no longer sell their securities. While a majority of the $330 billion auction-rate securities market consists of debt obligations issued by municipalities and nonprofit institutions, some $65 billion is in preferred shares issued by closed-end funds. The way the preferred shares were structured puts the closed-end fund issuer in something of a conflicted position, and is central to the morass in which investors now find themselves. Closed-end funds that issue auction-rate preferred shares do so to increase the yield that they pay to their common stockholders. Because of the amount of leverage used, if a fund pays a 5 percent interest rate on the preferred shares it issues and earns 8 percent on that money through brilliant stock picking, the fund’s common stockholders would receive a yield of 9.5 percent on their shares. Naturally, closed-end funds’ common shareholders love the juice that auction-rate preferreds provide. They like the system the way it is, and closed-end fund companies have a fiduciary duty to those shareholders. But investors in the preferred shares, which have no maturity dates, want out. Those with whom I spoke say they wanted a place to stash their short-term cash, not an investment for life. They want the closed-end fund companies to buy back their preferred shares.

If the companies were to retire the preferred shares, their common stockholders would lose out on the extra income generated by the preferred share structure. Therein lies the conflict, and the resulting state of limbo for investors who bought the preferred shares. Many in this group are relatively small investors who got into the stocks when the minimum investment fell to $25,000 from $100,000 a few years back. Investors in the closed-end preferred shares are also steamed because the interest rates they receive on their holdings when the auctions fail, a so-called penalty rate, are far lower than the penalty rates — sometimes in double digits — on many municipal auction-rate notes. Preferred securities now yield around 4.25 percent, not enough to ease the pain of illiquidity....In any case, there are a lot of unhappy clients out there — holding billions of dollars, or so they hope, of these securities. Late Friday, UBS confirmed that it was marking down the value of its clients’ auction-rate preferred shares by about 3 percent. If the auctions keep failing and the fund companies refuse to cash out the holders, brokerage firms who profited on the sales of these “cash equivalents” are in for a blitz of litigation.


THERE'S A SUCKER BORN EVERY MINUTE--AND A CON MAN EVERY SECOND!

[Demeter]

26. My Very Own Risk-Based Repricing Experience by Adam Levitin

http://www.creditslips.org/creditslips/2008/03/my-very-own-ris.html


People sometimes assume that I have a personal issue with credit cards because I write a lot about the card industry and often argue that its practices are harmful to consumers and to general welfare. I really don't. I just think they are an amazing laboratory for examining contractual relationships and bargaining power. Frankly, I'm surprised that more people don't study them, because they are the most ubiquitous type of consumer contract and are at the very core of the network of contracts that makes up our consumer economy.

This week, however, it got personal. I fell into the card industry's billing practice traps. And the funny thing is that this is because the card issuer screwed up. In the end I don't actually owe any money (alas, there's still some issues to resolve)--but I could have very easily ended up paying a lot of money I didn't owe. The ridiculous twists and turns in my saga are illustrative of the serious problems that exist with credit cardholder agreements and why there needs to be legislative limits placed on the terms of these agreements.

Last month I saw a large charge on my Citibank Amex from PACER, the federal courts' on-line docket system. I have court orders from a number of courts that granting me exemption from PACER fees, so I knew the charge amount was incorrect. I didn't have an itemized breakdown from PACER, however, so I didn't know exactly how much of the charge was incorrect.

I called Citi and disputed the charge. The charge is a billing error under 1512 CFR part 226.113(a)(1). Unfortunately my dispute did not compute in the Citi system. Because I was contesting an unliquidated amount of the charges, however, my case didn't fit into one of their eight dispute check boxes. (Note that Reg Z does not require that I know the amount of the error. See 15 C.F.R. Part 226.113(b)(3).) Finally, after speaking to a supervisor, I just decided to dispute the entire amount because that was the only way I could go forward with a dispute given the unbending parameters of Citi's computer system. I also contacted PACER to make sure that they had processed all my fee exemptions.

Fast forward to earlier this week. I still hadn't heard anything from Citi or PACER about the dispute's resolution. But, to my great surprise this month's Citi statement arrived. It says that I owe the full PACER balance and there's a finance charge tacked on for the disputed amount.

When I called Citi to inquire, I was told that I hadn't disputed the charge the previous month. This was in spite of fact that there were numerous notes about the nature of the dispute in my file. In other words, Citi had taken down all sorts of details about my dispute, but never actually processed that I was disputing the charge. Citi entered the dispute a month late, and only after I called to check up on it.

Well, Citi has now (supposedly) removed the finance charge and recorded the charge as contested. But Citi tells me that I need to submit documentation about the dispute or the charge will be reinstated. That means I have to send some 50 pages of court orders to Citi at my own time and expense for a merchant's mistake. The duty to investigate a billing error is Citi's. Nothing in Reg Z requires that the cardholder submit written documentation to the card issuer at my own expense. So why am I footing the bill? (Maybe there's language to that extent buried in my cardholder agreement...)

So what comes out of my own personal sob-story? Five major problems.

(1) It remains unclear to me whether my credit report will show a late payment now. Citi is not permitted to report me if the bill is in dispute. But the dispute was registered a month late because of Citi's mess up. The Citi customer service reps I spoke to were so incompetent (and my suspicion is that they were based on the other side of the world) that it was pointless to try and get this sort of issue straightened out with them. Thus, I might have been reported during the time when I had disputed the bill, but Citi hadn't yet recorded the dispute. I don’t have any control over the reporting. The only way I can learn if reporting happened is to get a copy of my credit reports (and I only get one free copy per year) to verify that I have not been reported as late, and if I have been, then I have to challenge that…all at my own time and expense and with no guarantee of a correction. We really have misplaced burdens in the credit reporting system.

(2)-(3) My (supposed) unpaid balance was $176.96. My nominal APR is 11.49%. For a 29 day billing cycle, compounded daily, this should mean a finance charge of $1.62. Instead, I was hit with a finance charge of $14.27. That means my effective rate was 101.211%. Wow! That's never disclosed on my statement. I had to go play with a compound interest calculator to figure it out.

Where did the extra $12.65 in the finance charge come from? Well, it turns out that my finance charge was not based on my actual balance. Instead, it was based on a "Balance Subject to Finance Charge," which is "the average of the daily balances during the billing period. If you multiply this figure for each balance by its daily periodic rate and by the number of days in the billing period, the result is the total periodic finance charge on that balance. Rounding may produce a small difference.”

The result is that I am paying a finance charge not just on the $176.96 that Citi claims I owe, but also on the $2,661.33 I paid off from the previous month’s balance (pro-rated for the 16 days of the cycle I owed it before payment was credited). Citi claims that this yields an average daily balance of $1,563.42, but I can’t get the math to work (and I’m a former mathlete). And I’ve even tried rounding. (Gee, does Citi round my balance up or down, I wonder?)

There are two serious problems here. First is that Citi is calculating my balance in a way I cannot replicate, even after playing with different methods for half an hour, and this is what I do for a living. Most people don’t have the interest or that type of time to waste on verifying that they are being billed correctly by their card issuer. They just have to take it on faith that their card issuer isn’t making mistakes or doing aggressive “rounding” or worse. This should all be computerized, but given Citi’s incompetence elsewhere in its dealings with me, I don’t have a lot of faith in the accuracy of their calculations (or alternatively in their disclosure of their methodology).

Second, this isn't double-cycle billing, but it is just as bad. I should only be paying interest on my actual balance. Or if I'm not, the disclosed APR should reflect the effective APR on the balance I actually pay. Citi is one of the cleaner issuers, and they're not above a practice like this.

(4) The late payment to Citi might trigger cross-default clauses or unilateral term changes on other cards. Here I am with federal court orders saying that I do not have to pay certain charges that are on my Citicard, and I properly disputed the charges, yet I could be hit with higher interest rates from other card issuers because Citi messed up. Citi's incompetence could lead to me having to pay more to Bank of America or Capital One or Chase or Wachovia. This is risk-based repricing. If other card issuers raise their rates on me, I wonder if they'll change them back after Citi corrects the error? If I had a balance, would a downward adjustment in interest rate be applied retroactively to existing balances? Is risk-based repricing a two-way street? Or is it like the rounding? My guess is that the house always wins.

A less assertive cardholder than I would have just lumped it on the $14 finance charge from Citi. Fortunately, I don't have any balances on other cards, but for a lot of other Americans, Citi's negligence could have cost them a lot of money, and there'd be no realistic recourse against Citi. What happened to the basic tort principle of the least cost avoider bearing the risk?

(5) I was sufficiently frustrated from all of this that I considered closing the account. But that would hurt my credit score. And I those $33 cashback dollars that I've accrued would be forfeit--Citi won't cut checks for less than $50. Citi screws up and it will cost me $33 and a hit to my credit score to sever my relationship with them. So here I am, locked into Citi despite its incompetence. Ouch. This shouldn't be.

* * * * *

As it turns out, today PACER contacted me to tell me that they had made a mistake and were issuing me a credit. So maybe this will all get resolved neatly. But that is only because I’m diligent with my record keeping and assertive about billing errors. Not every consumer is so diligent or assertive.

The next time consumer witnesses are blocked from testifying to Congress about credit card billing practices unless they sign a broad, last-minute waiver of their financial privacy rights, I'm happy to walk across the Mall and sub-in. I'll sign any waiver given to me. And maybe the card issuers will have to show their math and books in return. I’m still flummoxed how they calculated my finance charge.

[Demeter]

27. High prices spark fresh gold rush in California

http://www.ft.com/cms/s/0/4b243902-fd06-11dc-961e-000077b07658.html

By Matthew Garrahan in Los Angeles



It has been almost 160 years since the first California gold rush but, with prices hitting record highs, prospectors are once again flocking to the state’s rivers and deserts in search of the precious metal.

Gold’s ascent – prices crossed the $1,000 an ounce barrier this month and remain well above $900 – has sent sales of mining equipment soaring. “There’s been a dramatic change . . . our sales have risen four-fold in the last three months,” said Harrigan McGregor, owner of GoldFeverProspecting.com, an equipment retailer in northern California. “This is the second big California gold rush. We’ve had a lot of phone calls from people who are quitting their jobs and prospecting full-time.”

The growth of prospecting by individuals has been accompanied by a sharp increase in commercial mining activity. Commercial claims, most of which involve gold mining, rocketed to 2,274 in the first quarter of this year, up from 132 in the same period of 2005, the Bureau of Land Management says.

Membership in the Gold Prospectors Association of America “has tripled in a very short space of time”, said Corey Rudolph, an official of the southern California-based group, which organises events for recreational miners.

The hotspot is a 320km strip known as the Gold Belt, or “Motherlode”, which runs near Highway 49 (named for prospecting “49ers” of the 19th century) and the Sierra Nevada mountains. Mr Rudolph said 5-10 per cent of available gold had been mined. “There’s still a lot of gold out there for the smart guys.”

The market in second-hand gold is also booming, with southern California pawnshops reporting increased trade as people sell unwanted gold items. Depending on the quality, these items can be refined and resold.

However, Mr McGregor said raw gold can fetch even higher prices. “If you find a nugget larger than your pinkie finger, it could sell for up to 30 per cent more than the spot price.”

[Demeter]

28. Check Out This Activist Site: Stop the Mortgage Bailout!

http://www.nationalbubble.com/stopthebailout/



This site is dedicated to stopping the government's planned bailout of the housing market. A bailout requires responsible Americans to pay for the acts of greedy bankers, mortgage brokers, flippers, and over-extended homeowners. In other words, the government wants you to pay for the blunders of others who knew, or should have known, better.


Equally as important, a bailout would permanently price out of the housing market all those responsible Americans who have been patiently saving to buy a house that they can actually afford. The current housing correction is necessary to correct for the historic run up in housing prices over the past decade, which has pushed the price of housing beyond affordability. By bailing out the housing market, the government will prevent housing prices from returning to affordability and thereby ensure that young families will not be able to afford homeownership.

A government bailout of the housing market is both fiscally and morally irresponsible; it is an unfair subsidy being paid to the wealthy (bankers), the greedy (mortgage brokers, flippers, and yes some homeowners), and the incautious (some homeowners), with no benefit to those paying the bill (taypayers).

[DemReadingDU]

30. Chaos on Wall Street

3/31/08
The big banks' fear of big losses is threatening to bring down the entire system, with dire consequences for all of us. Here's what's going on, and what we can do about it.
By Allan Sloan, senior editor at large

Fortune Magazine) -- What in the world is going on here? Why is Washington spending billions to bail out Wall Street titans while leaving struggling homeowners to fend for themselves? Why are the Federal Reserve and the Treasury acting as if they're afraid the world may come to an end, while the stock market seems much less concerned? And finally, what does all this mean to those of us who aren't financial professionals?

Okay, take a few breaths, pour yourself a beverage of your choice, and I'll tell you what's happening - and what I think is going to happen. Although I expect these problems will resolve themselves without a catastrophic meltdown, I'll also tell you why I'm more nervous about the world financial system now than I've ever been in my 40 years of covering business and markets.

Finally, I'll tell you why I fear that the Wall Street enablers of the biggest financial mess of my lifetime will escape with relatively light damage, leaving the rest of us - and our children and grandchildren - to pay for their misdeeds.

We're suffering the aftereffects of the collapse of a Tinker Bell financial market, one that depended heavily on borrowed money that has now vanished like pixie dust. Like Tink, the famous fairy from Peter Pan, this market could exist only as long as everyone agreed to believe in it.

So because it was convenient - and oh, so profitable! - players embraced fantasies like U.S. house prices never falling and cheap short-term money always being available. They created, bought, and sold, for huge profits, securities that almost no one understood. And they goosed their returns by borrowing vast amounts of money.

more...
http://money.cnn.com/2008/03/28/news/economy/disaster_sloan.fortune/index.htm?postversion=2008033107

[54anickel]

40. Game; Set; Match - looks like we've lost what little control there was left

of the Treasury. I'm calling this one for Benito's Corporatism and the Military Industrial Complex. The American experiment in Democracy is coming to a close. Be sure to catch the lights on the way out.

[Demeter]

32. CBPP on Income Concentration

http://ataxingmatter.blogs.com/tax/2008/03/cbpp-on-income.html

The Center on Budget and Policy Priorities has another interesting report today on income inequality in the United States. See Aviva Aron-Dine, New Data Show Income Concentration Rose Again in 2006 (Mar. 27, 2008). The report is based on the work of Thomas Piketty and Emmanuel Saez, who issued an updated version of their research on income inequality, based on new information from the IRS. There are a couple of excellent graphs as well, worth looking at. Key points include:

2006 was the fourth straight year of significant income gains at the very top and very small gains everywhere else: from 2002-2006, the top 1% had average incomes rise by 44% or $335,0000. The bottom 90% had incomes rise by 3%, or $1000.

The share of the nation's income going to the top 1% hasn't been that high since just before the Great Depression.

Those in the very top income distribution--the top one-tenth of 1 percent--had enormous income gains rising 60%, or $1.9 million per household, since 2002.
The three decades of booming economic growth after WWII lifted everybody's boats--the incomes of the bottom 90% actually increased more rapidly, on average, than the incomes of the top 1 percent.

But the three decades since then (from the mid seventies on) have seen the incomes of most Americans increase only a little, while the incomes of the top 1 percent have "soared"

[Demeter]

33. "India’s love affair with gold tarnishing"

http://www.nakedcapitalism.com/2008/03/indias-love-affair-with-gold-tarnishing.html

As the goldbugs load up on gold futures, one of the main buyers of physical gold in pulling back. From the Financial Times:


As India’s voracious appetite for gold wanes, producers of the precious metal are taking heed.

Indian consumers buy about 25 per cent of the world’s gold, the vast majority of which is imported, making the country the largest market for the metal.

Globally, investors have poured into gold, seeking refuge from the deflating dollar...

But with the recent volatility in gold prices, which have hit more than $1,000 per troy ounce, investors have become nervous and sales of gold in India have fallen sharply. Demand for gold in India plummeted 64 per cent year-on-year in the fourth quarter after growing 40 per cent in the first three quarters of last year.

According to James Burton, chief executive of the World Gold Council, the global miners’ group, in the first half of 2007 India was on track to buy more than 1,000 tonnes of gold for the year, but demand “tailed off at the end of the year”, as gold prices rose. Jewellers in India have been particularly hard hit and tell of subdued sales as consumers baulk at high prices. Even families of marrying couples, traditionally obliged to drape newlyweds in the precious metal, are passing on family heirlooms instead of buying new gold.

GOLD BUGS BEWARE--HUGE DROP IN DEMAND!

[Demeter]

34. Why is the US economy crashing?

http://www.itulip.com/forums/showthread.php?p=31714#post31714


In all this, no one yet seems to have posed the question of “why now?”. Why is the crisis clearly more severe this time than ever before, and why are remedies that worked relatively quickly in the past (remember the fast turnaround of the market after October 1987, and the rapid recovery from the rescue of Long Term Capital Management?) failing today? The answer is, simply, that the world has never in its history carried the level of debt that it is carrying today. The remedies that worked when America’s private debt to GDP ratio was a mere 150 percent (see Figure 1) are inadequate when that ratio is 275 percent. FIGURES AT LINK

Those remedies worked in the past, not because they “solved the problem”, but because they encouraged the renewal of the debt accumulation process. Each Federal Reserve rescue was followed by a renewed growth of debt relative to income–without which, the economy would have gone into a slump, rather than a boom. The traditional cure to a financial crisis–to restart the debt accumulation engine–can’t work this time, because in America today, there’s no-one left to lend to (there is no sub-subprime borrower), and no lender willing to risk its capital in yet more debt.

So the dominoes will continue to fall. Manoeuvres like extending the range of securities that are eligible for the Federal Reserve’s repo window will provide temporary liquidity. But while that liquidity exists, the financiers then have to find someone else willing to give them the medium term credit needed to honour the other side of the repo agreement–to buy the securities back from the Fed when the repo agreement expires.

That could be when the next dose of the proverbial manure hits the proverbial fan. The repo agreements that the Fed will arrange will doubtless involve discounts to face value of the bonds being accepted as securities. The firms that take out that temporary liquidity then have to buy those bonds back–and without reserves to draw upon, that will involve further debt.
What odds that it won’t be possible to find that debt, unless the bonds can be repossessed at a higher still discount? What will the Fed do then? Bankrupt the primary dealers who can’t honour the second leg of their repo agreements? Validate the folly of sub-primes by permanently buying the toxic securities they have accepted as collateral–and at what discount? And, with what money, since the reserves of the Federal Reserve are dwarfed by the scale of outstanding private debt?

So the real fun on the markets will begin in three months time, when the credit extended by the expansion of the liquidity window yesterday by the Federal Reserve has to be repaid.

[TalkingDog]

35. Thank you, Demeter

Your chutzpah in taking on a completely new task is much admired and much appreciated. I'm still waiting on word from the computer vet on my persnickety 'puter.

I'm eager to see what today brings us in the market. Shrub getting open and extended boos might be worth something to the pony players.

Thanks again.

Hey to all. I'll peek in later.

TD

[UpInArms]

37. thanks for all your work on the SMW - it looks great!

:yourock:

[burf]

38. May I add my thanks

to that of TD and UIA.

To OZY: Have a safe trip. Godspeed.

[Demeter]

41. And Come Back!

(Just kidding...you can retire...)

[Demeter]

39. I'm Glad. Going to take a little break now....

shut my eyes tight, put fingers in ears, sing LA-LA-LA and hope nothing crashes while I feed the cats.

[dysfunctional press]

42. asian markets didn't do well today...

how does that bode?
http://finance.yahoo.com/intlindices?e=asia

[AnneD]

43. Morning Marketeers....

:donut: and lurkers. I have gone to DC on numerous occasions; in the late summer and early fall. I went last year in the late winter. But one thing I always wanted to do-my bucket list wish, was to see Washington during cherry blossom time. I am happy to report that it lived up to my expectations. The Jefferson Memorial and the tidal basin were covered in fragrant blossoms. Some how-I think Jefferson would have been pleased.

I also recommend that all of you should visit DC at least once in your life. It never cease to be a place to be inspired-esp if one is a history buff. I don't care for the crap coming out of either party at the moment, but these leaders are pygmies compared to the giants that founded this nation. They were willing to sacrifice their lives, their honour, and their fortunes for this nation. Most of our leaders today wouldn't sacrifice the time of day.

We the people, deserve better.

Happy hunting and watch out for the bears....

[Hugin]

62. Morning AnneD...

:hangover:

Yeah, what a difference 200-some-odd years makes.

"Some are born great, some achieve greatness, and some have greatness thrust upon 'em" From Shakespeare's Twelfth Night, 1601
http://www.phrases.org.uk/meanings/326900.html

Okay, I listened to the reform speech and... Well, (*dons flame resistant suit*) It sounded pretty reasonable. I noticed
it echoed closely the comments of George Soros and others at the Davos Economic Conference.

Now, two things could happen:

1) These self-conflicted interested folks could get cracking and set up this framework.

or

2) Status-quo.

I'm betting on number two. In fact, I'm so sure of it for today I dug way down in the Market Music Vault and
retrieved my theme for today... "Smoke Gets in Your Eyes" -- The Platters. The action these proposals will receive
will mirror the notice this perennial Elevator Music Favorite gets.

"They asked me how I knew
My true love was true
Oh, I of course replied
Something here inside cannot be denied

They said someday you'll find
All who love are blind
Oh, when your heart's on fire
You must realize
Smoke gets in your eyes

So I chaffed them and I gaily laughed
To think they could doubt my love
Yet today my love has flown away
I am without my love

Now laughing friends deride
Tears I can not hide
Oh, so I smile and say
When a lovely flame dies
Smoke gets in your eyes
Smoke gets in your eyes"

Different topic... I finally realized exactly what is wrong with the whole Wealth Concentration Philosophy the Right Wing
continuously beats us over the head with. It was pointed out to me by someone who noticed there was nobody supporting
an activity they had gone to, I realized that in order to survive these discretionary things -REQUIRE- a healthy
middle-class. Otherwise they fade away. So, if one is in the have-more class and they enjoy activities other than counting
money. I'd say maybe they should consider preserving a viable middle-class. But, this is only my opinion.

[Demeter]

70. Smoke Gets In Your Eyes

from the 1933 musical "Roberta" by Jerome Kern

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

another Depression era favorite, often filmed and remade, with scads of star talents like Bob Hope, Fred MacMurray, Fay Templeton, Sidney Greenstreet for Broadway,

Irene Dunne, Fred Astaire, Ginger Rogers, and Randolph Scott for first film version,

and Kathryn Grayson, Howard Keel, Red Skelton, Ann Miller, and Zsa Zsa Gabor and was made in Technicolor under the title Lovely to Look At in 1952, another time of economic doldrums.

Then Bob Hope brought it to TV in 1969.

[DemReadingDU]

44. Fleckenstein: It's time to rein in the Fed

3/31/08 In yet another example of the central bank's failed bailout-after-bailout strategy, it's now on the hook for Bear Stearns' losses. We need to clarify the Fed governors' mandate -- or even send them packing. Bill Fleckenstein
Last week, those who believe in perpetually higher stock prices continued to play their favorite game -- "This is bullish because . . ." -- in which they slap that label on any and all news.

Thus they ignored the weakest reading on consumer confidence since 1973, when a particularly brutal recession was in its early days. After all, when more than a handful of people react by uttering the word "recession," you have to get ready for the recovery -- because we all know that recessions don't last for more than the blink of an eye. (Or so their logic goes.)

Of course, we saw another incarnation of the game Wednesday. That's when the crowd sent Bear Stearns (BSC, news, msgs) spiking 8% in 10 minutes on the news that Sen. Christopher Dodd would hold hearings this week to probe the role of the Federal Reserve, the Treasury Department and the Securities and Exchange Commission in Bear's sale. What that implied to the bullish community: the potential for an ever-higher stock price for BSC.

It apparently never occurred to them that if the Fed were to drop its financial guarantee (and though it's now willing to lend money to brokers), Bear Stearns could still be headed for the trash heap. In the bailout nation, every financial problem must always resolve itself positively, right?

more...
http://articles.moneycentral.msn.com/Investing/ContrarianChronicles/ItsTimeToReinInTheFed.aspx

[wordpix]

47. why am I expected to bail out Bear Stearns when I can't afford to send my kid to

college? :grr:

[Demeter]

55. Too Many College Educated Workers--Not Enough Capitalist Pigs

Supply and demand, doncha know? LOTS of demands from the Capitalist Pigs!

[Karenina]

73. What I can't figure out is

Former CEO Cayne cashed out 61 mil in BS at 10 bucks a pop. WHO bought those shares? The American taxpayer??? :crazy:

[happygoluckytoyou]

48. BIN LADEN LAST SEEN IN BUNNY SUIT AT THE WHITE HOUSE

[Demeter]

49. Merck, Schering-Plough Sink on Vytorin

http://biz.yahoo.com/ap/080331/cholesterol_drug.html?.v=5




By Damian Troise, AP Business Writer
Merck and Schering-Plough Skid As Analysts Expect Trial Results to Hurt Cholesterol Drug Sales


NEW YORK (AP) -- Shares of Merck and Schering-Plough plunged Monday to their lowest levels in years as new clinical data raised questions about their cholesterol drugs.

The companies market the cholesterol drug Vytorin through a joint venture, but earlier this year, partial results from a clinical study showed that Vytorin was no more effective at limiting plaque buildup than Merck's Zocor, a drug that is already available in generic form. Vytorin is a combination of Zetia and Zocor.

Full results from that trial were released Sunday. Analysts said they saw little positive news and expected sales of Vytorin and Schering-Plough's drug Zetia to keep declining.

The Vytorin study was part of a triple shot of troubling study data that set a grim tone for Merck Monday, putting pressure on two late-stage drug programs and placing sales of Vytorin in jeopardy.

Schering-Plough shares plunged 26.4 percent to $14.33 in early trading, touching their lowest levels since August 1996.

Merck shares fell 16 percent to $37.41, their lowest since June 2006.

[dweller]

50. things that make you go... HUH?

Fed eyes Nordic-style nationalisation of US banks
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/31/cnfed131.xml

The US Federal Reserve is examining the Nordic bank nationalisations of the 1990s as a possible interim solution to the US financial crisis.
The Fed has been criticised for its rescue of Bear Stearns, which critics say has degenerated into a taxpayer gift to rich bankers.

A senior official at one of the Scandinavian central banks told The Daily Telegraph that Fed strategists had stepped up contacts to learn how Norway, Sweden and Finland managed their traumatic crisis from 1991 to 1993, which brought the region's economy to its knees.

It is understood that Fed vice-chairman Don Kohn remains very concerned by the depth of the US crisis and is eyeing the Nordic approach for contingency options.

Scandinavia's bank rescue proved successful and is now a model for central bankers, unlike Japan's drawn-out response, where ailing banks were propped up in a half-public limbo for years.

more at link
dp

[Demeter]

52. I Must Be Blind, But I See No Connection Between What Happened Then and Now

Unless the goal is simply to nationalize the banks--but if that happened, how would Neil Bush make his billions, or his children?

[dweller]

58. i cross-posted this from

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x3084833#3084942

where 'The Shock Doctrine' and 'debt bomb' are both mentioned.

i'm not sure of what the implications are nor where it will lead.

thus my 'huh?' ... which should be :wtf:
dp

[trogdor]

51. I just love those Sunday morning Bible stories.

Especially when Repubs fail to live up to the morals contained therein.

[AnneD]

56. Citigroup to separate consumer banking, card units

NEW YORK — Citigroup Inc. plans to split its consumer banking unit from its credit-card business as part of a broader reorganization to cut costs and simplify the large financial institution's structure, the company said today.

<SNIP>

The moves come as CEO Vikram Pandit puts his imprimatur on the bank, which he took over after Charles Prince was forced out amid massive write-downs on mortgage-linked securities.

Many analysts expect the credit crisis to spread to consumer lending, which would put the credit card business in danger of major write-downs.

<SNIP>

Citi also said it will set up geographical regions led by regional CEOs as the bank targets faster-growing regions outside of the slumping United States. Ajay Banga will head the Asia Pacific region. William Mills is in charge of Western Europe, Middle East and Africa. Shirish Apte will run the Central and Eastern Europe region. Manuel Mora will handle Mexico and Latin America.

http://www.chron.com/disp/story.mpl/business/5661208.html

This looks like a 2 minute warning....:eyes:

[Demeter]

57. Spinoffs Coming, or Just Spin?

or maybe rearranging deck chairs?

[AnneD]

59. Chronicle tests find mercury above guidelines in bluefin tuna at some local sushi restaurants

Samples of bluefin tuna purchased recently from six Houston-area restaurants had mercury levels above federal guidelines, according to laboratory tests performed for the Houston Chronicle. An additional five showed mercury levels just below the federal standard.

What does that mean to sushi lovers in Houston? That depends on whom you talk to and how much you eat.

Experts and doctors are divided on the health effects of eating fish with high levels of mercury, or even what constitutes a dangerous level of contamination.

"I'm a toxicologist," said Ernest D. Lykissa, co-owner of ExperTox, the laboratory that performed the tests for the Chronicle last month. "I was a connoisseur of sushi. I don't eat tuna anymore after this study."

<much more>

http://www.chron.com/disp/story.mpl/business/5660780.html

No more I love Sushi.....:(

[grasswire]

65. I never eat sushi

Most of the world's restaurant grade sushi comes from fisheries controlled by the Rev. Sun Myung Moon. I will not support his cult or his political activities.

[AnneD]

69. I've never heard that....

can you back it up? It is worth of a boycott if true.

[grasswire]

76. plenty of info is online about Moon's fisheries monopolies.

The Chicago Trib did a story in 2006 about it all, but it is restricted to subscribers only. Here's part of it:

"Adhering to a plan Moon spelled out more than three decades ago in a series of sermons, members of his movement managed to integrate virtually every facet of the highly competitive seafood industry. The Moon followers' seafood operation is driven by a commercial powerhouse, known as True World Group. It builds fleets of boats, runs dozens of distribution centers and, each day, supplies most of the nation's estimated 9,000 sushi restaurants.

Although few seafood lovers may consider they're indirectly supporting Moon's religious movement, they do just that when they eat a buttery slice of tuna or munch on a morsel of eel in many restaurants. True World is so ubiquitous that 14 of 17 prominent Chicago sushi restaurants surveyed by the Tribune said they were supplied by the company.

Over the last three decades, as Moon has faced down accusations of brainwashing followers and personally profiting from the church, he and sushi have made similar if unlikely journeys from the fringes of American society to the mainstream.

These parallel paths are not coincidence. They reflect Moon's dream of revitalizing and dominating the American fishing industry while helping to fund his church's activities.

"I have the entire system worked out, starting with boat building," Moon said in "The Way of Tuna," a speech given in 1980. "After we build the boats, we catch the fish and process them for the market, and then have a distribution network. This is not just on the drawing board; I have already done it."

In the same speech, he called himself "king of the ocean." It proved not to be an idle boast. The businesses now employ hundreds, including non-church members, from the frigid waters of the Alaskan coast to the iconic American fishing town of Gloucester, Mass."

Incidentally, here is a list of the companies owned by Moon's Unification Church. http://www.freedomofmind.com/resourcecenter/groups/m/moonies/businesses_us_front.htm

[antigop]

60. Combine identity theft with mortgage fraud and what do you get?

House stealing -- the latest scam on the block

This is from the fbi.gov website:
http://www.fbi.gov/page2/march08/housestealing_032508.html

What do you get when you combine two popular rackets these days—identity theft and mortgage fraud? A totally new kind of crime: house stealing.

Here’s how it generally works:

… The con artists start by picking out a house to steal—say, YOURS.
… Next, they assume your identity—getting a hold of your name and personal information (easy enough to do off the Internet) and using that to create fake IDs, social security cards, etc.
… Then, they go to an office supply store and purchase forms that transfer property.
… After forging your signature and using the fake IDs, they file these deeds with the proper authorities, and lo and behold, your house is now THEIRS.

[AnneD]

75. At last-reality shows put to good use.....

An Oilman Entices, and Investors Cry Foul

MTV
“My Super Sweet 16” on MTV showed Gary Milby and his daughter Ariel living lavishly, drawing regulators’ interest.
Horse-drawn carriages delivered teenage guests to a faux-castle tent where they were met with dancing jesters and disco lights. The birthday girl, wearing a white dress and tiara, flew in via helicopter. And the evening ended with fireworks and the arrival of Ariel’s gift from her father: a brand new BMW 325i.

As viewers learned, Ariel’s dad was a successful oilman. “I love oil. Oil means shoes and cars and purses,” Ariel exclaimed to the camera as she and her father stomped around oil drilling sites in the muddy hills near her home in Campbellsville, Ky. When her father pointed to one of the sites and told viewers that it produced 120 barrels a day, Ariel asked, “How many Louis Vuittons is that?” Her father’s answer was “a bunch.”

The show typically attracts younger viewers, but this particular episode, shown in February 2007, caught the attention of an entirely different demographic: government regulators.

<snip>

Last fall, the Securities and Exchange Commission filed a complaint accusing Mr. Milby of raising more than $19 million from 375 investors over about a year and a half, starting in February 2005. At least $12 million was diverted into offshore accounts and family trusts and millions of dollars was spent on Mr. Milby’s lavish lifestyle, the S.E.C. said in its complaint. Mr. Milby denied all of the accusations against him.

http://www.nytimes.com/2008/03/30/business/30gas.html?_r=1&scp=1&sq=Milby&st=nyt&oref=slogin

I admit I don't watch this, but I'd be glued to the tube if they did a reality show 'CEOs in the Big House'. Have them do humiliating things for a tin of cavier or a bottle of Dom :popcorn:

[CatholicEdHead]

87. If you want to see how the really rich live, watch that show

I caught it a few times while flipping channels and was appalled every time.

[AnneD]

66. Natural gas up, crude drops in commodity selloff

Crude oil prices fell today, joining an overall selloff in commodities, while natural gas prices rose as lingering cool temperatures kept demand strong.

Light, sweet crude for May delivery dropped $3.40 to $102.22 a barrel on the New York Mercantile Exchange.

Commodities in general were declining Monday, with the price of gold down $9 at $927.50 on the Nymex, but crude was also helped along by the return to service of a bombed Iraqi pipeline. The attack on the pipeline, which was repaired soon afterward, had raised concerns of a plunge in Iraqi exports.

"The oil price has been pulling back because the disruption in the oil pipeline supply in Iraq has been resolved," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore.

more.....

http://www.chron.com/disp/story.mpl/business/5661780.html

So...I guess we don't even get oil out of the deal either-as if we ever had the right to their natural resources.

[TrogL]

67. Loonie Watch

Highlights

Current:



30-day and 90-day vs.greenback:



30-day vs. Euro, Yen, UK Pound and Swiss Franc




Currency Comparison: http://members.shaw.ca/trogl/looniewatch.html

Detailed analysis: http://quotes.ino.com/exchanges/?r=CME_CD

Up-to-the-minute graph: http://quotes.ino.com/chart/?s=CME_CD.Y%24%24&v=s&w=5&t=l&a=1

Historical values http://www.x-rates.com/d/USD/CAD/data30.html

2008-02-18 Monday, February 18 0.998702 USD
2008-02-19 Tuesday, February 19 0.984349 USD
2008-02-20 Wednesday, February 20 0.981547 USD
2008-02-21 Thursday, February 21 0.991768 USD
2008-02-22 Friday, February 22 0.984737 USD
2008-02-25 Monday, February 25 1.0018 USD
2008-02-26 Tuesday, February 26 1.0141 USD
2008-02-27 Wednesday, February 27 1.02291 USD
2008-02-28 Thursday, February 28 1.02912 USD
2008-02-29 Friday, February 29 1.02082 USD
2008-03-03 Monday, March 3 1.01348 USD
2008-03-04 Tuesday, March 4 1.00462 USD
2008-03-05 Wednesday, March 5 1.01041 USD
2008-03-06 Thursday, March 6 1.01554 USD
2008-03-07 Friday, March 7 1.00847 USD
2008-03-10 Monday, March 10 1.00251 USD
2008-03-11 Tuesday, March 11 1.00472 USD
2008-03-12 Wednesday, March 12 1.01061 USD
2008-03-13 Thursday, March 13 1.01616 USD
2008-03-14 Friday, March 14 1.01348 USD
2008-03-17 Monday, March 17 1.00231 USD
2008-03-18 Tuesday, March 18 1.00624 USD
2008-03-19 Wednesday, March 19 0.997307 USD
2008-03-20 Thursday, March 20 0.974184 USD
2008-03-21 Friday, March 21 0.976658 USD
2008-03-24 Monday, March 24 0.980104 USD
2008-03-25 Tuesday, March 25 0.982704 USD
2008-03-26 Wednesday, March 26 0.982318 USD
2008-03-27 Thursday, March 27 0.98561 USD
2008-03-28 Friday, March 28 0.982318 USD

Current values

http://quotes.ino.com/exchanges/?r=CME_CD)

Market            Open   High    Low   Last  Change    Pct 
CD.Y$$ Cash     0.9749 0.9756 0.9733 0.9736 -0.0081 -0.83% 
CD.M08 Jun 2008 0.9724 0.9745 0.9700 0.9700 -0.0100 -1.02% 
CD.U08 Sep 2008 0.9775 0.9775 0.9775 0.9784 -0.0023 -0.24% 
CD.Z08 Dec 2008 1.0148 1.0148 1.0148 0.9767 -0.0023 -0.24% 
CD.H09 Mar 2009 0.9757 0.9757        0.9750 -0.0023 -0.24% 
CD.M09 Jun 2009 0.9995 0.9995        0.9730 -0.0023 -0.24% 
 

Other combinations: (http://quotes.ino.com/exchanges/?c=currencies)

Market              Open    High     Low    Last Change     Pct 
AUSTRALIAN $/CANADIAN $ (NYBOT:AS)
ACD.M08 Jun 2008  0.9254  0.9254  0.9254  0.9254 -0.0018  -0.19%  

EURO/BRITISH POUND (NYBOT:GB)
GB.M08.E Jun 2008 0.7981  0.7981  0.7978  0.7978 +0.0048  +0.61%   
EURO/CANADIAN $ (NYBOT:EP)
EP.Z07 Dec 2007  1.37490 1.37830 1.37490 1.37500 -0.01025 -0.75% 
EURO/JAPANESE YEN (NYBOT:EJ)
EJ.M08.E Jun 2008 155.68  156.50  155.68  156.50 +1.02    +0.66%   
EURO/US$ (SMALL) (NYBOT:EO)
EO.M08.E Jun 2008 1.5716  1.5834  1.5716  1.5745 +0.0042  +0.27% 

Blather (from http://quotes.ino.com/exchanges/?r=CME_CD)

The June Canadian Dollar was lower overnight as it extends last week's narrow trading range. Stochastics and the RSI are neutral hinting that a double bottom with January's low might be forming. Closes above the 20-day moving average crossing at 99.59 are needed to confirm that a double bottom with January's low has been posted. If June renews this month's decline, January's low crossing at 96.30 is the next downside target. First resistance is the 10-day moving average crossing at 98.42. Second resistance is the 20-day moving average crossing at 99.59. First support is last Monday's low crossing at 96.80. Second support is January's low crossing at 96.30.

Analysis

No, I'm not dead. Just living in utter chaos which appears to be finally getting resolved.

The loonie's been on a slide for about a week, for no particularly good reason. Hence, I think it's just a manic swing wearing off.

[AnneD]

68. Less corn in ground may mean higher grocery bills

WASHINGTON — Farmers are expected to plant less corn this year, which could mean higher continuing higher costs for consumers at the grocery store.

Corn prices have skyrocketed in recent years, helped by the burgeoning ethanol industry, which turns the crop into fuel, and rising worldwide demand for food. The higher prices have hurt poultry, beef and pork companies, who use corn to feed their animals.

Farmers are expected to plant 86 million acres of corn this year, the Department of Agriculture predicted today, down 8 percent from 2007, when the amount of corn planted was the highest since World War II. The decreased supply could drive corn prices even higher — a cost for food producers that could be passed on to consumers.

According to the Agriculture Department, corn planting is expected to remain at historically high levels but could be down this year because of the high expense of growing corn and favorable prices for other crops, such as soybeans.

More.....

http://www.chron.com/disp/story.mpl/business/5661300.html

The comments are interesting on this puppy.

[AnneD]

71. NJ taking garden out of Garden State?

TRENTON, N.J. — New Jersey farmers are starting to worry that their state lawmakers are about to take the garden out of the Garden State.

Gov. Jon Corzine is proposing to make New Jersey the third state without a Department of Agriculture as he looks to slash spending amid chronic state budget problems.

Some argue the move will chase away farmers who persevered for generations while New Jersey grew into the nation's most densely populated state.

"Ultimately, the quality of life of all of New Jersey's citizens will suffer," said William Griffin, president of the New Jersey State Board of Agriculture.

http://www.chron.com/disp/story.mpl/ap/business/5660977.html

Local growers without help and unscrupulous folks unregulated.

[Demeter]

74. U.S. stocks climb as quarterly losses loom

http://www.marketwatch.com/news/story/us-stocks-climb-first-session/story.aspx?guid={A5F829A7-002B-4285-92ED-2FA484404F33}&siteid=yahoomy


Drugmaker Merck & Co. leads decliners on blue-chip index, down 15%
By Kate Gibson, MarketWatch

Last update: 12:33 p.m. EDT March 31,

NEW YORK (MarketWatch) -- U.S. stock indexes steamed higher Monday to snap a three-session losing streak, but were still poised to close the quarter with their steepest decline in nearly four years.

"The worst quarter since the first half of 2002 will be in the books at the close today, and not a day too soon," said Paul Nolte, director of investments at Hinsdale Associates.


Windy City

Weekly data started Monday with the release of the Chicago Purchasing Managers Index, which climbed to 48.2 in March from 44.5, with the better-than-expected reading coming ahead of the national Institute for Supply Management manufacturing survey scheduled for Tuesday.

Economic reports slated for release include Friday's March employment report, which Nolte says is likely to show "another contraction in payrolls, further fueling those sitting on the fence that we are indeed in a recession."

"Forget recession, we have jumped right into depression-like reforms -- it's a mad, mad, mad world!" said Kevin Giddis, managing director of fixed-incoming trading at Morgan Keegan & Co. Inc., of the Bush administration's call for sweeping changes in the oversight of financial companies.
'The Fed planted the seeds of this whole mess by creating an environment of easy money and very unstable monetary policy.'

— Peter Boockvar, Miller Tabak

U.S. Treasury Secretary Henry Paulson on Monday defended his regulatory blueprint, saying initial reviews that the plan amounted to less oversight of Wall Street are incorrect. Read full report.
The administration's proposal is akin to "telling people to bolt their windows after the hurricane already passed through," said Peter Boockvar, equity strategist at Miller Tabak.

"The Fed planted the seeds of this whole mess by creating an environment of easy money and very unstable monetary policy -- now we're giving them a lot more responsibilities to regulate everybody," Boockvar said.


Asian markets dropped, with stocks in Japan dragged down by financials. See Asia Markets.
In Europe, stocks also fell, with telecom shares leading the way, as the market looked set to record its largest quarterly loss since 2002.

[Demeter]

77. The Dilbert Strategy By PAUL KRUGMAN

http://www.nytimes.com/2008/03/31/opinion/31krugman.html?ref=opinion



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

Anyone who has worked in a large organization — or, for that matter, reads the comic strip “Dilbert” — is familiar with the “org chart” strategy. To hide their lack of any actual ideas about what to do, managers sometimes make a big show of rearranging the boxes and lines that say who reports to whom. You now understand the principle behind the Bush administration’s new proposal for financial reform, which will be formally announced today: it’s all about creating the appearance of responding to the current crisis, without actually doing anything substantive.

The financial events of the last seven months, and especially the past few weeks, have convinced all but a few diehards that the U.S. financial system needs major reform. Otherwise, we’ll lurch from crisis to crisis — and the crises will get bigger and bigger. The rescue of Bear Stearns, in particular, was a paradigm-changing event.

Traditional, deposit-taking banks have been regulated since the 1930s, because the experience of the Great Depression showed how bank failures can threaten the whole economy. Supposedly, however, “non-depository” institutions like Bear didn’t have to be regulated, because “market discipline” would ensure that they were run responsibly. When push came to shove, however, the Federal Reserve didn’t dare let market discipline run its course. Instead, it rushed to Bear’s rescue, risking billions of taxpayer dollars, because it feared that the collapse of a major financial institution would endanger the financial system as a whole. And if financial players like Bear are going to receive the kind of rescue previously limited to deposit-taking banks, the implication seems obvious: they should be regulated like banks, too.

The Bush administration, however, has spent the last seven years trying to do away with government oversight of the financial industry. In fact, the new plan was originally conceived of as “promoting a competitive financial services sector leading the world and supporting continued economic innovation.” That’s banker-speak for getting rid of regulations that annoy big financial operators.
To reverse course now, and seek expanded regulation, the administration would have to back down on its free-market ideology — and it would also have to face up to the fact that it was wrong. And this administration never, ever, admits that it made a mistake. Thus, in a draft of a speech to be delivered on Monday, Henry Paulson, the Treasury secretary, declares, “I do not believe it is fair or accurate to blame our regulatory structure for the current turmoil.” And sure enough, according to the executive summary of the new administration plan, regulation will be limited to institutions that receive explicit federal guarantees — that is, institutions that are already regulated, and have not been the source of today’s problems. As for the rest, it blithely declares that “market discipline is the most effective tool to limit systemic risk.”

.....
So, will the administration’s plan succeed? I’m not asking whether it will succeed in preventing future financial crises — that’s not its purpose. The question, instead, is whether it will succeed in confusing the issue sufficiently to stand in the way of real reform. Let’s hope not. As I said, America’s financial crises have been getting bigger. A decade ago, the market disruption that followed the collapse of Long-Term Capital Management was considered a major, scary event; but compared with the current earthquake, the L.T.C.M. crisis was a minor tremor. If we don’t reform the system this time, the next crisis could well be even bigger. And I, for one, really don’t want to live through a replay of the 1930s.

[Hugin]

83. Hmmf... I knew there had to be some sort of catch.

according to the executive summary of the new administration plan, regulation will be limited to institutions that receive explicit federal guarantees — that is, institutions that are already regulated, and have not been the source of today’s problems. As for the rest, it blithely declares that “market discipline is the most effective tool to limit systemic risk.”'

So, as I stated up thread... Status-quo.

[Demeter]

80. Tougher rules may hurt profits: PIMCO

http://news.yahoo.com/s/nm/20080331/bs_nm/wallstreet_profits_pimco_dc_2;_ylt=AsaojQrKn7NtH2KGSkKQLvub.HQA



On Monday, Treasury Secretary Henry Paulson outlined a plan that permits the Federal Reserve to oversee the books of U.S. investment banks and other large non-bank financial companies which are currently treated differently from commercial banks and savings and loans and thrifts.

Gross, the chief investment officer of Pacific Investment Management Company, or PIMCO, anticipates such a regulatory revamp will result in higher capital standards for investment banks, bringing them closer to their commercial bank counterparts. "There seems no way that current reserve requirements for banks will not in some nearly uniform way be imposed on investment banks," Gross, who manages the $120 billion PIMCO Total Return Fund, wrote in his latest monthly 'Investment Outlook' published on Monday. Tougher regulations, with the goal to shore up the safety and soundness of the overall banking system, will likely slash the profits of major investment houses like Goldman Sachs (GS.N), Lehman Brothers (LEH.N) and Merrill Lynch (MER.N), Gross said.

Gross referred to these Wall Street firms as "shadow banks" because they have raised billions in the capital markets, rather from savings and traditional lending. Less stringent regulations had allowed Wall Street to make riskier and more profitable bets than commercial banks. This "shadow banking system," which consists of all the levered investment conduits, vehicles and structures created by Wall Street, is now facing liquidity constraints. "Shadow banks will likely be forced to raise expensive capital and/or reduce the bottom line footings of their balance sheets," he said. "This would mean lower stock prices on higher borrowing costs for investment banks."

Meanwhile, more stringent regulations would mean investors would demand wider risk spreads or higher return premiums, which could be a drag on the economy, according to Gross. "Risk spreads - from corporate bonds to equities to commercial and residential real estate - will settle at permanently higher levels. The U.S. asset-based economy will morph into a more expensive hybrid that will reign supreme for years to come," he said.

[54anickel]

81. The Moral-Hazard Myth (from 2005 but an interesting take nonetheless)

http://www.newyorker.com/archive/2005/08/29/050829fa_fact?currentPage=1

big snip>

Policy is driven by more than politics, however. It is equally driven by ideas, and in the past few decades a particular idea has taken hold among prominent American economists which has also been a powerful impediment to the expansion of health insurance. The idea is known as “moral hazard.” Health economists in other Western nations do not share this obsession. Nor do most Americans. But moral hazard has profoundly shaped the way think tanks formulate policy and the way experts argue and the way health insurers structure their plans and the way legislation and regulations have been written. The health-care mess isn’t merely the unintentional result of political dysfunction, in other words. It is also the deliberate consequence of the way in which American policymakers have come to think about insurance.

“Moral hazard” is the term economists use to describe the fact that insurance can change the behavior of the person being insured. If your office gives you and your co-workers all the free Pepsi you want—if your employer, in effect, offers universal Pepsi insurance—you’ll drink more Pepsi than you would have otherwise. If you have a no-deductible fire-insurance policy, you may be a little less diligent in clearing the brush away from your house. The savings-and-loan crisis of the nineteen-eighties was created, in large part, by the fact that the federal government insured savings deposits of up to a hundred thousand dollars, and so the newly deregulated S. & L.s made far riskier investments than they would have otherwise. Insurance can have the paradoxical effect of producing risky and wasteful behavior. Economists spend a great deal of time thinking about such moral hazard for good reason. Insurance is an attempt to make human life safer and more secure. But, if those efforts can backfire and produce riskier behavior, providing insurance becomes a much more complicated and problematic endeavor.

In 1968, the economist Mark Pauly argued that moral hazard played an enormous role in medicine, and, as John Nyman writes in his book “The Theory of the Demand for Health Insurance,” Pauly’s paper has become the “single most influential article in the health economics literature.” Nyman, an economist at the University of Minnesota, says that the fear of moral hazard lies behind the thicket of co-payments and deductibles and utilization reviews which characterizes the American health-insurance system. Fear of moral hazard, Nyman writes, also explains “the general lack of enthusiasm by U.S. health economists for the expansion of health insurance coverage (for example, national health insurance or expanded Medicare benefits) in the U.S.”

What Nyman is saying is that when your insurance company requires that you make a twenty-dollar co-payment for a visit to the doctor, or when your plan includes an annual five-hundred-dollar or thousand-dollar deductible, it’s not simply an attempt to get you to pick up a larger share of your health costs. It is an attempt to make your use of the health-care system more efficient. Making you responsible for a share of the costs, the argument runs, will reduce moral hazard: you’ll no longer grab one of those free Pepsis when you aren’t really thirsty. That’s also why Nyman says that the notion of moral hazard is behind the “lack of enthusiasm” for expansion of health insurance. If you think of insurance as producing wasteful consumption of medical services, then the fact that there are forty-five million Americans without health insurance is no longer an immediate cause for alarm. After all, it’s not as if the uninsured never go to the doctor. They spend, on average, $934 a year on medical care. A moral-hazard theorist would say that they go to the doctor when they really have to. Those of us with private insurance, by contrast, consume $2,347 worth of health care a year. If a lot of that extra $1,413 is waste, then maybe the uninsured person is the truly efficient consumer of health care.

big snip>

The issue about what to do with the health-care system is sometimes presented as a technical argument about the merits of one kind of coverage over another or as an ideological argument about socialized versus private medicine. It is, instead, about a few very simple questions. Do you think that this kind of redistribution of risk is a good idea? Do you think that people whose genes predispose them to depression or cancer, or whose poverty complicates asthma or diabetes, or who get hit by a drunk driver, or who have to keep their mouths closed because their teeth are rotting ought to bear a greater share of the costs of their health care than those of us who are lucky enough to escape such misfortunes? In the rest of the industrialized world, it is assumed that the more equally and widely the burdens of illness are shared, the better off the population as a whole is likely to be. The reason the United States has forty-five million people without coverage is that its health-care policy is in the hands of people who disagree, and who regard health insurance not as the solution but as the problem.

[Demeter]

82. Technology sector picks up momentum

http://www.marketwatch.com/news/story/technology-sector-picks-up-momentum/story.aspx?guid=%7b2B0A22EF-6632-40B7-8C75-A49641F5C7F8%7d&siteid=yahoomy&print=true&dist=printTop

SAN FRANCISCO (MarketWatch) -- Technology stocks picked up momentum Monday afternoon as the broader market also advanced.

The Nasdaq Composite Index (COMPNasdaq Composite IndexCOMP) gained about 24 points, or more than 1%.

The Morgan Stanley High Tech 35 Index (MSHamex morgan stanley hi tech msh:MSH) was up about 1% and the Philadelphia Semiconductor Index ($SOXphlx semiconductor index sox$SOX) was up more than 1.5%.

The Dow Jones Industrial Average added more than 80 points, even as investors braced themselves for data to be released this week that could confirm fears of a serious slowdown.

The tech sector's biggest players posted mixed results. Apple Inc. (AAPLApple IncAAPL) was up less than 1%
and Microsoft Corp. (MSFTMicrosoft CorporationMSFT) added more than 2%.
However, Hewlett-Packard Co. (HPQHewlett-Packard Co.HPQ) was behind fractionally.
Google Inc. (GOOGgoogle inc) was up slightly
while fellow Internet giants eBay Inc. (EBAYebay inc comEBAY) and
Yahoo Inc. (YHOOYahoo! IncYHOO) were behind.
Amazon.com Inc. (AMZNAmazon.com, IncAMZN) was up more than 2%.
In the chip sector, Intel Corp. (INTCIntel Corporation INTC)
Chip-equipment maker Applied Materials Inc. (AMATApplied Materials Inc) was also down a fraction.

[Hugin]

92. Some closing numbers: ~19:30 EST...

DJIA 12,262.89 +46.49 +0.38%
Nasdaq 2,279.10 +17.92 +0.79%
S&P 500 1,322.70 +7.48 +0.57%

Gold future 921.50 -15.00 -1.60%
10-Year Bond 3.43% -0.03 -0.98%


Some observations:

Although, today's announcements were perhaps a big splash on the Public's Perception of Economic Progress on the
macro level. It has so far had little effect on the Markets themselves.

Gold is experiencing a decline, at the present time. May be due to it's high price of late and there may be some
profit taking for various reasons. Like margin calls...?