STOCK MARKET WATCH, Monday April 14

[ozymandius]

Source: du

STOCK MARKET WATCH, Monday April 14, 2008

COUNTING THE DAYS
DAYS REMAINING IN THE * REGIME 282
DAYS SINCE DEMOCRACY DIED (12/12/00) 2640 DAYS
WHERE'S OSAMA BIN-LADEN? 2365 DAYS
DAYS SINCE ENRON COLLAPSE = 2656
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 April 11,
2008>

Dow... 12,325.42 -256.56 (-2.04%)
Nasdaq... 2,290.24 -61.46 (-2.61%)
S&P 500... 1,332.83 -27.72 -2.04%)
Gold future... 927.00 -4.80 (-0.52%)
30-Year Bond 4.30% -0.04 (-0.92%)
10-Yr Bond... 3.47% -0.06 (-1.73%)






GOLD,
EURO, YEN, Loonie and Silver>

---

PIEHOLE ALERT

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

For information on protests and other actions
Citizens For Legitimate
Government>

---

Read more: du

[ozymandius]

1. Market WrapUp: Wagging The Dog

BY BRIAN PRETTI

Assessing what we know and what we don't know is the ever-present and ongoing psychological battle in investment management, now isn't it? Trying to make an assessment of the fundamental facts and then reconciling this view of life with the reality of very short term financial market outcomes can be quite the trying challenge psychologically, emotionally, and even physically, to be honest. If we accept the fact that the financial markets are theoretically always looking ahead and discounting in current price what they are seeing in the future provides the perfect backdrop for of the moment personal tension in trying to "guess" what the markets may be seeing ahead that we cannot amidst the day-to-day of current reality that presents itself to us in economic stats, corporate earnings reports, etc. Nothing like starting the discussion with a bit of personal philosophical meandering, now is there? But in this very special current environment, we need to broaden our thinking and “field of vision,” if you will. Although traditional and time-tested financial market signposts are indeed quite important to monitor, the financial market environment of the moment has the capability to perhaps blur or bend our vision in a manner unlike anything we have lived through in many a moon, if ever. This is the topic of discussion.

Okay, here's what I think I "know" about the present. Until proven otherwise, we are in a macro bear market for equities. Detailed in a discussion on the CI subscriber site literally on the first day of this year was that collectively all of our favorite long-term equity market indicators have turned bearish. Not a few, not a lot of them, ALL of them. Trying to keep it simple, arguing with unanimity in longer-term market message is left to those willing to test their fortunes and their wills. In terms of the macro, it's a time for meaningful caution regarding equities. Secondly, the US economy is in recession right now. Although detailed in our commentaries many of the now current reasons why in discussions over the recent past, a standout anecdote is the fact that the LEI (leading economic indicators) report for February that hit the Street a few weeks back has now shown us a consistent five straight months of decline. LEI of the last half year is completely consistent with initial recessionary periods past. In essence, it's corroborating the fact that recession has already arrived, although "officially" that fact will be revealed some time in the future when its usefulness as a piece of factual investment information will be essentially useless. By the way, if the LEI deteriorates meaningfully further from here in the coming months ahead, it will be suggesting a severe or lengthy recession to come, as opposed to the mild recession the consensus is expecting (if any recession at all) and the LEI suggests for now.

Point blank, the evolutionary character of the credit markets is THE issue to focus upon, an issue that is clearly driving both broader financial market and real economic outcomes of the moment. It's my belief that a credit cycle of really generational proportion has now given way under its own weight to an elongated process of systemic deleveraging. A process that has really just begun. In question ahead will be the sustainability of the very props that built this credit cycle, such as the entire concept and faith in securitization, the integrity of and trust in the credit rating agencies, the trustworthiness of the brokers/investments banks, and faith in the regulatory oversight of the US financial system itself. Against this backdrop we also do indeed know that literally ALL guns are being brought to bear upon the continually unfolding credit market issues of the day by the Fed/Treasury/Administration.

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

[Demeter]

16. What Freaks Me Out Here Is the Attitude

Again that theme that it's just the market down cycle. They hope. That the great deleveraging will be finessed through market magic and people won't despair or die of it.

I don't see it, and I don't buy it. Maybe it's because Michigan's had 7 years of downturn already with no relief (natural or federal).

[girl gone mad]

25. Here's how I see it:

when the elites were no longer happy with the amount of wealth they were able to extract from the masses by exploiting resources and labor, they decided they would create wealth out of thin air and stick us with the bill via asset inflation. But without any real regulation, things got out of hand. Too many pieces of our financial system are faltering at the same time. They are counting on a bailout, but the Fed can't inject money into the system fast enough.

[Demeter]

29. Then It's a Sickness

There is such a thing as too much greed.

[Tansy_Gold]

36. "Then It's a Sickness"

Ya think???

:-(



(happy monday, from

tansy gold)

[Warpy]

79. That's just what happened

They got used to ever escalating paper wealth in the first few years of the Reagan revolution and wanted it to continue. People whose job it is to create paper wealth for the rich found themselves having to shuffle paper around in a big circle, pumping up its price with every exchange. I'm afraid a very great deal of wealth this country thinks it has is going to evaporate back into the thin air that created it very soon.

[slipslidingaway]

98. Contrary Investor has a free monthly newsletter that you can

receive by email, they are one of the sites I credit with helping us preserve our retirement funds.

I posted the monthly article in the Economy Forum at the beginning of April along with the monthly article (from August 2007) detailing the multi-year or multi-decade trend breaks that need to be monitored.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x37175


"...Although we believe each individual chart tells its own story, our main point in this discussion is that collectively, these relationships represent multi-year or multi-decade trend breaks for now. They are now occurring in simultaneous fashion. Just a coincidence? We think not. Moreover, we suggest an important need for continual monitoring as these trends quite similarly hug trends in powerful demographic changes. Could it really be that as the boomers push near and into retirement, what has been their dramatic impact on asset inflation through continual expansion in household leverage is changing? We believe this is indeed the primary question and message to continue to monitor in these relationships. As we’ve suggested many a time, the credit cycle is the key. And this is a slice of the broader credit cycle as it applies to households. Households key to longer-term consumption trends important to both the US domestic and many a foreign exporting economy. You know we’ll be checking back in on a quarterly basis to monitor whether these initial trend changes remain intact, or are simply blips on the ever-growing leverage expansion screen."


From March 30, 2000

See link for charts
http://contraryinvestor.com/moarchive2000/mo033000.htm

"...If It Looks Like A Top and Walks Like A Top...Is it just another "buying opportunity"? Obviously, we're going to find out real soon. As we "guessed" over the last month or so, volatility is increasing in the big averages. Especially the NASDAQ. Tim's fine work could not be more clear:


Today's last ditch effort to save the NAZ worked...for now. Our question is, just how many more share of Cisco does Janus plan to buy? (Answer: As much as it takes, obviously.) Don't they own enough already? A this rate, Chambers better be ready to warm up another Board seat.

Tim's channel work on the S&P continues to be picture perfect. In fact, eerily right on the money:

The next few days/weeks in the market should prove quite interesting. A real study in human conviction, emotion, and possibly fear. (Or maybe the market will just quiet down and go up 10 points a day. WRONG!)"



From March 2003

http://contraryinvestor.com/2003archive/momar03.htm

http://contraryinvestor.com/2003archive/momar03.htm


"Fear Factors...There is absolutely no question that significant equity bear markets bottom in the height of investor fear. Fear that is often irrational. Fear that is often an emotional mirror image of the lack of logical thinking that helps drive the euphoria seen at equity bull market tops...

Where've You Been? We've Looked For You Forever And A Day...For long time readers of CI, you know we've been looking for a collapse in consumer confidence at some point during the current cycle. It's happened during every economic and significant equity market troughing experience of the last four decades at least..."

[Demeter]

118. Thanks for the Rec. I'll Look into It.

[slipslidingaway]

137. You're welcome :) n/t

[ozymandius]

2. Today's Reports

08:30 Retail Sales Mar
Briefing.com 0.4%
Consensus 0.1%
Prior -0.6%

08:30 Retail Sales ex-auto Mar
Briefing.com 0.7%
Consensus 0.2%
Prior -0.2%

10:00 Business Inventories Feb
Briefing.com 0.7%
Consensus 0.4%
Prior 0.8%

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

[Pale Blue Dot]

35. My prediction: Dow up 400pts. if retail sales at or above 0.4%.

Because lately Wall Street ignores the mountains of really bad news and completely overreacts to one piece of slightly not-so-bad news.

:eyes:

[UpInArms]

37. U.S. Feb. retail sales revised to down 0.4% vs 0.6% prev

I'd post the March headline number, but since they revised Feb down versus an up number, I'm going to assume that March will be revised downward.

If there were any credibility in the reports, it would be different, wouldn't it?

01. U.S. March retail sales ex-auto and ex-gas flat
8:30 AM ET, Apr 14, 2008

02. U.S. March retail sales ex-gasoline flat
8:30 AM ET, Apr 14, 2008

03. U.S. Feb. retail sales revised to down 0.4% vs 0.6% prev
8:30 AM ET, Apr 14, 2008

04. U.S. March retail sales ex-autos up 0.1% as expected
8:30 AM ET, Apr 14, 2008

05. U.S. March retail sales up 0.2% vs down 0.1% expected
8:30 AM ET, Apr 14, 2008

[UpInArms]

44. The March gain primarily reflected higher costs for gasoline, which climbed to record highs.

http://news.yahoo.com/s/ap/20080414/ap_on_bi_go_ec_fi/economy

WASHINGTON - Consumers, beset by a credit crunch, rising energy and food costs and a prolonged housing slump, stayed away from the malls in March. Retail sales posted only a small increase after a big drop in February.

The Commerce Department reported Monday that retail sales edged up 0.2 percent in March after a 0.4 percent decline in February. The March gain primarily reflected higher costs for gasoline, which climbed to record highs. Excluding a big 1.1 percent rise in sales at gasoline service stations, retail sales would have been flat last month.

The new report did nothing to dispel worries that consumers will cut back so sharply on spending that the country will tumble into a recession. Consumer spending accounts for two-thirds of total economic activity.

The 0.2 percent increase in retail sales was slightly better than the 0.1 percent increase that analysts had expected and the February decline was revised from an even-bigger 0.6 percent plunge that had been initially reported.

However, the March gain reflected the big jump in sales at gasoline service stations. Sales in most areas either declined or posted lackluster increases such as a tiny 0.2 percent rise in auto sales.

Sales at department stores and general merchandise stores such as Wal-Mart fell by 0.6 percent in March while sales at specialty clothing stores were down 0.5 percent. Demand at these stores had been hurt by the fact that Easter came extremely early this year at a time when much of the country was still blanketed by frigid weather that chilled people's inclination to go shopping for spring clothes.

Sales were also down at furniture stores, building supply stores and appliance stores, all areas where demand has been hurt by the bursting of the housing bubble. In addition to the 1.1 percent increase in sales at gasoline service stations, sales were up 0.3 percent at grocery stores, a gain that probably reflected continued big rises in food costs.

...more...

[UpInArms]

55. U.S. Feb. business sales down 1.1%, largest since Jan. '07

01. U.S. Feb. inventories-sales ratio rises to 1.28 vs 1.26 Jan.
10:00 AM ET, Apr 14, 2008

02. U.S. Feb. business sales down 1.1%, largest since Jan. '07
10:00 AM ET, Apr 14, 2008

03. U.S. Feb. retail inventories up 0.2%
10:00 AM ET, Apr 14, 2008

04. U.S. Feb. business inventories up 0.6% as expected
10:00 AM ET, Apr 14, 2008

[ozymandius]

3. Gas prices set record, oil moves higher

NEW YORK - Gas and diesel pump prices jumped to yet another record Friday, piling on the costs for motorists as well as consumers reliant on trucks, trains and ships that deliver goods to market.

Retail gasoline rose 0.8 cents to a national average of $3.365 a gallon, although drivers in California could expect to pay nearly 30 cents more for regular and over $4 a gallon for higher grades, according to AAA and the Oil Price Information Service.

The increase marks the latest in a series of retail gasoline records in recent weeks, and leaves drivers paying 56 cents more a gallon now than they did a year ago. And there may be more to come.

.....

Oil prices also edged higher in a late-day push, but remained more than $2 below an all-time high set earlier in the week. Light, sweet crude for May delivery rose 3 cents to settle at $110.14 on the New York Mercantile Exchange.

Analysts expect gasoline prices will continue to set records as more drivers take to the roads as summer approaches and refineries complete their conversion to more expensive summer-grade fuel. It is unclear how high prices will go, however, because a bigger fuel bill could convince some drivers to cut back.

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

[ozymandius]

4. Global oil demand seen falling

PARIS (AP) -- Demand for oil will slip in the coming months amid a global economic downturn, the International Energy Agency said Friday, but prices may remain high because of uncertainty over supply.

The Paris-based IEA revised downward its overall forecast for oil demand in 2008 by 310,000 barrels a day to 87.2 billion, following new projections on slumping worldwide economic growth by the International Monetary Fund. Declining U.S. demand drove the revision.

.....

Despite weakening economic growth, prices remain high because of "concerns that projected stockbuilds may not materialize, or may not be high enough to cushion against low spare capacity and geopolitical risks," the report says.

http://money.cnn.com/2008/04/11/news/international/international_oil.ap/index.htm?postversion=2008041109

[wordpix]

40. meanwhile, we have poor public transportation to get people to work by train or bus

[ozymandius]

5. Wachovia has 1Q loss; raising capital

CHARLOTTE, N.C. - Wachovia says it's cutting its dividend to 37.5 cents and going to issue common stock and convertible preferred stock after reporting a loss during the first quarter of $350 million before preferred dividends.

Excluding merger-related expenses, the Charlotte-based bank lost 14 cents a share. It earned $2.3 billion, or $1.20 a share, in the year-earlier period.

http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/earns_wachovia

-very short-

[ozymandius]

6. Report: Wachovia to get $7B investment

CHARLOTTE, N.C. - Wachovia Corp. said Sunday it will move up the release of its first-quarter financial results, an announcement that closely followed a report that the nation's fourth-largest bank is about to get a multibillion-dollar cash infusion.

The Charlotte-based bank, which is struggling to digest its admittedly ill-timed purchase of mortgage lender Golden West Financial Corp., will report before the market opens Monday. The bank had been set to report its results Friday.

.....

Wachovia's shares have sunk 48 percent in the past year, dropping from a 52-week high of nearly $57 as the housing slump and credit crisis pounded the nation's leading banks and financial service companies.

.....

The cash infusion would be Wachovia's second of the year. In January and early February, Wachovia added $8.3 billion in capital by issuing preferred stock and other securities to investors.

http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/wachovia_investment

[Robbien]

38. Bloomberg has a long article on Wachovia's 'unexpected' loss

Very long Bloomberg article about Wachovia and the market reaction to Wachovia's unexpected surprising loss.

What was Wachovia's loss? Hard to tell from the article. Buried within all the commentary one short clause in a long sentence stated "posted a first-quarter loss of $393 million and cut its dividend".

http://www.bloomberg.com/apps/news?pid=20601101&sid=aL25gpxJQWbo&refer=japan

strange

[TalkingDog]

39. Really? Unexpected? .......Really?

There is a saying:
"In the land of blind men, the one-eyed man is king"

If that's the case, why is my ordination to GodHead taking so long?

[Tansy_Gold]

67. Yours and mine both, TD

TalkingDog wrote -- ". . .why is my ordination to GodHead taking so long?"

Seriously -- The more I read this stuff, the more my own ignorant, naive, totally uninformed but common sense gut feelings are borne out. If *I* could seeit and the regulars on SMW could see it, what the hell is wrong with Wall Street? Blinded by greed? :shrug:

Tansy Gold, making no claims to godhead but maybe a subordinate angel or demi-deity???

[AnneD]

89. Morning Marketeers....

:donut: lurkers and nekkid angels...I am sure that got your attention. Tansy, your claims of being a subordinate angel or demi-deity reminds me of my daughters early childhood.

Her Dad and I separated while she was still an infant. I was not one to parade men around or have 'uncles' over. I had a full plate just supporting us and parenting her so it was just us girls for a long time. Sometimes she would forget to take all of her clothing to the bathroom. One day this 4yo little cherub came running out of the bathroom nekkid (as we say in Texas) except for her birthday suit. 'Don't peek. Mommy' she said as she passed me, flying into her room. 'I did see anything but a naked angle' I said. It struck us both as funny-so we have laughed about the occasional 'Nekkid Angel'. The thing about naked angels is that there are no pretenses and you can't hide anything.

So what does that have to do with Wall Street, the Financial markets, or the price of rice in China. As Warren Buffet once put it "You only find out who is swimming naked when the tide goes out." ...Sadly, we will not be seeing any nekkid angels, clothed only in their truth when the tide goes out, but we will know who swam naked because we will see their true selves in all their ugliness.

Happy hunting and watch out for the bears.

[UpInArms]

43. Wachovia to cut investment banking jobs in Q2

http://www.reuters.com/article/bondsNews/idUSWEN492320080414

NEW YORK, April 14 (Reuters) - Wachovia Corp (WB.N: Quote, Profile, Research), the fourth-largest U.S. bank, plans to cut 12 percent of jobs in its markets and investment banking operations in the second quarter, Chief Financial Officer Tom Wurtz said on Monday.

The job cuts are on top of previous cuts and would result in the elimination of 24 percent of jobs in the unit since the start of 2007, Wurtz said on a conference call.

"These markets are going to remain subdued for a longer period of time," Wurtz said. "We remain very committed to the platform and we'll continue to make investments at the appropriate time, but at this point it's the time for paring back some."

...more...

[ozymandius]

7. Futures point to lower Wall St open

FRANKFURT (Reuters) - Stock index futures pointed to a weaker start on Monday on growing concern about weaker corporate results as the U.S. earnings season gains momentum, though financials may offer some support.

A Wall Street Journal report that Deutsche Bank (DBKGn.DE) aims to sell as much as $20 billion of debt related to leveraged buyouts to investors, following Citigroup (C.N) in trying to offload some of its debt, may give a boost to financial shares.

.....

Investors will keep a close eye on U.S. retail sales data for March due at 8:30 a.m. EDT for more clues on the health of the U.S. economy. Economists in a Reuters survey expect the reading to be unchanged versus a 0.6 percent fall in February.

Business Inventories data is due at 10:00 a.m. EDT.

http://news.yahoo.com/s/nm/20080414/bs_nm/markets_stocks_dc

[Ghost Dog]

14. Japan Stocks Fall on GE Profit, Downgrade on Electronics Makers

April 14 (Bloomberg) -- Japanese stocks fell the most in a month after earnings at General Electric Co. unexpectedly sank and a brokerage downgraded electronics makers, raising concern profits may slow in the U.S., Japan's biggest export market.

Canon Inc., which the Nikkei newspaper said may report a 16 percent drop in earnings for the first quarter, tumbled the most in six weeks. Matsushita Electric Industrial Co., the world's largest maker of consumer electronics, and Sharp Corp. dropped after Nomura Holdings Inc. cut its rating on their shares. Banks including Mitsubishi UFJ Financial Group Inc. sank on speculation major financial companies will report asset writedowns this week.

``GE has its hand in so many pots, so it's a good microcosm of the U.S. market, and is directly influenced by changes in the economic picture,'' said Yoshihisa Okamoto, a Tokyo-based fund manager at Mizuho Asset Management Co., which oversees the equivalent of $26 billion.

The Nikkei 225 Stock Average slid 406.22, or 3.1 percent, to 12,917.51 at the close of trading in Tokyo. The broader Topix index slumped 32.38, or 2.5 percent, to 1,246.24. Only one of the 33 industry groups on the benchmark advanced.

It was the biggest fall for both gauges since March 17. About 1.6 billion shares changed hands on the Tokyo Stock Exchange, the lowest for a full day this year.

GE, the second-largest U.S. company by market value, said first-quarter profit fell while analysts had predicted a gain. Citigroup Inc. may take a $10 billion valuation loss this week, and Merrill Lynch & Co. will announce a $5 billion writedown, the Sunday Times of London said yesterday. Group of Seven finance chiefs signaled concern on the dollar's slide and said the global economic slowdown may worsen.

/... http://www.bloomberg.com/apps/news?pid=20601101&sid=aY0KUR_sqiHs&refer=japan

--

HK shares deflate, banks slide on China fears
HONG KONG, April 14 (Reuters) - Hong Kong shares tracked mainland Chinese losses to fall 3.5 percent on Monday, with financial plays leading the slide on fears strong economic data this week could trigger another round of austerity measures by Beijing.

The benchmark Hang Seng Index .HSI ended at 23,811.20. The China Enterprises Index of Hong Kong-listed mainland companies , or H shares, slid 5.2 percent. (US$1=HK$7.8=7.006 yuan)

/... http://uk.reuters.com/article/hotStocksNews/idUKHKF07908120080414

--

Asia Stocks Post Biggest Loss in a Month on Earnings Outlook
April 14 (Bloomberg) -- Asian stocks fell the most in a month, led by banks and consumer electronics makers, after Group of Seven finance ministers said global economic prospects have weakened and financial market losses will continue.

Commonwealth Bank of Australia and HSBC Holdings Plc dropped after the G-7 released a statement saying the world's economy faces ``downside'' risks, according to an April 11 statement. China Vanke Co., the nation's biggest listed property developer, tumbled the most this year after the central bank said there's room to raise borrowing costs. KDDI Corp., Japan's second-biggest mobile-phone operator, slumped after reporting full-year profit that missed its target.

``We are in a period of volatility,'' said Pankaj Kumar, who manages about $460 million as chief investment officer at Kurnia Insurans Bhd. in Petaling Jaya, outside Kuala Lumpur. ``They're confirming what's been expected, the U.S. is perhaps in a recession, Europe is taking a bit of a hit, so is Japan.''

The MSCI Asia Pacific Index lost 2.4 percent to 142.20 as of 3:25 p.m. in Tokyo, set for its biggest decline since March 17 and ending a two-day, 1.9 percent rally. All 10 of the benchmark's industry groups dropped.

/... http://www.bloomberg.com/apps/news?pid=20601080&sid=aE_DCpXGHdak&refer=asia

--

[Ghost Dog]

17. FTSE drops 1 pct as U.S. recession fears hit banks

LONDON, April 14 (Reuters) - Britain's FTSE 100 .FTSE fell for a fifth session early on Monday, tracking steep losses in Asia and the U.S. as investors dumped financials on a growing conviction that the United States was tipping into recession.

Banks were standout losers and all traded lower, with Alliance & Leicester (ALLL.L: Quote, Profile, Research) down 2.9 percent, while Barclays (BARC.L: Quote, Profile, Research) and Royal Bank of Scotland (RBS.L: Quote, Profile, Research) both lost 2.3 percent.

Bradford & Bingley (BB.L: Quote, Profile, Research) fell about 3 percent after the bank said on Sunday it was not intending to raise cash through a rights issue or any other method, rejecting a report that it was looking to strengthen its balance sheet.

By 0749 GMT the leading share index was down 56.3 points at 5,839.2 as shares across Europe fell about 1 percent.

/... http://uk.reuters.com/article/londonMktRpt/idUKL1449227020080414

--

European stocks extend losses in early trade
PARIS, April 14 (Reuters) - European stocks extended their losses early on Monday to trade down 1 percent as recession fears and weak corporate results continued to rattle investors.

At 0747 GMT, the FTSEurofirst 300 index of top European shares was down 1 percent at 1,272.28 points. The index is down 15.6 percent on the year, hit by worries over the prospect of a U.S. economic downturn and the impact of a global credit crisis.

/.. http://uk.reuters.com/article/eurMktRpt/idUKL1456489020080414

--

[UpInArms]

31. Asian, European stocks fall

http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/world_markets

BANGKOK, Thailand - Asian and European markets fell Monday, following Wall Street's tumble late last week on concerns over a slowdown in the U.S. economy and the outlook for corporate profits.

Japan's Nikkei 225 index fell 3.1 percent to close at 12,917.5. Hong Kong's Hang Seng index fell 3.5 percent to 23,811.2. Asia's biggest declines came in China, where the Shanghai Composite Index plunged 5.6 percent and the Shenzhen index lost 6.3 percent.

Meanwhile, in early European trading, the U.K.'s FTSE-100 dropped 0.6 percent, France's CAC 40 fell 0.7 percent and Germany's DAX slipped 0.8 percent.

The declines followed a 2 percent drop Friday in the Dow Jones industrial average on Wall Street as an unexpected decline in first-quarter earnings from General Electric Co. sharpened worries over both corporate profits and the wider American economy, a vital Asian export market. The Dow Jones industrials fell to 12,325.4 on Friday.

In Japan, the focus was on financial shares. Analysts said stocks were hurt by worries over earnings from U.S. banks and high-tech companies. Investors are also waiting for U.S. economic data for March, including retail sales and the consumer price index.

...more...

[ozymandius]

8. Blockbuster bids for Circuit City

DALLAS - Movie rental chain operator Blockbuster is taking an unsolicited $1 billion-plus bid for Circuit City Stores directly to shareholders, saying the consumer electronics chain is dragging its feet on previous offers.

http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/blockbuster_circuit_city

[Demeter]

10. I Wouldn't Do It

I've never been impressed with Circuit City. Blockbuster was having trouble holding its own; adding another chunk of concrete could seriously sink it forever.

[Pale Blue Dot]

33. I think Blockbuster knows it can't survive as a DVD rental only operation.

As a veteran of the video rental business, I can tell you that the writing has been on the wall for sometime; with Video On Demand, shorter pay-per-view windows, and the mail order business, Blockbuster's days are numbered. In my town, one of the major competitors to Blockbuster (Hollywood Video) has already closed and the other is a rinky-dink operation that is almost always empty.

Another looming factor would be that the major studios are trying to get us all to make another format switch, to Blu-Ray. I doubt that Blockbuster can afford to transition all of it's inventory again the way it did when VHS switched to DVD.

My guess is that Blockbusters thinks that diversification is the only way to save the company.

[Demeter]

47. Then Blockbuster Ought to Pick a Going Concern

and if I knew what that was, in these days of miserable failure, I'd pick one myself. Circuit City is not what comes to mind, in any event.

Maybe better if they just refined what they have, made it the best offering out there?

[ozymandius]

9. Fewer large corporations audited by IRS

WASHINGTON - The tax audit rates of the largest companies are less than half what they were 20 years ago while more small and mid-size businesses are coming under scrutiny, according to an organization that monitors the Internal Revenue Service.

The Syracuse University-based Transactional Records Access Clearinghouse described what it said was a "historic collapse" in audits for corporations holding assets of $250 million or more. About 26 percent of them were audited in the 2007 budget year compared with 34 percent in 2006 and 43 percent in 2005.

The IRS did not dispute the numbers, based on agency data. But it strongly disagreed with suggestions it was easing oversight of the biggest corporations.

Enforcement revenues from large companies rose by one-third in 2007 from the previous year, from $10.6 billion to $14.2 billion, said IRS Deputy Commissioner Barry Shott, who heads the Large and Mid-Size Business Division.

.....

Having more money was not necessarily an advantage for individual taxpayers. The IRS said that last year it audited 9.25 percent of those with incomes of more than $1 million, compared with 6.3 percent in 2006. For those earning less than $100,000, the chances of getting audited were less than 1 percent.

http://news.yahoo.com/s/ap/20080414/ap_on_bi_ge/irs_audits

[ozymandius]

11. U.S. Retail Sales Probably Stalled as Gasoline Rose, Jobs Fell

April 14 (Bloomberg) -- Retail sales in the U.S. probably stalled in March as record gasoline prices and rising unemployment forced Americans to cut back, economists said before a report today.

Purchases were unchanged after falling 0.6 percent the prior month, according to the median forecast in a Bloomberg survey of 64 economists. Excluding autos, sales probably increased as service stations benefited from the jump in fuel costs.

Spending, which accounts for more than two-thirds of the economy, is waning as consumers pay well over $3 a gallon for gasoline just as their jobs are in jeopardy and their homes lose value. Investors are betting the Federal Reserve will need to lower interest rates again to shore up confidence.

.....

Consumer spending will rise at an average annual pace of 0.5 percent in the first half of the year, according to a Bloomberg survey of economists taken in the first week of April. That would be the smallest two-quarter gain since purchases dropped in the six months that ended March 1991.

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

[Ghost Dog]

12. World "economic leaders" take "steps", uh huh.

World leaders show unity as credit crisis drags on

WASHINGTON (Reuters) - World finance leaders concluded a whirlwind weekend with a new plan to clean up banks and fresh resolve to rein in foreign exchange markets, but little hope that the credit crisis was nearing an end.

...

The International Monetary Fund predicted a U.S. recession that would exact a hefty toll on global growth, while leaders of the Group of Seven rich nations resorted to tougher talk to try to prop up the ailing U.S. dollar.

...

"It's not over yet," U.S. Federal Reserve Vice Chairman Donald Kohn said, summing up the uncertainty surrounding the financial market turmoil that has raged for eight months.

While there was plenty of agreement on what ails the global economy, finding a cure was trickier. The G7 endorsed a report from the Financial Stability Forum that spelled out dozens of reforms needed from global banks and regulators.

...

Perhaps the biggest surprise from the weekend's events was the stark warning from the G7 that volatile foreign exchange markets posed a threat to economic and financial stability. It was the strongest signal since 2000 that world leaders were unwilling to stand idly by as the dollar dropped.

...

The fate of the U.S. economy colored virtually every discussion. While U.S. and European leaders objected to the IMF's grim economic assessment, they could offer no assurances that things were getting better.

Indeed, in the G7's statement following its meeting on Friday, it said economic prospects had weakened since the last gathering in Tokyo just two months earlier.

The IMF's steering committee, made up of finance ministers and central bankers from 24 countries, echoed that sentiment and called for close global cooperation.

"Risks to the outlook come from the still-unfolding events in financial markets and from the potential worsening of housing and credit cycles," the IMF's committee said. "Inflationary risks -- notably from higher food, energy, and other commodity prices -- have also risen."

...

World Bank President Robert Zoellick held up a piece of bread at a press conference to illustrate his point that inflation threatened starvation in developing countries.

"While many are worrying about filling their gas tanks, many others around the world are struggling to fill their stomachs, and it is getting more and more difficult every day," he said.

/... http://news.yahoo.com/s/nm/20080413/bs_nm/g7_imf_dc;_ylt=ApIztNOuKdJW6xzItG5QbTO573QA

..

World economic leaders act to counter financial, food crises

WASHINGTON (AFP) - World economic leaders have taken steps to alleviate the worst financial shock in decades and a food price crisis that is sparking deadly unrest in developing countries.

In three days of meetings that ended Sunday, finance ministers and central bankers grappled with the credit squeeze and inflation emergencies against the backdrop of an apparent US recession and a sharply slowing global economy.

The Group of Seven industrialized countries set the alarmed tone on the eve of the annual spring meetings of the 185-nation International Monetary Fund and its sister institution, the World Bank.

Confronted by what the IMF head says is the worst financial crisis since the 1930s Great Depression, finance chiefs from Britain, Canada, France, Germany, Italy, Japan and the United States decided only greater transparency in the financial system could restore normalcy to the markets.

The G7 endorsed recommendations from an international forum and set for some of them a deadline for implementation unprecedented in its brevity -- 100 days.

Recommendation is a "gentle word," said Bank of Italy governor Mario Draghi, who also chairs the Financial Stability Forum that made the proposals. "In fact some of these recommendations are actually policy decisions."

...

With the credit squeeze still spreading, the IMF recently warned that the US economy, the world's biggest, was entering a recession and world growth was deteriorating so sharply a global recession was also in view.

The IMF estimated the crisis would cost the global financial system nearly one trillion dollars.

The IMF on Saturday wrapped up its meeting with a call for "strong action and close cooperation" to combat the financial crisis.

...

The IMF and World Bank urged efforts to address the food crisis that is stoking violence and political instability, and the longer term needs of development and poverty reduction, the bank's main function.

And Italian Finance Minister Tommaso Padoa-Schioppa warned in an interview published Monday that only changes in the standard of living of people around the world in the coming years would have a major impact on financial stability.

"If we think that solving or emerging from the crisis means going back to the configuration of growth before the crisis, we would be making a mistake because we were on an unsustainable path," he told The Financial Times.

Basic foodstuff prices have all risen sharply in recent months, sparking violent protests in many countries, including Egypt, Cameroon, Ivory Coast, Mauritania, Ethiopia, Madagascar, the Philippines and Indonesia.

"Based on a rough analysis, we estimate that a doubling of food prices over the last three years could potentially push 100 million people in low-income countries deeper into poverty," World Bank president Robert Zoellick said at the end of the anti-poverty development lender's meeting Sunday.

"This is not just a question about short-term needs, as important as those are. This is about ensuring that future generations don't pay a price too."

"As we know, learning from the past, those kind of questions sometimes end in war," IMF head Dominique Straus-Kahn warned Saturday.

Zoellick also said the bank's steering committee had endorsed his proposed "New Deal" for global food policy, similar in scope to a 1930s program under US president Franklin D. Roosevelt to tackle the problems of the Great Depression.

Calling on governments to begin work, Zoellick said: "We have to put our money where our mouth is now so that we can put food into hungry mouths. It's as stark as that."

/... http://news.yahoo.com/s/afp/20080414/bs_afp/imfworldbankeconomyg7_080414075530

..


World Bank echoes food cost alarm

The rapid rise in food prices could push 100 million people in poor countries deeper into poverty, World Bank head, Robert Zoellick, has said.

His warning follows that from the leader of the International Monetary Fund, who said hundreds of thousands of people were at risk of starvation.

Mr Zoellick proposed an action plan to boost long-run agricultural production.

...

"We have to put out money where our mouth is now so that we can put food into hungry mouths," Mr Zoellick said. "It's as stark as that."

He called for more aid to provide food to needy people in poor countries and help for small farmers. He said the World Bank was working to provide money for seeds for planting in the new season.

He also urged wealthy donor countries to quickly fill the World Food Programme's estimated $500m (£250m) funding shortfall.

Mr Zoellick's "New Deal for Global Food Policy" also seeks to boost agricultural policy in poor countries in the longer-term.

On Saturday, the head of the IMF, Dominique Strauss-Kahn, warned of mass starvation and other dire consequences if food prices continue to rise sharply.

"As we know, learning from the past, those kind of questions sometimes end in war," he said.

He said the problem could lead to trade imbalances that may eventually affect developed nations, "so it is not only a humanitarian question".

/... http://news.bbc.co.uk/2/hi/business/7344892.stm

--

Policymakers join forces to repair battered markets
· Initial reforms to be in place by June meeting
· Authorities reject pleas by banks for a softer stance

The world's leading western industrial nations will today begin a 100-day programme of crash repairs to the global financial system after being warned by a group of leading central bankers and regulators that the turmoil is far from over.

Amid signs that the effects of the sub-prime mortgage crisis in the US are spreading to other parts of their economies, the G7 nations pledged to complete the first stage of the reforms by the time they meet in Japan in June.

The blueprint has been drawn up by the Basle-based Financial Stability Forum (FSF), a gathering of central bankers and regulators, which said at the weekend that there was an urgent need to rein in the speculative activities of banks and other financial institutions.

Mario Draghi, governor of the Bank of Italy and chairman of the FSF, said a recognition that the financial system had been undermined by "perverse incentives" was making reform possible. He said: "If we go back eight or nine months some of this was unthinkable. Now it's changed and it's done."

In the first stage of the reforms, G7 countries have agreed that financial institutions in their countries should fully and promptly disclose their exposure to risk and write-downs, and give a fair value for complex and illiquid products.

They have also accepted the need for better accounting standards and a strengthening of risk-management processes at individual institutions, monitored by more vigilant supervision by regulators. The next stage of the reforms will include more stringent capital requirements to limit reckless lending by banks when there is the risk of a credit bubble developing.

By the end of the year, the G7 is seeking to form tailor-made "colleges of supervisors" for each of the world's leading international banks, which would be in direct contact on a regular basis with their top management.

Pleas by the commercial banks to be spared tougher regulation were rejected. Finance ministers, central bankers and regulators believe the length and depth of the crisis requires action.

/... http://www.guardian.co.uk/business/2008/apr/14/globaleconomy.marketturmoil

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

[Demeter]

13. Anybody Have Any Knowledge or Experience With Gold Based IRAs?

I am contemplating defensive measures....

[Trailrider1951]

85. Try these links

For precious metals:

www.apmex.com

For IRA custodians, try Gold Star Trust or Sterling Trust (google them). I set mine up two and a half years ago when I left my job in Houston to move to Austin. I rolled over my 401K and am now happy I did. Good Luck!

Edited for grammar, oops!

[Demeter]

127. Thank you!

[ozymandius]

15. Goldman Strategists Say U.S. Earnings Are `Awful'

April 14 (Bloomberg) -- An ``awful'' start to the first- quarter U.S. earnings season is a ``harbinger of things to come'' that will push stocks lower, according to Goldman Sachs Group Inc.

``Early signs are awful,'' a team led by New York-based David Kostin, Goldman's U.S. investment strategist, wrote in a note today. ``We expect generally disappointing results and a swath of lowered profit guidance that will drive the Standard & Poor's 500 Index lower in coming weeks.''

The S&P 500, the benchmark index for American equities, dropped 2.7 percent last week after General Electric Co. said the credit-market crisis caused an unexpected earnings decline, while slowing economic growth and rising energy prices eroded profit at United Parcel Service Inc. and Alcoa Inc. Futures on the S&P 500 lost 0.1 percent at 10:50 a.m. in London.

.....

Analysts are currently estimating 2008 profit growth of 11 percent for S&P 500 companies, down from 15 percent at the start of the year, according to Bloomberg data. The index has declined 15 percent since reaching a record in October.

http://www.bloomberg.com/apps/news?pid=20601084&sid=agpT0SCT206E&refer=stocks

[ozymandius]

18. Good morning.

:donut: :donut: :donut:

It's back to the classroom for me. Be well today my friends.

:hi:

[Demeter]

20. Same to You!

[Demeter]

19. Let Them Eat Ethanol! By Sharon Smith 12/04/08 "Dissident Voice '

http://www.dissidentvoice.org/2008/04/let-them-eat-ethanol/

***

....Mainstream economists have usually described the global food crisis as a food “shortage”, but the shortage has been greatly exacerbated by the merciless laws of the free market. In many cases, the problem is not an immediate shortage of food but merely a shortage of the money to pay for it. World Food Program Executive Director Josette Sheeran recently remarked about Sub-Saharan Africa, “We are seeing more urban hunger than ever before. Often we are seeing food on the shelves but people being unable to afford it.” The agricultural/food business is now the second most profitable industry in the world, lagging only behind pharmaceuticals. Indeed the automaker Mitsubishi, which also controls the second largest bank in the world, has become one of the world’s largest beef processors, demonstrating the degree to which capital has flocked to the agribusiness sector. The World Bank’s World Development Report 2008 heaped approval on the role of agribusiness, commenting, “The private agri-business sector has become more vibrant. New, powerful actors have entered agricultural value chains and have an economic interest in a dynamic and prosperous agricultural sector and a voice in political affairs.”

But just as agribusiness wiped out small U.S. farmers in the 1980s, it has repeated this pattern around the world ever since. As global justice activist Vandana Shiva wrote in 2006, in India “without market regulation agribusiness corporations will make profits selling costly seeds, buying cheap farm produce, and locking farmers in debt. This has been the process by which the small family farmer has disappeared in U.S.A, Argentina, Europe.”

Now the law of supply and demand has dictated that the new market for biofuels should reduce the production of corn for food by 25 percent in the U.S.–triggering a manmade shortage and a rise in corn prices. Speculators have been hoarding crops on the expectation that prices will rise further. Meanwhile, investors around the world have been fleeing the falling dollar to buy up commodities such as rice and wheat, adding to the speculative momentum and forcing staple prices higher for the world’s poorest people.

The neoliberal agenda long ago lost its shine for the vast majority of the world’s population, although its most earnest proponents have been the last to recognize this stubborn reality. The most recent World Economic Outlook, published by the IMF last fall, did note rising inequality in the richest countries: “Among the largest advanced countries, inequality appears to have declined only in France… The recent experience (of increasing inequality) seems to be clear change in the course from the general decline in inequality in the first half of the 20th century.” Yet the IMF remained optimistic about the future of neoliberalism: “from 2002 to the present, the world economy has enjoyed its strongest period of sustained growth since the late 1960s and early 1970s, while inflation has remained at low levels. Not only has recent global growth been high but expansion has also been broadly shared across countries. The volatility of growth has fallen.”

In recent weeks, neoliberal policymakers appear to have finally realized that widespread hunger could ignite a level of protest that threatens the ruling order worldwide. World Bank president Robert Zoellick recently worried on the organization’s website, “33 countries around the world face potential social unrest because of the acute hike in food and energy prices.”

[Demeter]

22. Why Costs Are Climbing By Eric Reguly 12/04/08 "Globe and Mail"

http://www.theglobeandmail.com/servlet/story/RTGAM.20080410.wfood0411/BNStory/International/home?pageRequested=all&print=true



...The price increases and food shortages have been nothing short of shocking. In February, stockpiles of wheat hit a 60-year low in the United States as prices soared. Almost all other commodities, from rice and soybeans to sugar and corn, have posted triple-digit price increases in the past year or two...How did it come to this? Surging food prices, now at 30-year highs, are actually a relatively new phenomenon. In the mid-1970s, prices began to fall as the green revolution around the world made farms dramatically more productive, thanks to improvements in irrigation and the widespread use of fertilizers, mechanized farm equipment and genetically engineered crops. If there was a crisis, it was food surpluses — too much food chasing too few stomachs — and dropping produce prices had often disastrous effects on farm incomes.

By 2001, the surpluses began to shrink and prices reversed. In the past year or so, the price curve has gone nearly vertical. The UN's food index rose 45 per cent in the past nine months alone, but some prices have climbed even faster. Wheat went up 108 per cent in the past 12 months; corn rose 66 per cent. Rice, the food that feeds half the world, went "from a staple to a delicacy," says Standard Chartered Bank food commodities analyst Abah Ofon...Food prices in the first three months of 2008 reached their highest level in both nominal and real (inflation adjusted) terms in almost 30 years, the UN says. That's stoking double-digit inflation and prompting countries such as Egypt, Vietnam and India to eliminate or substantially reduce rice exports to keep a lid on prices and prevent rioting. But, by reducing global supply, this only increases prices for food-importing countries, many of them in West Africa....High prices are likely to persist for years...The dramatic price rises have been driven by factors absent in previous food shortages.

They include turning food into fuel, climate change, high oil and natural gas prices (which boost trucking and fertilizer costs), greater consumption of meat and dairy products as incomes rise (which raises the demand for animal feedstuffs), and investment funds, whose billions of dollars of firepower can magnify price increases...Severe weather has clobbered crop production among some big exporting countries. Drought in Australia, the third largest wheat exporter after the U.S. and Canada, has pushed wheat production down by half since the 2005-06 crop year. Statistics Canada said Canadian wheat production fell 20.6 per last year. Exports, as a result, are expected to fall by six million tonnes in the 2007-08 year...While Australia and Canada could bounce back in the next season or the season after, depending on temperatures and rainfall, rising global temperatures do not bode well for agriculture in many parts of the world....The UN has predicted that climate change could reduce production in developing countries by 9 to 21 per cent by 2080 and that sub-Saharan Africa could lose more than 30 per cent of its main crop, maize. Southern Asia, it said, could see millet, maize and rice production fall by 10 per cent. The challenge is to offset the losses with higher crop yields on arable land less affected by climate change.

Mr. Ofon, of Standard Chartered Bank, said rising demand in the face of production shortfalls does not fully explain the dramatic price increases. Investors are the other driver. They have discovered they can make money from food commodities as easily as they can in oil, gold or nickel. "Fund money flowing into agriculture has boosted prices," he said. "It's fashionable. This is the year of agricultural commodities." But Mr. Currie of Goldman Sachs dismisses the theory that funds are pushing prices higher than they would be otherwise, though the funds can make prices rise and fall quickly in the short term. "The simple truth is that the funds don't take delivery of the commodity," he said in an interview. "Therefore they cannot sit on them and put them in silos. Therefore they can't affect prices over the long term."


Dr. Hazell said some big countries, notably the U.S., Canada and Ukraine, have the capacity to increase crop production substantially. Already world cereal production is on the rise, although not nearly fast enough to end the crisis. The Food and Agriculture Organization yesterday forecast a 2.6-per-cent rise in cereal production in 2008.

[Demeter]

23. Castro and Chávez Attack US Backing For Biofuels:Leaders say diverting crops for fuel starves poor

http://www.informationclearinghouse.info/article19730.htm

By Rory Carroll

13/04/08 "ICH" -- - Cuba and Venezuela have launched an offensive against biofuels, warning that the US-backed rush towards ethanol will worsen global hunger and poverty. Fidel Castro has written two newspaper articles in a week voicing alarm at the prospect of countries boosting sugar and corn crops to make ethanol, a fuel that can be used an additive or a substitute for petrol. By diverting crops to feed cars rather than people, the price of food would rise and the world's poor would go hungry, Mr Castro wrote in the Communist party's official newspaper, Granma...Mr Castro's ally, the Venezuelan president Hugo Chávez, also attacked biofuels in a sharp U-turn that put the two leaders shoulder to shoulder against Brazil and the US, the two big ethanol champions.

Until recently, Cuba and Venezuela were enthusiastic about the fuel and with Brazil's help planned to jointly build sugar mills and ethanol plants, hitching the Caribbean to the "green" fuel bandwagon.
That changed after the US president, George Bush, touted his support for ethanol during a tour of Latin America last month that clinched an ethanol deal with Brazil's president, Luiz Inacio Lula da Silva. The men followed up last week with a meeting at Camp David.,Washington, a foe of Mr Chávez and Mr Castro, has promoted home-grown corn-based ethanol as well as the sugar-based variety produced in Brazil and tropical countries as a way to reduce US dependency on oil. Biofuels are also perceived to be less environmentally damaging.

However critics say the fuel, especially the corn-based variety, is far less green than it appears and that converting swaths of land to provide fuel for cars would push up prices of food crops and meat, since animals eat corn. In the wake of Mr Bush's tour, Mr Castro echoed those arguments. A recent column said 3 billion people would die prematurely of hunger and thirst. "Where are the poor countries of the third world going to get the minimum resources to survive? This isn't an exaggerated number; it is actually cautious." He made a polite but pointed criticism of Brazil.

Mr Chávez also expressed dismay. "When you fill a vehicle's tank with ethanol, you are filling it with energy for which land and water enough to feed seven people have been used." It was unclear whether Venezuela's mooted sugar mills and ethanol plants would go ahead. Brazil brushed aside the criticism and on Wednesday its state oil firm, Petrobras, signed a biofuel deal with Ecuador's state oil firm, Petroecuador. The issue may cloud a meeting scheduled next week between Mr da Silva and Mr Chávez.

Cuba and Venezuela are joining an unlikely alliance including anti-poverty campaigners, environmentalists, economists and scientists. The Economist, offended by Washington's ethanol subsidies, said it seldom found itself agreeing with Mr Castro. "But when he roused himself from his sickbed last week to write an article criticising George Bush's unhealthy enthusiasm for ethanol, he had a point."

[Demeter]

24. More than three billion people condemned to premature death from hunger and thirst By Fidel Castro

http://www.granma.cu/ingles/2007/marzo/juev29/14reflex.html


THAT is not an exaggerated figure, but rather a cautious one. I have meditated a lot on that in the wake of President Bush’s meeting with U.S. automobile manufacturers. The sinister idea of converting food into fuel was definitively established as an economic line in U.S. foreign policy... Monday, March 26.

---------------------
A cable from the AP, the U.S. news agency that reaches all corners of the world, states verbatim:

“WASHINGTON, March 26 (AP). President Bush touted the benefits of ‘flexible fuel’ vehicles running on ethanol and biodiesel on Monday, meeting with automakers to boost support for his energy plans.

“Bush said a commitment by the leaders of the domestic auto industry to double their production of flex-fuel vehicles could help motorists shift away from gasoline and reduce the nation's reliance on imported oil.

‘“That's a major technological breakthrough for the country,’ Bush said after inspecting three alternative vehicles. If the nation wants to reduce gasoline use, he said “the consumer has got to be in a position to make a rational choice.”

“The president urged Congress to ‘move expeditiously’ on legislation the administration recently proposed to require the use of 35 billion gallons of alternative fuels by 2017 and seek higher fuel economy standards for automobiles.

“Bush met with General Motors Corp. chairman and chief executive Rick Wagoner, Ford Motor Co. chief executive Alan Mulally and DaimlerChrysler AG's Chrysler Group chief executive Tom LaSorda.

“They discussed support for flex-fuel vehicles, attempts to develop ethanol from alternative sources like switchgrass and wood chips and the administration's proposal to reduce gas consumption by 20 percent in 10 years.

“The discussions came amid rising gasoline prices. The latest Lundberg Survey found the nationwide average for gasoline has risen 6 cents per gallon in the past two weeks to $2.61.”
---------


... The tragedy does not lie in reducing those energy costs but in the idea of converting food into fuel. It is known very precisely today that one ton of corn can only produce 413 liters of ethanol on average, according to densities. That is equivalent to 109 gallons.

The average price of corn in U.S. ports has risen to $167 per ton. Thus, 320 million tons of corn would be required to produce 35 billion gallons of ethanol. According to FAO figures, the U.S. corn harvest rose to 280.2 million tons in the year 2005. Although the president is talking of producing fuel derived from grass or wood shavings, anyone can understand that these are phrases totally lacking in realism.

Afterwards will come beautiful examples of what experienced and well-organized U.S. farmers can achieve in terms of human productivity by hectare: corn converted into ethanol; the chaff from that corn converted into animal feed containing 26% protein; cattle dung used as raw material for gas production. Of course, this is after voluminous investments only within the reach of the most powerful enterprises, in which everything has to be moved on the basis of electricity and fuel consumption. Apply that recipe to the countries of the Third World and you will see that people among the hungry masses of the Earth will no longer eat corn. Or something worse: lend funding to poor countries to produce corn ethanol based on corn or any other food and not a single tree will be left to defend humanity from climate change.

Other countries in the rich world are planning to use not only corn but also wheat, sunflower seeds, rapeseed and other foods for fuel production. For the Europeans, for example, it would become a business to import all of the world’s soybeans with the aim of reducing the fuel costs for their automobiles and feeding their animals with the chaff from that legume, particularly rich in all types of essential amino acids.

In Cuba, alcohol used to be produced as a byproduct of the sugar industry after having made three extractions of sugar from cane juice. Climate change is already affecting our sugar production. Lengthy periods of drought alternating with record rainfall, that barely make it possible to produce sugar with an adequate yield during the 100 days of our very moderate winter; hence, there is less sugar per ton of cane or less cane per hectare due to prolonged drought in the months of planting and cultivation.

I understand that in Venezuela they would be using alcohol not for export but to improve the environmental quality of their own fuel. For that reason, apart from the excellent Brazilian technology for producing alcohol, in Cuba the use of such a technology for the direct production of alcohol from sugar cane juice is no more than a dream or the whim of those carried away by that idea. In our country, land handed over to the direct production of alcohol could be much useful for food production for the people and for environmental protection.

-----------------------------------
I refer to an official news agency, founded in 1945 and generally well-informed about economic and social questions in the world: TELAM. It said, and I quote:

“In just 18 years, close to 2 billion people will be living in countries and regions where water will be a distant memory. Two-thirds of the world’s population could be living in places where that scarcity produces social and economic tensions of such a magnitude that it could lead nations to wars for the precious ‘blue gold.’

“Over the last 100 years, the use of water has increased at a rate twice as fast as that of population growth.

“According to statistics from the World Water Council, it is estimated that by 2015, the number of inhabitants affected by this grave situation will rise by 3.5 billion people.

“The United Nations celebrated World Water Day on March 23, and called to begin confronting, that very day, the international scarcity of water, under the coordination of the UN Food and Agriculture Organization (FAO), with the goal of highlighting the increasing importance of water scarcity on a global scale, and the need for greater integration and cooperation that would make it possible to guarantee sustained and efficient management of water resources.

“Many regions on the planet are suffering from severe water shortages, living with less than 500 cubic meters per person per year. The number of regions suffering from chronic scarcity of this vital element is increasingly growing.

“The principal consequences of water scarcity are an insufficient amount of the precious liquid for producing food, the impossibility of industrial, urban and tourism development and health problems.”

....

March 28, 2007

Fidel Castro.

Translated by Granma International

[Demeter]

28. And Now Time for Breakfast

After proving my machisma with all the doomsday posts. Besides, the cats are crawling all over me.

[54anickel]

96. The Box

Once upon a time, in the land of Hushabye,
Round about the wondrous days of yore.
They came across a sort of box,
bound up with chains and locked with locks,
And labeled "Kindly Do Not Touch, It's War."
A decree was issued round about all with a flourish and a shout,
and a gaily colored mascot tripping lightly on the fore,
"Don't fiddle with this deadly box, or break
the chains, or pick the locks,
And Please... don't ever play about with war."

Well, the children understood, children happen to be good,
and they were just as good around the time of yore.
They didn't try to break the chains, or pick the
locks, or break into that deadly box,
they never tried to play about with war.
Mommies didn't either, Sisters, Aunts, Grannies neither,
'cause they were quiet and sweet and pretty in those wondrous days of
yore.
Well... very much the same as now, and not the ones to blame somehow,
for opening up that deadly box of war.

But someone did... someone battered in the lid,
and spilled the insides out across the floor.
A sort of bouncy bumpy ball,
made up of guns, flags, and all the tears and
horror and death that goes with war.
It bounced right out and went bashing all about,
and bumping into everything in store.
And what was sad and most unfair is that it didn't really seem to care,
much who it bumped, or why, or what, or for.
It bumped the children mainly, and I'll tell you this quite plainly,
It bumps them everyday... and more... and more,
and leaves them dead and burned and dying, thousands of them sick and
crying,
cause when it bumps... it's really very sore.

Now there's a way to stop this ball, it isn't difficult at all,
all it takes is wisdom, wit.
I'm absolutely sure that we could get it back into the box...
and bind the chains and lock the locks.
But no one seems to want to save the children anymore.

Well, thats the way it all appears,
cause it's been bouncing round for years and years
in spite of all the wisdom wit, since those wondrous days of yore...
And the time they came across this box, bound up with chains and locked
with locks...
and labeled "Kindly Do Not Touch, It's War."

- John Denver

[UpInArms]

134. thanks

I certainly do miss John Denver - he could have said so much about what our world has become.

:hi:

[54anickel]

138. Ya, I seem to have a much great appreciation for both his lyrics and

simple guitar style now than when he was around. Remember him doing "Last Night I Had the Strangest Dream" in DC? Damn, that song was written so long ago and sung so many times - it'll always just be a dream. Seems greed will forever trump peace.


Greenspan: Iraq was all about the oil

http://www.crooksandliars.com/2007/09/16/greenspan-iraq-was-all-about-the-oil/

[TalkingDog]

41. My head is going to Asplode!!!!! grrrrrrrrrrrrrrrr.... n/t

[Demeter]

48. Asplode?

Inquiring minds want to know.

[TalkingDog]

92. from one of my absolute favorite online cartoons

www.homestarrunner.com

in this segment:
http://www.homestarrunner.com/sbemail94.html

The site overall is well-written, the graphics and compositional design are top notch. I always point students there to see what a really solid piece of digital media looks like. If you don't know what you are looking at in terms of graphic design, it might not impress as much.... but there are many other reasons to enjoy.

The humor is quirky and subversive, but always family friendly.

[Hugin]

103. Haha!

Too cute! :D

[Demeter]

119. Okay! Thank you very much----

I'm going to think about this for a while.......

[DemReadingDU]

21. Update: While you were sleeping: A financial coup d'état

An interesting comment Saturday from Ilargi in his blog The Automatic Earth

Ilargi said...

I don't really know why people keep assuming that China depends on the US economy, and will try to keep some kind of status quo in trade. China's economy is blowing up with all those dollars flowing in. That is something they know very well, and they have prepared their next steps, rest assured.

As for the US, they don't need the outside capital nearly as much now as they did before Wednesday. I dedicated a post to it, but I don't feel at all that many people have understood what happened. Not when I see the comments here nor looking at what has been said in the media. They'll all learn yet.

In that post, While you were sleeping: A financial coup d'état, I sought to explain, with the help of three Wall Street Journal articles, that the Fed will from now on no longer borrow from China, but from its "own" US citizens, and their kids.

It will effectively have an unlimited credit line, "financed" through unlimited taxation of the US population. It is truly a coup, creating a lame duck political system. And a far more serious development than has been presently recognized.

April 12, 2008 7:12 PM
http://theautomaticearth.blogspot.com/2008/04/debt-rattle-april-12-2008-hundred-days.html?showComment=1208041920000#c1425101053473507097

The first While you were sleeping...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3262331&mesg_id=3262418

The 2nd While you were sleeping...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3264046&mesg_id=3264204

[Demeter]

26. Wanta Save the Economy? Give Workers a Raise By Mike Whitney

http://www.informationclearinghouse.info/article19723.htm

“The bright new financial system, with all its talented participants, with all its rich rewards, has failed the test of the marketplace." Former Fed Chief, Paul Volcker

13/04/08 "ICH" --- -A specter is haunting Wall Street---the specter of insolvency. One major player, Bear Stearns, has already gone under, and from the looks of it, another may be on the way. It's getting ugly out there. The so-called TED spread---which measures the willingness of banks to lend to each other---has begun to widen ominously suggesting that the money markets believe another body will be floating to the surface any day now.

The ongoing deleveraging of financial institutions and the persistent downgrading of assets has the Fed in a tizzy. Bernanke has backed himself into a corner by stretching the Fed's mandate to include anyone on Wall Street with a mailing address and a begging bowl. Now he's taken on the larger task of fixing the plumbing that keeps credit flowing between the various investment banks. Good luck. He's already burned through nearly half of the Fed's balance sheet of $900 billion and the banking meltdown has just begun. The IMF expects the final tally will be $945 billion, that means $3 trillion in lost loans for the banks. Bernanke better pace himself; this mess could last for years.

The US subprime fiasco has spiraled into what the IMF is calling “the largest financial shock since the Great Depression.” America's capital markets are on the fritz. The corporate bond market is frozen, the banks are buckling from their losses, and the housing market is in a shambles. No one is buying and no one is lending; that's a deadly combo. Private equity deals are off 75% from last year and no one will go near a mortgage-backed security (MBS) with a ten foot pole. The mighty wheel of modern finance is grinding to a standstill and no one's quite sure how to rev it up again.

The US consumer is feeling the pinch, too. His credit cards are maxed out, his student loans are overdue, his car payment is in arrears, his mortgage is entering foreclosure, and and the home-equity ATM has been shut down. Now that the credit spigot has been turned off; he's really hurting, but no one is offering him a bailout or a even helping hand; just a few table-scraps from Bush's “surplus package”. 500 bucks will just about fill the tank of a normal-sized SUV; that's it. A new survey from the Pew research Center “Inside the Middle Class—Bad Times Hit the Good Life”, shows that working families are in debt up to their ears and that fewer Americans “believe they are moving forward” than anytime in the last half century. The study also shows that most people believe “it's harder to maintain a middle class life style” and that “since 1999, they have not made economic gains.” Average families are struggling just to make ends meet.

That's why so many people bought homes when they should have opened savings accounts. They thought that speculating on housing would get them a piece of the American dream. What's wrong with that? It looked like a good way to make up for the stagnant wages and crappy hours. The cheer-leading TV pundits offered assurances that “housing prices never go down”, but it was all baloney. Now 15 million homeowners are upside-down on their mortgages and the very same experts are scolding them for fudging the facts on their income. It's all backwards.

No wonder consumer confidence has dropped to record lows. The trust is gone. Working people have been hoodwinked one too many times. They don't need lectures on saving money; they need a raise. The big-wigs who scuttled Bear Stearns are still dining on crab-cakes at the Four Seasons while the working slob is just trying to make his way through Greenspan's nuclear winter living on beef jerky and Big Gulps. Where's the justice?

Volumes have been written about the current crisis; subprime-this, subprime that. Everything that can be said about collateralized debt obligations (CDOs) credit default swaps(CDS) and mortgage-backed securities (MBS) has already been said. Yes, they are exotic “financial innovations” and, no, they are not regulated. But what difference does that make? There's always been snake oil and there's always been snake oil salesmen. Greenspan simply raised the bar a notch, but he's not the first huckster and he won't be the last. What really matters is underlying ideology; that's the root from which this economy-busting hydra sprung. 30 years of trickle down, supply-side gibberish; 30 years of idol worship for the waxy-haired reactionary, Ronald Raygun; 30 years of unrelenting anti-labor, free market, deregulated orthodoxy which inflated the biggest equity-Zeppelin in history. Now the bubble has sprung a leak and the escaping gas is wreaking havoc across the planet. There's food riots in Haiti, Egypt, and Kuwait. Wherever the local currency is pegged to the falling dollar, inflation is soaring and trouble is brewing. Also, European banks are listing from the mortgage-backed garbage they bought from trusted brokerages in the US and need central bank bailouts to stay afloat. It's just more fallout from the subprime swindle. Finance ministers in every capital in every country are getting ready for a 1930's-type typhoon that could send equities crashing and food and energy prices rocketing into the stratosphere. And it can all be traced back to the wacko doctrine of unlimited personal accumulation and its evil-spawn, neoliberalism. These are the theories that guide America's “bugger-thy-neighbor” monetary policies and spread financial turmoil to every city and hamlet around the world.

The present stewards of the system, Paulson and Bernanke, are incapable of fixing the problem because they represent the interests of the people who benefit most from the disruptions. Paulson's latest “blueprint” for the financial markets just proves the point; a more pro-business, self-serving scheme has never been put to paper. Gary North sums it up in his article “Really Stupid Loans”:

“With the Federal Reserve System's latest proposal, presented to the public by Secretary of the Treasury Henry "Goldman Sachs" Paulson, the FED is asking the United States government to make it the Great Protector of Capital....The new proposals will centralize power over finance in the hands of an agency that is officially run by the government but in fact is run by agents of the largest fractional reserve banks. ...Regulation by tenured staff economists will not make the system less fragile. It will make it more top-heavy and less flexible..

Some version of this plan will probably pass in the next Congress. No matter whether it does or does not, the direction is the same: toward an economy controlled by the federal government in conjunction with titular private ownership of the means of production, that is, toward fascism. (Gary North, “Really Stupid loans” lewrockwell.com)

That's right; Paulson and his flock of investment bank alchemists, who cooked up the poisonous stew of derivatives that paralyzed the bond market, now want congress to put the whole kit and kabootle under their authority. Right.
Michael S. Rozeff sums it all up his article “ The American Form of Government and the Paulson Plan”:

“The main result of the Paulson Plan will be increased government power over capital markets and their institutions. Certain large players will be cartelized under the enhanced regulatory umbrella. They will be under the government’s thumb. In subsequent crises, the government will move further toward capital controls and find it easier to do so.

To be totalitarian, a State needs to control investment, that is, the allocation of capital. Controlling the direction of finance is a means to control investment. That is the ultimate stopping point of government control over capital markets.” (The American Form of Government and the Paulson Plan, Michael S. Rozeff, lewrockwell.com)

And that's the whole point, to put the markets in the Fed's control so when the next financial crisis arises the Fed can bailout the bankers and hedge fund managers without consulting Congress.
Paulson's plan is a power-play pure and simple. The investment Mafia wants to control the financial system lock, stock and barrel. They want to liquidate the SEC and any other government watchdog agency and put the investment banks, hedge funds and brokerages on the honor system. It's the end of transparency and accountability which, of course, are in short supply already.

Comrade Paulson's blueprint fixes nothing. It's just another freebie for the parasite class. What the country really need is a few honest men who'll ride-herd on the Ken Lays and Jeffrey Skillings who presently run Wall Street. That doesn't require centralized power; just a rule book and a bullwhip.

Currently, Paulson and Bernanke are expanding the balance sheets of the GSEs so that Fannie Mae and Freddie Mac will underwrite 85% of all mortgages while FHA will cover 10% more. The mortgage industry is being nationalized to save banking fellowship while the taxpayer is on the hook for another $4.4 trillion of dodgy loans. It's a risky business and, once again, it's all ideologically driven. Paulson doesn't care if the taxpayer gets stuck with the bill. It's no skin off his nose. What bothers him is the prospect that, somewhere along the line, workers will demand higher wages to keep pace with inflation. Then all hell will break loose. Paulson and Co. would rather see the economy perish in a deflationary holocaust than add another farthing to a poor man's salary. He and his ilk take class warfare seriously; that's why they are winning. But their strategy also creates problems. When wages don't keep pace with production, demand decreases and the economy falters. That's what's happening now and Paulson knows it. Workers are over-extended and can't buy the things they make. They barely have enough to feed the kids and fill the tank for work. All the fat has been trimmed from the bone; there's nothing left. The only thing that's kept us from sliding into recession so far, has been the kookie banker's scam to maintain growth by easing lending standards and expanding credit. That turned out to be a real doozie; the whole thing blew up and left the banks' balance sheets ravaged and workers deeper in debt than anytime in history. Now consumer spending is nosediving at the same time the Fed's equity bubble is plummeting to earth. It looks like the plan to eliminate the standard criteria for lending money wasn't such a great idea after all. The global financial system has never been under greater strain.

Was it all part of a “vast right-wing conspiracy?”

Maybe or maybe not; it's hard to say. But neoliberalism does have a twenty-year record of producing the very same economic calamities. That's more than just a coincidence. What makes this crisis so different? The bankster globalists aren't bound by any silly feelings of patriotism. They would just as soon march the good old USA to the chopping block as any other unsuspecting nation; it makes no difference to them. It's just business as usual. After the equity bubble bursts and asset prices fall, the corporate vultures will swoop down and buy up vital resources and industries for pennies on the dollar. Its the same everywhere; Darwinian capitalism. Leave nothing but the bones behind.

Economist Michael Hudson anticipated many of the present-day developments in the financial markets in an amazingly prescient interview in counterpunch in 2003 called “The Coming Financial Reality”:

Michael Hudson: “Free enterprise under today's financial conditions threatens to bring about an unprecedented centralization of planning, not in the hands of government but by the financial conglomerates and money managers. Whatever government planning power is destroyed becomes available for them to appropriate, with plenty of vigorish left for the politicians whose campaigns they back and who will "descend from heaven" into high-paying private-sector jobs, Japanese style, after having performed their service for the new regime.

Question; Standard Schaefer: The financial regime is nothing but parasites?

Michael Hudson: “The problem with parasites is not merely that they siphon off the food and nourishment of their host, crippling its reproductive power, but that they take over the host's brain as well. The parasite tricks the host into thinking that it is feeding itself.
Something like this is happening today as the financial sector is devouring the industrial sector. Finance capital pretends that its growth is that of industrial capital formation. That is why the financial bubble is called "wealth creation," as if it were what progressive economic reformers envisioned a century ago. They condemned rent and monopoly profit, but never dreamed that the financiers would end up devouring landlord and industrialist alike. Emperors of Finance have trumped Barons of Property and Captains of Industry.” (Michael Hudson, “The Coming Financial Reality”, counterpunch)

Bingo. Hudson not only explains how finance capitalism is inserting itself into the governmental power structure but, also, predicts that “industrial capital formation”--which is the production of things that people can really use to improve their lives---will be replaced with complex debt-instruments and derivatives that add no tangible value to people's lives and merely serve to expand the wealth of an entrenched and increasingly powerful investor class.

Finance capitalism has “devoured landlord and industrialist alike” and created a galaxy of seductive liabilities which masquerade as assets. Derivatives contracts, for example, represent over $500 trillion of unregulated counterparty transactions; a “shadow banking system” completely disconnected from the underlying “real” economy, but large enough to send the world into a agonizing depression for years to come.

The goal of liberals should be to dismantle this corrupt Ponzi-system, which merely wraps debt in a ribbon, and rebuild the economy on a solid foundation of productive labor, worker solidarity and the making of tradable goods. That will restore competitiveness and reallign the political system.

Political power has to be taken from the financial mandarins or the disparity of wealth will continue to grow and democracy will wither. We've already seen our main institutions--- the courts, the congress, the media, and the presidency---polluted by the steady flow of corporate contributions which only serve the narrow interests of elites.

Henry Liu expands on this idea in his excellent article “A Panic-stricken Federal Reserve”:

“In the 1920s, the wide disparity of wealth between the rich and the average wage earner increased the vulnerability of the economy. For an economy to function with stability on a macro scale, total demand needs to equal total supply. Disparity of income eventually will result in demand deficiency, causing over supply. The extension of credit to consumers can extend the supply/demand imbalance but if credit is extended beyond the ability of income to sustain, a debt bubble will result that will inevitably burst with economic pain that can only be relieved by inflation.....More investment normally increases productivity. However, if the rewards of the increased productivity are not distributed fairly to workers, production will soon outpace demand. The search for high returns in a low demand market will lead to consumer debt bubbles with wide-spread speculation....Today, outstanding consumer credit besides home mortgages adds up to about $14 trillion, about the same as the annual GDP. ”

Voila. A strong economy requires a strong workforce and an equitable distribution of wealth. Otherwise, demand decreases and growth slows to a crawl. When money is concentrated in too few hands, the political system atrophies and becomes unresponsive to the needs of its people. That's when the nation's laws and institutions are reshaped to reflect the ambitions of rich and powerful.

Liu continues:

“A 2002 study released by Citizens for Tax Justice and the Children's Defense Fund reveals that under the Bush tax cut, over the next 10 years, the top 1% income recipients are slated to receive tax cuts totaling almost half a trillion dollars. The $477 billion in tax breaks the Bush administration has targeted to this elite group will average $342,000 each over the decade. By 2010, when (and if) the Bush tax reductions are fully in place, an astonishing 52% of the total tax cuts will go to the richest 1% whose average 2010 income will be $1.5 million.” And, this; “In 2006, the chief executives of the 500 biggest US companies averaged $15.2 million in total annual compensation, according to Forbes business magazine’s annual executive pay survey. The top eight CEOs on the Forbes list each pocketed over $100 million.” “A Panic-stricken Federal Reserve; The shape of US Populism” Henry C. K. Liu, Asia Times)

The financial system is doing exactly what it was designed to do, it is crumbling from the decades-long trickle-down experiment. Social programs have been gutted, civil infrastructure is in tatters, legal protections have been savaged, and workers rights have been trounced. Is it any wonder why we're embroiled in an unwinnable war and the financial system is on its last legs?

None of this is accidental; it is the inevitable decline of a fatally flawed ideology; the Golden Calf of neoliberalism. But what will take its place? Where are the leaders who will fill the vacuum?

Here's an excerpt from Bernard Chazelle's article “Saving the American Left; A New Progressive Creed”:

“By virtually any measure, the United States is the least progressive nation in the developed world. It trails most of Western Europe in poverty rates, life expectancy, health care, child care, infant mortality, maternity leaves, paid vacations, public infrastructure, incarceration rates, and environmental laws. The wealth gap in the US has not been so wide since 1929. The Wal-Mart founders' family owns as much as the bottom 120 million Americans combined. Contrary to received opinion, there is now less social mobility in the US than in Canada, France, Germany, and most Scandinavian countries. The European Union attracts more foreign students than the US, including twice as many from China. Its consensus-driven polity, studies indicate, has replaced the American version as the societal model to which the developing world aspires.”

America has lost its luster; it no longer attracts freedom-loving young people seeking openness and a brighter future. There are better opportunities elsewhere and less hassle. The country needs a major face-lift. Restoring liberal values is pointless without a strong commitment to economic justice; the two are inseparable. The only way to break the stranglehold of Wall Street's financial Politburo is to level the playing field through greater wealth distribution. That's the best way to rekindle democracy and make America the land of opportunity again. And it all starts with giving America's workers a raise.

[Demeter]

27. Wrong Hat

[InkAddict]

81. Spouse's employer took that advice about the raise;

on merit, no less, right before his assignment was outsourced to the Indian outfit. Never mind also the huge spending spree on that "team-building" budget-burning experience the month before, although he did get axed from the official corporate holiday celebration (more frivolous spending-be there or be square). I'm surprised they didn't also decide to give everyone spiffy new business cards too, another certain sign one's job is out the door.

Know what else happened? - the first pay period of the new rate, they shorted his hours at the correct rate (oops, sorry, you're right, they said). The second pay period of the month - they forgot what the rate was supposed to be, though it was correct the first time when they shorted the hours (must have been a computer glitch, uh-huh) - the next pay period bye-bye but they'll collect from the taxpapers for being sweet on BS.

There is an upside, no? We'll pay significantly less taxes to the Fed, the State, and our local community. You other American workers can pick up our share to pay the cops and firemen until your tax cut comes, no?

Another upside: our landlord can reap another security deposit from his next tenent and make a little more off the auction of stuff left behind that won't fit in the car.

Did you say bitter? Gee, I'm so sorry about that money mismanagement, I didn't wash my clothes in the river next to our cave, but I'm certainly glad I didn't tie anything up in a 401(k) so they could penalize me for losing my raise and charge me to access what I put in, so I could eat independent of leaning on you all more. Hope I don't get something contagious, like strep, anytime soon because I no longer will have healthcare.

Bitter??????

[UpInArms]

136. it's a bitter pill

and all I can offer up is a

:grouphug:

[UpInArms]

30. dollar watch

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

Last trade 71.692 Change -0.210 (-0.29%)

Big Week Ahead for the US Dollar

http://www.dailyfx.com/story/bio1/Big_Week_Ahead_for_the_1207951548322.html

After a quiet start to the week, volatility has returned to the currency market. The moves that we have seen over the past 2 trading days are just a taste of what we expect for the week to come. With consumer spending, inflation, manufacturing and housing market data on the calendar, the EUR/USD is prime for a breakout. The US dollar has already weakened significantly today as trouble on Wall Street spills over to the corporate sector. For the first time in 5 years, General Electric reported a quarterly drop in profit. Their Financial Division was hit the hardest as the Bear Stearns debacle forced GE to write down its assets at very low values, resulting in a 42% increase in loss provisions. Frontier Airlines also became the fourth airline to file for bankruptcy this month. The 3 others were Aloha, ATA and Skybus. Although Frontier credited their bankruptcy to “an unexpected attempt by its principal credit card processor to substantially increase a holdback of customer receipts,” rising fuel prices have contributed substantially to the failure of these 4 airlines. This proves that those economists who say core prices is the only thing that matters are wrong because prices including food and energy is crippling the global economy. The weakness of the dollar was exacerbated by the sharp drop in consumer confidence. According to the University of Michigan, consumers have not been this pessimistic in 26 years. The problems in the US labor and housing markets combined with rising prices are becoming too much for the average American to handle. On Monday, we will see whether the rise in prices will offset the contraction in consumer spending. We believe that 3 months of net job losses will make it difficult for most Americans to be liberal with their spending. Retailers around the nation have been closing shops, Kimberly-Clark Corp has increased prices on everything from Huggies diapers to Cottonelle bath tissue and even Las Vegas casinos are reporting a decrease in gaming revenues. With this in mind, we continue to expect further dollar weakness, particularly against the Japanese Yen.

...more...

Euro Erases Losses After G7 Gap Open - Will 1.60 Fall?

http://www.dailyfx.com/story/bio2/Euro_Erases_Losses_After_G7_1208167160922.html

After gapping down more than 100 points on Sunday night following the change in the G7 Statement the EURUSD erased most of its losses on the back of some bargain hunting and better than expected EZ Industrial Production data. The battle in the currency market continues to revolve around two key themes- decoupling and spillover. Euro bulls have consistently claimed that the EZ economy has separated itself from the troubles in US allowing the ECB to remain staunchly hawkish. So far they have been completely correct and the unit has benefited greatly from its interest rate advantage over the greenback which continues to expand.

The bears on the other hand, argue that the slowdown in the US will inevitably spill over into the EZ economy sooner rather than later. However, the economic data has been in the side of euro bulls and today’s Industrial Production numbers out of the EZ were no exception printing at 0.3% vs. 0.2%. European producers are growing their book of business despite the twin obstacles of high exchange rates and slowing global demand.

How long that dynamic will continue remains to be seen, but until it stops the dollar will have a hard time gaining any traction. As we noted in our weekly, “If the dollar is to see a sustained rally, traders will need to see some evidence of slowdown in the EZ. For now the G7 statement has provided a temporary boost for the buck, but it will only hold those gains if currency traders start to see some deterioration in the EZ and begin to believe that the decoupling thesis is about to crumble.”

In UK the hot PPI data which printed at 0.4% versus 0.3% on a core output basis provided only tepid support for the pound. No doubt inflationary pressures continue to persist in the UK economy and are in fact a full 100 basis points above BoE target rate of 2%, However, the slowdown in UK demand may prove to be a bigger concern to MPC members as we move towards the summer months and therefore currency markets continue to anticipate further monetary easing in Q2 of 2008.

Finally in US today, the markets will get a read on March’s Retail Sales and frankly the forecasts are subdued. Consensus calls are for a small rebound to 0.2% from –0.2% the month prior. Yet given the bleak mood surrounding the US economy even a small rise such as that may be viewed positively by the market suggesting that the US consumer has not capitulated completely. If on the other hand we see another negative reading in the report, the dollar could face new lows against the euro as they day progresses with the decoupling thesis continuing to dominate trade.

...more...

[UpInArms]

32. Pilgrim's Pride to cut wkly chicken processing 5% due to soaring feed costs

6 minutes ago Pilgrim's Pride to cut weekly chicken processing by 5% in H2 - MarketWatch

6 minutes ago Pilgrim's Pride cites soaring feed costs for production cut - MarketWatch

[Pale Blue Dot]

34. Unless I miss my guess, that means chicken prices are about to rise.

The only cheap meat left out there is about to get not so cheap.

[TalkingDog]

42. The Foreclosure Bubble.

We have "farmer" friends. They raise and assortment of rescued animals, grow some apples, and basically live out of the loop as much as is possible. They barter, do odd jobs, etc.

Farmer's wife started doing part time work for a detective a few years ago. She filed paper work, made calls and eventually started process serving for the extra money it paid. At that point it was a couple of papers a week for lawyers and people suing one another, calls to testify and so on.

The detective moved and sold the Wife the business name, equipment, contacts, etc. and she kept serving papers to keep that bit of income coming in.

Recently she's started doing the public readings for bankruptcies, declarations of ...whatever, a legal thing where it has to be read aloud on the courthouse steps. (performance art IMHO) In years previous she had never had a call to do even one. Now she's doing several a week.

The servings on Foreclosures are coming in so fast she's had to hire her own husband to help her keep up.

Recently they heard that one of the other local folks was getting out of the business and sure enough, a company calls her last week to ask if she can process more than 200 extra papers a month.

The Farmer talked about working full-time for the Wife and I cautioned him to remember that it was only a bubble. (I Hope) That eventually they would run out of people to serve foreclosures on. (I Hope).


Dark Times.

[Demeter]

49. There It Is! Blockbuster Can Go into Process Serving!

They already do robocalling, and they could justify updating the computers.

[Robbien]

45. German Politician Resigns Over His Handling of State Banking Crisis

Milbradt resigned his functions both as Saxony state premier and chairman of the Saxon Christian Democratic Union (CDU). He had been under fire within his for months, ever since the virtual collapse of Saxony's state bank.

"I have decided to hand over my official functions, because an orderly and harmonious transition is especially important to me -- and to prevent injuries -- to me and others," the 63-year-old said on Monday in Dresden.

The bank, Sachsen LB, had accumulated massive liabilities from speculating in so-called structured-finance products linked to US home mortgages. It had to be sold to another bank to save it and the bank's entire management board lost their jobs.

The state of Saxony will have big bill to bear if more problems arise at Sachsen LB. The state remains liable for most of Sachsen LB's losses, which could amount to 1.2 billion euros ($1.9 billion)

. . .

Milbradt also faced heavy criticism over private investments he and his wife carried out through Sachsen LB. Critics dubbed them dubious, though the state government said they were legal.

http://www.dw-world.de/dw/article/0,2144,3265254,00.html

Someone actually admitting to some blame in this mess?

[UpInArms]

46. AP poll: More avoid buying homes

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

WASHINGTON - A growing majority say they won't buy a home anytime soon, the latest sign of increasing pessimism about the nation's housing crisis, a poll showed Monday.

In a vivid sketch of how the sputtering real estate market is causing distress throughout the country, the Associated Press-AOL Money & Finance poll found that more than a quarter of homeowners worry their home will lose value over the next two years. Fully one in seven mortgage holders fear they won't be able to make their monthly payments on time over the next six months.

"This is a great time to buy, but not necessarily to sell," said Robert Jackson, who lives in a two-bedroom house in Ferguson, Mo., with his wife and four young children. He said he would love to purchase a larger home, but can't because even if he found a buyer, he would probably lose thousands on his house, which he bought less than two years ago.

<snip>

Daniel Gallego, a warehouse worker in Stockton, Calif., said he may have to sell his home at a big loss. He said rising gasoline and other costs have made his adjustable rate mortgage unaffordable. Because he doesn't expect his home's value to recover soon, he said he may be better off moving now, before his rates rise.

"We may have to move in with my wife's parents or my parents," said Gallego, 30, who has two young children. "I could pay off some debt, then we could rent, and maybe buy another house in a few years."

...more...

[Demeter]

50. After the Recession: What then?

http://angrybear.blogspot.com/2008/04/after-recession-what-then.html


...Nouriel Roubini predicts that the coming recession will be a U, not an easy recovery. Calculated Risk predicts it will be a W, a double dip recession. Others see the traditional V. I suggest we may be in for something worse. No letter the alphabet quite captures it. The only image that comes to mind is that of a slinky sliding down stairs, each deeper fall accompanied by a short rise.

What we have to ask ourselves is: What is the engine that will pull us out? What is it that we can trade? In order to compete globally, we must have something to offer the rest of the world, something to trade...Can we look to some dimension of our service sector for help?

In 2004, the IMF argued that the U.S. indeed had something to trade: Financial and business services—American know-how. In that argument, the IMF acknowledged that there were problems in the U.S. labor market:

The McKinsey report indicated that more than 69 percent of workers who lost jobs due to imports in the United States between 1979 and 1999 were re-employed (this is based on U.S. Bureau of Labor Statistics data). Of course, this means that 31 per cent were not re-employed, highlighting that there may be some rigidities in the labor market.


However, the IMF maintained that, as of 2004, the U.S. was the recipient of substantial global outsourcing in terms of services. In short, from one point of view, the U.S. had a substantial trade balance in terms of some kinds of services. These more than compensated for the fall in material goods... we look at the trade data in two categories of services that have been most intensely reported: computer and information services and other business services. In value terms, other business services (which we will refer to as just business services) are by far the larger of the two categories.



In terms of “business services,” the IMF said that the U.S. was the largest exporter. Or, to put the matter another way, the U.S., was the biggest insourcer or recipient of global outsourcing. In short, the U.S. had become a successful service society, especially in the area of business and financial acumen, despite its increasing material trade deficit.

As one writer in the National Bureau of Economic Research so aptly wrote:

First, consider the amount of 'insourcing', that is, the value of business services exported by a country like the US. Clearly, this is considerable - think of all the high-priced business consultants and lawyers in rich countries offering their services to the rest of the world.


Without being too ironic, I think we can safely assert that many of “business consultants” have been a bit too innovative of late. All of them—Bear Stearns, Merrill Lynch, CitiGroup, et al—were our great money makers: What we had to trade. It made some people very rich; those in the middle and at the bottom it left behind. But, as I said earlier, much of that wealth creation was a mirage, built on quicksand. Easy come; easy go.

We may fix that particular engine. First, we will rescue it (bail it out); then we must properly regulate and oversee it. But even if that service industry functions properly, it will never again be that marvelous wealth creator we thought it to be. Its accoutrements will be a bit more modest.

Which leaves us with again with the real question: Where or what is the engine that will pull us out of recession and once again into the light? This time, will we design and build an engine that profits all of us?

Frankly, I think we are going to be asking that question for quite a while. Meanwhile, prepare to watch the slinky purr its way to the bottom step.



ANYBODY WANT TO BUY A FINANCIAL SERVICE FROM A US BANK OR INVESTMENT HOUSE??

I THOUGHT NOT. FOOL ME ONCE, AND ALL THAT.

[Tansy_Gold]

68. Alphabet soup

After dealing with CDOs and SIVs and MBSes, etc., we're now confronted with the reality of a "recession" that may be a U or a V or a W.

What happens if it turns out to be an L?



Tansy Gold, thinking about what we may really have to look forward to

[Demeter]

70. FDR Left Us a Great Recipe Book for Alphabet Soup!

My grandfather was in CCC and WPA programs. My elementary school was built by one, too.

[TalkingDog]

94. Stone Soup today, Stone Soup tomorrow.

There's always Stone Soup.

[AnneD]

95. In the medical biz...

we talk about the sign of the Q......when a person expires and their tongue hangs out. They're uncodable at that point. I think that can have eCONomic applications too. If things are unstable, we say the patient is going to Chicago-don't know why but we have lots of theories on that.


Apologies for the black humour-it's what keeps us sane after some shifts.

[Demeter]

120. Going to Chicago Is EXACTLY What Happened to US Economy!

Alas.

[Demeter]

51. The Consumer Spending Mirage--Business Week

http://www.businessweek.com/magazine/content/08_16/b4080000602263.htm

Interesting video report and analysis at link.

[Demeter]

52. "1929 once more?"

http://www.nakedcapitalism.com/2008/04/1929-once-more.html

Ann Pettifor argues in The Guardian's Comment is Free discusses some misperceptions about our current economic crisis and argues that the wrong lessons are being drawn from 1929. She writes from a UK vantage but much of the discussion is relevant to the US:

In debates about the financial crisis - on the left and right - there are five oft-repeated economic fallacies.

The first of these is that 'economic fundamentals are sound' and that the crisis is limited to a finance sector previously celebrated as vital to prosperity but now somehow detached from the real economy. The second is that the crisis is caused by 'turbulence' in the housing market. The third: that the crisis was caused by low rates of interest, in particular monetary easing since 2001. The fourth: that the UK government was guilty of profligacy during the good years. The fifth: that we should remain fearful of inflation.

These fallacies arise because our leaders have not learned from parallels in history; and because they refuse to correctly analyse the long process that has led us to the end-game that is today's systemic crisis.

The parallel with the Great Depression is frequently drawn, while parallel events that were the cause of the disaster are ignored. After 1918 policymakers liberalised finance under the banner of the gold standard. Winston Churchill reflected on the consequences:

"The year 1929 reached almost the end... under the promise and appearance of increasing prosperity, particularly in the United States. But in October a sudden and violent tempest swept over Wall Street......... The whole wealth so swiftly gathered in the paper values of previous years vanished. The prosperity of millions of American homes had grown up a gigantic structure of inflated credit, now suddenly proved phantom. Apart from the nation-wide speculation in shares which even the most famous banks had encouraged by easy loans, a vast system of purchase by instalment of houses, furniture, cars and numberless kinds of household conveniences and indulgences had grown up. All now fell together."

For a brief period, lessons were learned. John Maynard Keynes worked with politicians and policymakers to develop a new financial order for the world, with interest rates low and the financial sector returned to its role as servant, not master of the global economy. The Bretton Woods Agreement was not his ideal, but it led to a 'golden age' of prosperity unknown before or since.

Tragically, in the 1970s politicians capitulated again to the lobbying of bankers, and set in motion that which caused the Great Depression - financial liberalisation. As in the 20s, the result has been a 'gigantic structure of inflated credit'. Bankers have lent huge sums at high, not low rates of interest. Very crudely, after adjusting for inflation, rates could be said to have doubled. High interest rates do not inhibit borrowing, but they greatly reduce the probability of repayment.

As a consequence, many firms and households over-extended themselves, and are laden with debts that ultimately cannot be repaid. This is a crisis of insolvency.

Over the same period crises became endemic worldwide. Economies collapsed in poor countries and emerging markets, but also most notably, Japan. The present Anglo-American credit crunch is rooted in the private investment collapse of 2001 - the bursting of the dot-com boom. By 2001, financing to firms had dried up because of solvency fears. Monetary easing and fiscal relaxation by Greenspan and others were a reaction to this crisis; the beginning of the end-game. Few criticised them at the time. "Essentially we took the view that unbalanced growth was better than no growth at all - which was the only other option we had," the Governor of the Bank of England remarked in 2003.

Households and governments were encouraged to join the corporate sector's plunge into debt to rescue policymakers - 'guardians of the nation's finances' - from the consequences of financial liberalisation. The low rates of interest that powered the household boom are a consequence, not a cause of the crisis. However cheap and easy money was a privilege reserved mainly for financial intermediaries. Bankers lent to financial institutions at cheap rates. These in turn made 'easy' loans available, but often at much higher interest rates to firms and consumers. 'Teaser' and NINJA loans (no income no job or assets) became notorious, and real rates of interest paid on mortgages, credit cards etc were much higher than base rates.

Government profligacy was backed because it played a role in keeping the economy afloat through the years of the end-game. Now household and corporate debt, viewed as a share of income are at unprecedented levels in both the US and UK, and government debt is on the rise from already relatively high levels.

On 'Debtonation 9807' day, the finance sector finally publicly admitted that a mountain of the debts/assets on its books was bad. That many borrowers were insolvent, with sub-prime debt merely the tip of the iceberg. The consequence, as Irving Fisher analysed in 1933, will be a debt-deflationary Depression - not inflation.

Despite higher oil prices UK headline inflation was just 2.5% in March. But the core rate is falling. In March it fell again, to 1.2%, and since June 2007 it has fallen 0.8%. One has only to walk the high street to witness endless sales, special offers and two for one bargains to note that the real threat to businesses is not inflation - but deflation. Asia and emerging markets have aimed their economic capacity at providing goods and services for British and American consumers. Anglo-American recessions will cut back consumption and render this capacity spare. Factories and labour will become idle, prices will fall and deflation, not inflation, will haunt the global economy.

Sadly, economic fallacies continue to stand in the way of sensible policy-making. The Governor of the Bank of England, for example, in recent evidence to Parliament refused to concede the existence of a solvency crisis and even regards a slowdown in economic growth as helpful in reducing inflation.

In the 1930s it took driven individuals to understand the scale and systemic nature of economic failure, to get a grip on finance, to regulate lending and to subordinate the sector to the interests of the nation and the economy as a whole. At that point it was possible to apply economic remedies. In Britain we had the wise leadership of John Maynard Keynes and the US had President Roosevelt.

Their leadership drew on lessons from the past, and on a correct analysis of the crisis, not on economic fallacies.

[Demeter]

54. Recession, Depression, Collapse:What's Fear Got To Do With It? By Carolyn Baker

http://www.informationclearinghouse.info/article19731.htm

13/04/08 "ICH" -- - Interesting, isn't it, that mainstream economists need a so-called economic guru like Alan Greenspan to confirm that the U.S. economy is in recession? If the maestro says it is so, then it is. If he doesn't, then the "downturn" has a silver lining. And now we have the Treasury Secretary, Hank Paulson, stating what the American public has known all too well during the past year: "The economy has taken a sharp downturn." Gee, Mr. Paulson, you get the understatement of the year award because what Americans have also discovered is that the middle class is now almost extinct after only a few decades of having one-thanks to you and your friends at Goldman Sachs.

No one walking away from a foreclosed home, no one declaring bankruptcy, no uninsured person staring in the face tens or hundreds of thousands of dollars in medical bills needs a maestro or any other member of the ruling elite to tell them that not only are we in a recession, but we are on a fast-track to a depression that is going to make 1929 look like living in the lap of luxury. It's called the collapse of Western civilization, and it is well underway.

Oh, you don't like my use of the word "collapse"? Then please listen up.

One of the most inspiring but also heart-wrenching stories I've seen this past week when Truth To Power was in the midst of its spring fundraiser and was not reporting much news was the CBS report on Tennessee-based Remote Area Medical's efforts to bring health and dental care to the uninsured or underinsured not only throughout the world, but now more than ever, in the U.S. As I watched this must-see video clip, my heart soared, even as I wept. What was confirmed in every cell of my body was that the American healthcare system has already collapsed, and that every other institution in this nation is rapidly succumbing to the domino effect of empire's unequivocal unraveling. Watch the CBS report for yourself, and I'm certain you will agree.

In looking honestly at these realities, it is impossible not to feel fearful, and some may once again accuse me of fear-mongering. However, I argue that fear is not necessarily a negative emotion or an unproductive waste of energy. I'm not talking about fear for the sake of fear, but rather, fear as a motivator-fear as a force that compels us to act.

Gavin De Becker's 1997 book The Gift Of Fear was written to assist readers in detecting violent behavior in the workplace, in the street, or in the home, for the purpose of protecting themselves. In contemplating collapse we are not dealing up close and personal with violence-at least not in this stage of collapse, as much as we are attempting to read the signals it is sending so that we may wisely prepare ourselves for navigating it. Among the author's suggestions are:

* Recognizing the survival signals that warn us of impending danger
* Relying on our intuition
* Separating real from imagined danger
* Moving beyond denial so that one can tune in to one's intuition

As we witness collapse and experience its impact on our lives, the fundamental concept of De Becker's book may serve us well. He argues that fear is an evolutionary gift imbedded in our DNA for the purpose of assisting our survival. Becoming overwhelmed with it or wallowing in it is indeed not useful, but neither is attempting to hermetically seal ourselves off from it. In fact, as De Becker argues, fear helps us move out of denial so that we can really tune into our intuition which facilitates our becoming proactive on our own behalf. What we need is not exemption from fear but a way of integrating it into our current reality in balance with other emotions.

What I want the reader to understand is that collapse is already happening. Your resentment of the word doesn't change the fact that it is occurring. Like Greenspan and Paulson, we all have the option of masking the realities of meltdown and continuing to wait for someone or something to "prove" to us that the world as we have known it is over.

Is talking about collapse scary? You bet. Does that mean we should avoid the word or "re-frame" it into something more "acceptable." Only if we insist on living in denial. If we feel fear about collapse, does that mean that we are "living in fear"? Only if we feel nothing else about it except fear and allow the fear to paralyze us.

OK, so collapse is happening, it's real, and it's going to get worse. So now what? How can I utilize that fear to take action? Keeping in mind that this is all scary to talk about, let's feel the fear and keep talking.

The first step, in my opinion, is to take a long, hard look at what action, in the face of the collapse of Western civilization, is realistic and truly useful. I believe we must approach this on two levels. First, what will actually make a difference in the world at large? Will using cloth shopping bags, changing my light bulbs, or shopping locally make a difference in the macrocosm? Quite frankly, probably not, although these may facilitate one's adaptation to a drastically new way of life and make that transition less traumatic. But then I must ask myself what my intention is. Am I trying to prevent the collapse that is already in progress? Am I trying to make it less severe than if I did nothing? Do I think I have some control over the collapse missile now that it has been launched and probably has a life of its own? If I don't have control-if control of the macrocosmic outcome isn't even possible, how does that feel? Even more scary? OK, so let's step back from the macrocosm for a moment and make this more personal.

Let's address the second level, my personal and immediate milieu. Who and what is in my personal world? Who do I love and trust and want to share my life with? What fears come up as I think about this? Fear that I can't talk to them about collapse? Fear that I will lose them, and they will lose me? Fear of separation from loved ones? Fear of making major changes like relocation, scaling down, bankruptcy, losing insurance, quitting a job or losing it?

Ooops, I think we've hit the big one: Fear of death-well, maybe not literal death, maybe not the "big one" but fear of the "little deaths" of loss which may feel like the "big death" of our own extinction. OK, time to take several deep breaths.

As we hit this rock-bottom fear, we must now ask ourselves if our ultimate objective in facing, talking about, and preparing for collapse is pure survival, or if it's larger than that. You see, this is the part that many people who are talking about "collapse preparation" fail to discuss. It's much easier to talk about stockpiling food and water or where one is going to invest one's money or how one is going to purchase precious metals or what skills one needs to learn for survival. It is far more risky and scary to talk about emotional and spiritual preparation for collapse. All of the other preparations are pretty much about making rational decisions based on adequate information. But when we begin preparing our souls for collapse, we're in a completely different dimension, and I argue, the most frightening as well as the most replete with potential. Potential for what?

The moment we begin discussing collapse and the notion of preparing for or surviving it, we enter the territory of meaning and purpose. Like someone stranded on a desert island or trapped in a downed airplane miles from nowhere, we are faced with those troubling "Who am I?" and "Why am I here?" questions that civilization has so masterfully assisted us in escaping. It is because humans have evaded and avoided dealing with those questions that we have created cesspools of government and financial corruption, the depletion of virtually all of earth's resources, the extinction of 200 species per day, oceanic dead zones the size of some states, the horror of genetically modified foods, and the destruction of our own and the earth's immune systems.

In a recent teleseminar offered by Life After The Oil Crash, Dmitry Orlov, author of the forthcoming Re-Inventing Collapse and a series of articles highlighting the similarities between the collapse of the Soviet Union and the collapse of the U.S., stated that more important than figuring out where we're going to put our money or deciding where we might relocate is our psychological preparation for collapse. If we are not working on that aspect of preparation, then we are likely to discover that other forms of preparation do not fortify us in the ways we had hoped.

If we continue to avoid dealing with the reality of collapse, we get to escape those troubling "Who am I and why am I here?" questions a little longer and thereby perpetuate the underlying cause of the nightmares we have created for ourselves and for succeeding generations. On the other hand, if we are willing to talk about collapse, live and work with it alongside all of the other aspects of our lives that bring us joy and meaning, we open ourselves to a stunning opportunity that we may never have discovered were it not for the end of the world as we have known it.

There is very little we can do about collapse, but there is much that we can do with it. That does not necessarily mean that we can create a clean, compassionate, just, humane planet in our lifetime. I believe that to presume we can do so without the demise of Western civilization is an illusion. Unfortunately, empire has set the earth community up for dissolution, and collapse will bring forth the "great sorting out" but hardly in ways we'd prefer.

....
The world we wanted to have is not within our reach; the world we deeply dread is upon us. Meanwhile, the world we have known, ugly as it may be but nevertheless familiar, is vanishing before our eyes. Herein lies an opportunity to experience deeper layers of who we really are and what we are really made of. Collapse is compelling us to confront these issues, whether we want to or feel ready to do so or not. While I do not welcome the suffering this will entail, I do welcome the transformation of human consciousness and thus the evolutionary quantum leap it may offer us. For a deeper understanding of this metamorphosis, I highly recommend an article that Truth To Power sent to subscribers earlier this week by Sarah Edwards and Linda Buzell entitled, "The Waking Up Synrdome." It confirms that instead of being the enemy, fear may be a powerful ally. If we can face the fear and take action, we may be able to "build the great arch of unimagined bridges."

Carolyn Baker is an adjunct professor of history, a former psychotherapist, an author, and a student of mythology and ritual. Visit her web site. http://carolynbaker.net/

[Demeter]

56. An Economy Built On Lies by Gary North: 2 excerpts

http://www.lewrockwell.com/north/north619.html


THE GREAT AMERICAN DREAM

We all remember the 1946 movie, It's a Wonderful Life. It centers around one family's funding of the great American dream: home ownership. We love the movie because it's about a man who is shown by an angel that his life really mattered. So, our lives really matter, too. We all like to believe that we also have a guardian angel, though perhaps not so incompetent as Clarence.

Jimmy Stewart's nemesis was the town's banker, Mr. Potter. He was a liar and a thief, preying on sin-loving local citizens (as we see in the sequence about Pottersville) and the likes of the kindly but imbecilic Uncle Billy.

Potter used the fractional reserve banking system to borrow short and lend medium. The Bedford Falls Building and Loan borrowed short and lent long.

Potter was able to survive the bank run because his bank had liquid reserves and assets it could sell. The Building and Loan survived because George Bailey had liquid reserves – his honeymoon money – and a script writer who ended the bank run at 6 p.m. and did not let it extend to the next day, which it obviously would have done when word got out that Jimmy's honeymoon money was gone.

Potter was a liar: he was lent medium. George Bailey was a much bigger liar: he was lent long.

The Federal Deposit Insurance Corporation was created in 1933 by the Roosevelt Administration as part of the Glass-Steagall Act. This bailed out the mini-liars: bankers. The Savings and Loan oligopoly then pressured Congress to provide something similar, which Congress delivered: the Federal Savings & Loan Corporation was created by the National Housing Act of 1934. This bailed out the bigger liars.

The American dream was extended to the masses by means of government insurance against runs by investors – who mistakenly thought they were depositors – in Savings & Loans. This did more to establish the economics of the carry trade – borrowing short to lend long – than anything in history. The investment world saw the profit potential. The carry trade has increased ever since.

But who will insure the middlemen who profit from the carry trade? Who has sufficient resources to bail out the profit-seeking, loss-avoiding hedge fund entrepreneurs who decided that the interest rate spread between short-term money paid to investment banks and long-term money paid by borrowers was just too tempting. In short, who will come to the rescue of our generation of George Baileys? Congress? It did in 1986 during the S&L collapse. But the on-budget Federal deficit is running at an estimated $410 billion this year. This deficit is accelerating. Then how about the Federal Reserve System? It can swap Treasury debt for not-statistically-safe-after-all mortgages, but only until it runs out of Treasury debt, about $800 billion to go. Then it will have to create money. Lots and lots of money.



CHOOSE YOUR LIARS CAREFULLY

The modern economy is built on debt. It is therefore built on promises to pay. It is therefore built on lies.

As investors, we must look at the dominoes and try to get out from under the next one to topple.

If all of them topple, the division of labor will collapse. Then most of us will die. Think of a world without digital money. The trains would stop rolling. The trucks would stop rolling. The government would intervene and force some deliveries, such as coal to power plants in large cities. But the government would also have a problem: how to pay the bureaucrats and troops.

So, most of us cannot plan for a complete collapse of banking. That would bring down Western civilization. We have to assume that some lies will still be accepted, that some promises will be kept.

But which ones?

I think it is wise to have reserves that are not digital. You can't eat digits. But if your neighbors are starving, reserves won't help much. This is why you should not try to prepare for complete collapse today. You can't afford it.

I hope you have the familiar six months' of expenses in reserve. You could lose your job. If you don't, what about your spouse?

Today, most American families have about 19 days' worth of expenses. The chart on this decline since the year 2000 is shocking.

You must not follow the herd on this one.

CONCLUSION

The tissue of lies that held together the subprime market was believed by the best and the brightest. They were blind to what was coming. It has wiped out over $200 billion in assets.

We are assured that the worst is over. But who assures us of this? Salaried reporters in a dying field: newspapers and network TV.

The ill-informed tout the liars. We are assured that the liars know what went wrong and will not let it happen again.

Re-read the liars' law. That will give you some indication of how serious the liars were. They are no more serious today.

When they tell you the worst is over, batten down the hatches.

Gary North is the author of Mises on Money. Visit http://www.garynorth.com. He is also the author of a free 20-volume series, An Economic Commentary on the Bible.

[wovenpaint]

91. I think that this article is worthy of it's own thread.

Thank you for posting it.
There are a lot of concepts, etc. discussed that I've been thinking
about as I read (lurk:D) and learn from the SMW lately.
To the regular posters here....:yourock:

[UpInArms]

53. Friday after the bell newsdump - Citi and Merrill writing down billions - Deutsche saddled with $55B

4/13 Citi plans $10B subprime charges, analysts say: UK Times

4/13 Merrill plans $5B subprime charges, analysts say: UK Times

4/13 Citi Q1 loss may be $3B; Merrill loss seen $2.7B: UK Times

4/13 Deutsche Bank selling part of $55B `toxic debt': UK Times

[AnneD]

97. Thanks....

that may well have to be a regular feature of SWT as they are starting to do more of it....

[Demeter]

57. Frontier Airlines, The Latest Credit Card Victim

http://www.portfolio.com/views/blogs/market-movers/2008/04/11/frontier-airlines-the-latest-credit-card-victim

I'm well aware that there's no such thing as a free lunch. But some things come close, at least to the untrained eye, and one of them is the insurance that you get whenever you buy something on a credit card. It doesn't matter if you bought a toaster or an airline ticket: if the machine doesn't work or the airline suddenly ain't flying for some reason, then you're likely much better off if you bought with plastic rather than paying in cash.

Well, it turns out that the insurance isn't free after all, and it's not (just) a way for the credit-card companies to get you to use your card more. They also get to withhold money from vendors, and even push them into bankruptcy as a result. Here's Sean Menke, the CEO of Frontier Airlines:

"Our principal credit card processor, very recently and unexpectedly informed us that, beginning on April 11, it intended to start withholding significant proceeds received from the sale of Frontier tickets. This change in established practices would have represented a material change to our cash forecasts and business plan. Unchecked, it would have put severe restraints on Frontier's liquidity and would have made it impossible for us to continue normal operations."

Yep, never mind jet fuel, it's credit card withholding which did for Frontier. JP Morgan analyst Jamie Baker explains what's going on to Ann Keeton:

Typically, credit card processors turn over revenue to airlines in a couple of days, Baker said. But they can sign agreements with financially weak airlines, such as Frontier, to hold back a percentage of revenue from the time a ticket is purchased until the passenger takes the flight.

That percentage, it turns out, can be very high. The NYT again:

In its court petition, Frontier said that First Data had notified the airline that it was increasing the amount of collateral it required to $130 million from $54.5 million and that it would retain 50 percent of the airline's bank card sales.

In other words, Frontier's credit-card cashflow was being slashed in half, on top of a requirement to post an extra $75 million in collateral. You can see how a demand like that could force Frontier to declare bankruptcy.

I'm assuming, here, that the withholding is connected somehow to the insurance, and that First Data would have been liable to repay those fares if Frontier cancelled its flights. Is that indeed the case? Is there something online which explains how this all works?

[Demeter]

58. Fed Is Not King Midas

http://globaleconomicanalysis.blogspot.com/2008/04/fed-is-not-king-midas.html

Before we get to King Midas, let's recap the Fed's previous attempts to turn trash into gold via lending facilities.

* In the Term Auction Facility TAF, the Fed (via auction) swaps cash for questionable securities. This facility is for banks.
* In the Term Securities Lending Facility TSLF, the Fed swaps treasuries for questionable securities. This facility is for banks.
* In the Primary Dealer Credit Facility PDCF, the Fed swaps treasuries for questionable securities. This facility is for broker dealers.

In Failures of the Term Auction Facility, I showed how and why the facilities were failing to accomplish their mission. Simply put, banks do not trust each other, so they are unwilling to lend to each other except at an unusually wide premium. Instead of encouraging more bank to bank lending, the Fed has simply become a dumping ground for all the garbage mortgage backed securities no one wants to hold.

Dumping Ground Creativity

Yesterday in the Fed's Swap-O-Rama Gets Crazier I noted that banks and broker dealers are bundling up high-yield, high-risk corporate loans for which there is no market into Collateralized Loan Obligations (CLOs) for the express purpose of swapping with the Fed.

This is just the kind of thing that leads to more abuse and more mistrust, and the Fed's balance sheet is rapidly filling up with garbage. This sad situation was discussed in The Fed Is Terrified.

The Insanity Of Reverse Swaps

Now some would be geniuses are touting the Benefits of the Fed Doing Reverse MBS Swaps.

As reported by The Wall Street Journal, one of the more remote contingencies the Federal Reserve has considered is a mirror image of the Term Securities Lending Facility: it would take the mortgage backed securities pledged to it by dealers in return for Treasurys; then repledge them to other dealers, taking Treasurys back. Since the Fed is highly unlikely to fail, dealers might be more comfortable accepting MBS as collateral from the Fed than from other parties. But this might be complicated to do if the MBS are held by a custodial bank as is typical in a triparty repo.

Lou Crandall of Wrightson Associates thinks it’s cool idea.

This is not cool, it's absurd. It's scary that anyone could think this could possibly work. Let's chart this out mathematically.

Case #1
Citigroup swaps garbage with the Fed for treasuries.
The Fed swaps the same garbage with Citigroup for its treasuries back.
This is supposed to accomplish something?

Case #2
Citigroup swaps garbage with the Fed for treasuries.
Lehman swaps garbage with the Fed for treasuries.
The Fed swaps Lehman's garbage with Citigroup to get treasuries back.
The Fed swaps Citigroup's garbage with Lehman to get treasuries back.
Lehman holds Citigroup's garbage.
Citigroup holds Lehman's garbage.
This is supposed to accomplish something?

Lou Crandall Writes: The reverse swap is intriguing because it is sufficiently exotic that it might sidestep some of the traditional legal issues. My hat is off to whoever thought of it. That is one option that hadn’t occurred to me. The Fed could provide guarantees in the financing market that would substantially expand its balance sheet resources through the equivalent of a matched-book operation. With sufficient leverage, they could revalidate a huge range of privately-financed mortgage debt.

Amazing!

More amazing still is because of triparty collateral agreements there are logistical hurdles to clear. Apparently everyone is assuming that the moment the Fed touches something that it is good as gold. That's one hell of an assumption.

Wouldn't it be much simpler to have the Fed guarantee the debt and forget all this swapping madness? No I do not want that to happen, I am just stating the insanity of all this swapping if the only purpose is to get the "Midas Touch" from the Fed.

Logically speaking, this proposal would have the Fed guarantee all bank and broker dealer debt simply by touching it. And this is not a "cool idea", it's insanity. The Fed is not King Midas.

[Demeter]

59. For sale: the video archive Wal-Mart should have erased

http://www.independent.co.uk/news/world/americas/for-sale-the-video-archive-walmart-should-have-erased-807813.html

By Andrew Gumbel in Los Angeles
Friday, 11 April 2008

The tape recordings that Richard Nixon made, almost obsessively, of everything that went on in the Oval Office helped bring down his presidency. And now a similarly thorough archive of video footage threatens to create a world of embarrassment – and legal liability – for Wal-Mart, the world's largest retailer.

About 15,000 videotapes of Wal-Mart executives at work and at play over the past 30 years have suddenly become available to the public thanks to a series of blunders by the retail giant – which paid too little attention to the company it hired to make the tapes before abruptly terminating their relationship two years ago.

The company, Flagler Productions Inc, depended on Wal-Mart for 90 per cent of its revenue at the time the plug was pulled in 2006, and had just moved into a new 20,000 sq ft building in its home base of Lenexa, Kansas.

At first Flagler thought it was facing bankruptcy, but then realised the footage it was sitting on could be a goldmine. It offered the tapes to Wal-Mart, but the retail giant was willing to pay just $500,000 for the lot, and Flagler turned the offer down.

Now they are available – for a price – to researchers, labour rights campaigners and lawyers looking for dirt of all kinds. It's turning into quite a lucrative business.

A Kansas City lawyer representing a 12-year-old boy who suffered extensive burns when a gasoline can bought at Wal-Mart blew up in her face was astounded – and delighted – to find footage of employees making jokes about their gasoline cans blowing up at a Christmas party.

The lawyer, Diane Breneman, is hoping to present that footage in court to challenge Wal-Mart's claim that it couldn't have known the gasoline cans it sells "presented any reasonable foreseeable risk".

Another lawyer pursuing a multibillion-dollar sex discrimination lawsuit has found clips of Sam Walton, Wal-Mart's founder, and other top company officials lamenting the lack of women executives – sentiments that the lawyer believes bolster his argument that Wal-Mart knew of the problem but failed to act.

The archive also includes footage of Hillary Clinton, who served on Wal-Mart's board from 1986 to 1992, praising the company to the skies – a position she has since sought to mute.

"I'm so proud of this company and everything it represents," Mrs Clinton said at a store opening in Arkansas in 1991. "It makes me feel real good about what we've been able to do."

The archive came to light when Ms Breneman, the Kansas City lawyer in the gasoline can case, stumbled on an internet job posting from an ex-Flagler worker citing experience with a library of Wal-Mart videotapes. Not knowing what the tapes might contain, she subpoenaed the lot.

Flagler explained the library was far too big to bring to a law office, so Ms Breneman went to the small office that Flagler now operates from and started going through some of the footage. To her astonishment, much was of closed meetings and executives in unguarded moments. The tapes, she said, covered "everything anyone would want on Wal-Mart".

Astonishingly, Wal-Mart never drew up a written contract with Flagler to establish who owns the tapes.

Flagler is now cashing in, charging $250 a time for video research, and there are plenty of takers.

[DemReadingDU]

61. Wow,

I bet Wal-Mart wished they had bought those tapes for $500,000.

This is truly a goldmine.



:evilgrin:

[Demeter]

63. Technology Is a Wonder

It's the only weapon we geeks have against stupid greedy people.

[DemReadingDU]

66. Videos!

video, NBC with Brian Williams
http://youtube.com/watch?v=6vPxtis-vUo


ABC news video (edit: 4 videos)
http://abcnews.go.com/Blotter/story?id=4619734&page=1

Wal-Mart Exposed: Videos You Were Never Meant To See
Videos From Inside Wal-Mart's Corporate Meetings Are For Sale To Willing Buyers
By RHONDA SCHWARTZ and MADDY SAUER
April 9, 2008—

From the tough anti-union talk to the wilder side of men in drag, videos of Wal-Mart corporate meetings are being sold to willing buyers, and the corporate behemoth is not happy about it.

The videos, thousands of them spanning three decades, are in the library of a production company in Lenexa, Kan. Flagler Productions Inc. was hired on a handshake deal by Wal-Mart in the 1970s to produce and film corporate sales meetings and other company events.

After receiving a verbal commitment that Flagler would be used for meetings in the future, Wal-Mart abruptly ended its deal with Flagler in 2006 causing the company to lay off most of their employees, according to Flagler. Representatives from Wal-Mart tried to buy the library in 2007, but Flagler and Wal-Mart could not agree on a price so the sale never happened.

Now, Flagler is offering the tapes to anyone else who might be interested, including the media and plaintiffs' attorneys.

Wal-Mart is currently defending itself in a lawsuit that claims widespread sex discrimination regarding issues of salary and promotional opportunities on behalf of at least 1.6 million female employees.

The attorney representing the female employees, Joe Sellers, says that some videos show the company acknowledged there was a lack of women in management back in the late 1980s.

"There's no question these videos capture in a fairly candid way the sentiment of top executives many years ago," Sellers said. "This is not new, and it is not something that top management was unaware of."

Indeed, in one video obtained by ABCNews.com, Wal-Mart founder Sam Walton addresses the issue at a shareholders meeting in 1987. "We know we haven't gotten as far as we'd like to be advancing women in our company. But we're very conscious of it," he says.

Wal-Mart released this statement to ABCNews.com today. "Needless to say, we did not pay Flagler Productions to tape internal meetings with this aftermarket in mind. It's definitely an unusual business model on their end, and we can't imagine too many other clients will be eager to pay for this service."

Wal-Mart has also stated previously that it is confident it did not discriminate against female employees.

Aside from the serious allegations of discrimination, the videos also show a glimpse of corporate shenanigans, including one meeting at which male employees dressed in ladies lingerie and sang a song, "Walkin' Round in Women's Underwear" to the tune of "Walking in a Winter Wonderland."

Wal-Mart said the act was just for fun. "Over the years these internal meetings included a wide range of messages and activity -- some practical, some inspirational and some just plain silly. Clearly this video falls in the silly category, but having fun is just part of running a business," said a company spokesperson.

In January, ABCNews.com reported on videos dating back to when Hillary Clinton was on the board of directors at Wal-Mart. In her six years on the board, Clinton remained silent as the world's largest retailer waged a major campaign against labor unions seeking to represent store workers.

Wal-Mart's anti-union efforts were headed by one of Clinton's fellow board members, John Tate, a Wal-Mart executive vice president who also served on the board with Clinton for four of her six years.

Tate was fond of repeating, as he did at a managers' meeting in 2004 after his retirement, what he said was his favorite phrase, "Labor unions are nothing but bloodsucking parasites living off the productive labor of people who work for a living."

Wal-Mart says Tate's comments "were his own and do not reflect Wal-Mart's views."

The Clinton campaign has since stated, "As president, she will fight alongside labor to promote the economic growth of America's middle class," and that Clinton strongly believes that Wal-Mart employees should be allowed to unionize.
http://abcnews.go.com/print?id=4619734

[Demeter]

60. Windows is 'collapsing,' Gartner analysts warn: The researchers damn Windows in current form, urge r

http://www.computerworld.com.au/index.php/id;1870375122;fp;;fpid;;pf;1

Windows is 'collapsing,' Gartner analysts warn: The researchers damn Windows in current form, urge radical changes

Gregg Keizer 11/04/2008 07:20:42

Calling the situation "untenable" and describing Windows as "collapsing," a pair of Gartner analysts this week said Microsoft must make radical changes to the operating system or risk becoming a has-been. In a presentation at a Gartner-sponsored conference in Las Vegas, analysts Michael Silver and Neil MacDonald said Microsoft has not responded to the market, is overburdened by nearly two decades of legacy code and decisions and faces serious competition on a whole host of fronts that will make Windows moot unless the Redmond, Washington developer acts. "For Microsoft, its ecosystem and its customers, the situation is untenable," said Silver and MacDonald in their prepared presentation, titled "Windows Is Collapsing: How What Comes Next Will Improve."

Among Microsoft's problems, the pair said, is Windows' rapidly-expanding code base, which makes it virtually impossible to quickly craft a new version with meaningful changes. That was proved by Vista, they said, when Microsoft -- frustrated by lack of progress during the five-year development effort on the new OS -- hit the "reset" button and dropped back to the more stable code of Windows Server 2003 as the foundation of Vista. "This is a large part of the reason Windows Vista delivered primarily incremental improvements," they said. In turn, that became one of the reasons why businesses pushed back Vista deployment plans. "Most users do not understand the benefits of Windows Vista or do not see Vista as being better enough than Windows XP to make incurring the cost and pain of migration worthwhile."

Other analysts, including those at rival Forrester Research, have pointed out the slow move toward Vista. Last month, Forrester said that by the end of 2007 only 6.3 percent of the 50,000 enterprise computer users it surveyed were working with Vista. What gains Vista made during its first year, added Forrester, appeared to be at the expense of Windows 2000; Windows XP's share hardly budged.
The monolithic nature of Windows -- although Microsoft talks about Vista's modularity, Silver and MacDonald said it doesn't go nearly far enough -- not only makes it tough to deliver a worthwhile upgrade, but threatens Microsoft in the mid- and long-term.

Users want a smaller Windows that can run on low-priced -- and low-powered -- hardware, and increasingly, users work with "OS-agnostic applications," the two analysts said in their presentation. It takes too long for Microsoft to build the next version, the company's being beaten by others in the innovation arena and in the future -- perhaps as soon as the next three years -- it's going to have trouble competing with Web applications and small, specialized devices. "Apple introduced its iPhone running OS X, but Microsoft requires a different product on handhelds because Windows Vista is too large, which makes application development, support and the user experience all more difficult," said Silver and MacDonald.

"Windows as we know it must be replaced," they said in their presentation...Silver and MacDonald also called on Microsoft to make it easier to move to newer versions of Windows, re-think how the company licenses Windows and come up with a truly modular operating system that can grow or shrink as needed.
Microsoft has taken some new steps with Windows, although they don't necessarily match what the Gartner analysts recommended. For instance, the company recently granted Windows XP Home a reprieve from its June 30 OEM cut-off, saying it would let computer makers install the older, smaller operating system on ultra-cheap laptops through the middle of 2010.

[formercia]

90. Apple was smart

They were coming to realize that OS9 was becoming too unwieldy and potentially unstable, so they took an open source BSD UNIX, hired the lead developer of FreeBSD and completely reworked it , thus OSX. Apple is way ahead of the curve.

Microsoft is screwed.

[Demeter]

62. Sowing the Wind, We Reap the Whirlwind / DailyReckoning.Com

The feds no longer tell us how much money they’re ‘printing,’ but experts say M3, the broadest measure of new money creation, is higher than 15% per year. Let’s see, money increases at 15% per year...and how fast is the supply of goods and services increasing?

Uh-oh...the IMF says the United States is headed for recession. Some economists think the country is already in recession. What that means is that the supply of goods and services is barely increasing at all. Which means, the extra money has to bid for the EXISTING goods and services. No need to beat around the bush about it. What this means is that monetary inflation is driving up prices.

The price of oil is $112. Wheat, corn, soybeans, rice – all the grains are near record highs too. Many countries are banning exports. Many are controlling prices. Mexico, for example, has price controls on tortillas. Of course, the real cause of rising food prices is a falling value of paper money. But only the European Central Bank seems to take its mission to protect the euro seriously – it’s holding rates steady. While the ECB tries to hold the line against inflation, the rest of the world’s central bankers are giving inflation all the slack they can. The Bank of England, following the U.S. lead, cut its key rate yesterday by a quarter-percentage point

Let’s go back to our war analogy. It’s a battle between the forces of inflation and the forces of deflation, we keep saying – one side unstoppable...the other immoveable... (This) financial battle looks to us like that kind of war: A war of liquidation...in which people lose money they thought they had – either to inflation or to deflation.

Thursday, Lehman Bros. liquidated three of its funds. And, as mentioned above, a big part of the stock market has been liquidated. And housing gains are being liquidated at about 10% per year...
...and remember, inflation liquidates almost everything...including the value of American labor. As consumer prices go up and the dollar goes down, the relative price of American labor falls. The working man is liquidated. But if this is a WWI kind of war...everyone gets liquidated – investors, lenders, borrowers, consumers, businessmen, householders, working people...everyone. People who worry about money will have less to worry about, in other words.

*** Meanwhile, USA Today tells us that top CEOs may be presiding over disasters, but they are not about to share the misery of the shareholders. The pay of the chief executives of America’s 50 largest corporations averages about $15 million says the paper. And it doesn’t seem to matter whether the shareholders are making money or not. Take the CEO of KB Homes, for example. The company lost $929 million last year. Its share price fell 70%. Go figure.

[Demeter]

64. Investment Bank Demand for Fed Liquidity Falls

http://www.nakedcapitalism.com/2008/04/investment-bank-demand-for-fed.html

The Financial Times reports a rare bit of encouraging news on the credit crisis front, namely, that investment banks have been making less use of the Fed's liquidity facilities of late:

Direct borrowing from its new primary dealer credit facility fell $8bn from $34bn (£17bn) to $26bn in the week to April 9, the Fed said. Meanwhile, the central bank also said that its latest swap auction of Treasury securities was undersubscribed.


But should we then conclude that investment banks are in improved health? After all, Goldman CEO Lloyd Blankfein asserted that the industry is more than half way through the debt contraction.

This optimistic assessment seems at odds with facts on the ground. Yes, we in a period of relative calm, but each time this has happened of late, a new eruption of problems has led to panic, worries of systemic collapse, and new moves by the Fed, And even more worrisome, each time the intensity of the outbreak has increased.

Let's consider some less than pretty realities. Some investment banks have been classifying more and more assets as Level 3. That gives them lots of freedom in how they value them. The markets appear to be tolerating this expedient, even though the sources who speak to me about the industry view the firms as being considerable weakened and at risk. For instance, it seems to be a commonly held view that Lehman is in every bit as bad shape as Bear was, but Lehman is a better citizen than the soon-to-be-history trading firm and the Fed wasn't going to let two firms go under (in other words, the industry participants I've been in contact with are not of the view that Bear was solvent. That admittedly may be sample bias, since this blog no doubt appeals to cynics).

Moreover, there are plenty of shoes yet to drop. Interbank cash hoarding is on the rise despite the Fed's heroic efforts; a bottom of the housing market is nowhere in sight (and we won't know how low it will go in the mortgage market until we know the end game for residential real estate); commercial real estate losses have only started. But scariest by far is the credit default swaps market.

I happened to meet with a hedge fund yesterday (unlevered, BTW) and it comments in passing were telling. They are seeing very large volumes of mortgage paper even though, this fund has not bought a single mortgage and expect that there is even more that would be offered if buyers were stepping forward. In addition, credit default swaps traders tell them that that market is in perilous shape. A great deal of the protection was written by hedge funds, who were typically levered. When they get into trouble, their problems will redound to the investment banks, both through their exposure as CDS counterparties and as lenders to failed hedge funds.

The fact that CDS traders are discussing such a grim viewpoint with people outside their firms (let's fact it, most businesspeople don't go around saying their product is about to implode) suggests that it is a common knowledge in the dealer community. I wonder if this topic is getting short shrift for a reason. The media has been known to overlook the foibles and failings of public figures until they are on the ropes. There may be similar self-censorship operating here, since the press probably does not want to be accused of fomenting panic.

[Demeter]

65. Mortgage Insurers (Quietly) Downgraded: CDS Spreads Scream Trouble

http://benbittrolff.blogspot.com/2008/04/mortgage-insurers-quietly-downgraded.html



S&P downgraded four mortgage insurers, MGIC Investment, Old Republic, PMI Group, and Radian Group and nobody really noticed. All those hedges the hedgies, major investment houses and banks put on through these firms are increasingly likely to be WORTHLESS. Expect more massive write downs this quarter as that reality starts to sink in.

I’ve put up the Credit Default Swap (CDS) spread charts up.SEE CHARTS AT LINK To keep it simple, high spreads are bad. The higher the spread, the greater the cost of buying insurance against default. Big, sudden spikes represent the rapid deterioration of perceived credit quality. Any spreads near 1000 start to get problematic. When spreads are high enough, sellers of insurance will demand the spread plus an up front lump sum. This lump sum is not represented on these charts. Consequently, these charts UNDERSTATE current credit risk.

Notice how things have improved somewhat? Well, don’t get too giddy with Bullish optimism. The spreads have not come back nearly enough for that.

Notice how the credit stress isn’t just concentrated among the Guarantee companies, but spread nicely among everybody from the Banks, Brokers, Builders, and REITS? That’s why it’s called a GLOBAL credit bubble and a GLOBAL credit crunch.

[Tansy_Gold]

69. What a wealth (pun intended) of information you've sent us!

Thank you for your diligence, Demeter. This morning has been a gold mine.


Tansy Gold, pun intended

[Demeter]

71. I Save Up Stuff All Weekend

and people are a bit riled, too. There's a lot more dirt out there on public display. No more platitudes!

Now, if only I could have had this information back in 1999...or make some use of it today!

[DemReadingDU]

72. Pension Watch Website

That approaching wave of pension debt is bigger than it looks. The purpose of this site is to provide an overview of the multiple pension crises that are about to drown America's taxpayers.

The tabs at the top of the page provide a breakdown of all newsclips by category -- public employee pensions (government agencies), corporate pensions, social security (we aren't devoting a lot of time to this, since so many others are), and international trends.

http://www.pensiontsunami.com/


edit: more from this website
The PensionTsunami.com website and the PensionWatch blog and daily newsclip service are projects of FACT -- the Fullerton Association of Concerned Taxpayers. FACT's primary focus is on California's public employee pension crisis, but we are also attempting to monitor developments in all three pension spheres -- public employees, corporations and social security -- since it is taxpayers who will ultimately be responsible for making up deficits incurred by any of them. We also try to monitor international trends.
http://www.pensiontsunami.com/about.php

[PetraPooh]

73. A question please, yes, I'm an idiot.

Please explain to me, anyone, why the stock market seems to think outrageous profits by companies we rely on for our daily ability to survive, get to work, and so on (oil, food, and the like) created because those things are becoming so expense that there are food riots in countries, the American worker can no longer afford to spend on anything except those basics; anyway, how is this a good thing according to the markets. I would think it was a very bad thing because it makes the recession worse and effects consumer spending on any other products, instigates world unrest. Sorry, I'm sure I'm an idiot, but I just don't understand how companies like Cargill & Exxon having these huge profits encourages a stronger stock market. Isn't it a bit counter intuitive? Is it that traders only look short term and don't care about the long term? The "good" news that Cargill has 86% increase in the 3rd quarter last year while food riots begin abroad and Americans are beginning to have to scrounge to afford their groceries just really hit me this morning. I'm guessing that without that report the market would be much lower than it is.

Well, I expect this is such a stupid question, no one will answer; but I'll ask it anyway, and hope if someone responds I'll be able to decipher the jargon.

[Tansy_Gold]

75. You're not an idiot.

PetraPooh, if I didn't have to leave right away, I'd fill you in on my own history of idiocy/ignorance, but I'm just about on my way out the door.

YOU'RE NOT AN IDIOT. :hi:



And the outrageous profits on the necessities of life are not a good thing: they are a device to funnel the earned wealth of working people, the people who CREATE the wealth, into the hands of the idle rich.

I've learned not to equate the Dow Jones Industrial Average with anything resembling the health/strength of the US or the global economy.

I won't be the only one to reply to you. And I suspect there are a whole lot of lurkers who are thinking the same thing and haven't had your courage. . . . yet.


peace


Tansy Gold, who learned here to trust her instincts

[Demeter]

77. Denial

So many levels of denial:

First, denial that anything is extraordinarily wrong, just a business cycle, nearly over, etc.

Second, denial that anything shady is going on--the Fed can do what it likes, because nobody calls them on it. Ditto the mortgage companies, ditto the investment houses, etc.--total lack of regulation by the government because Republicans don't do Regulation.

Third, denial that real people are being hurt by abuse of power--the lazy undeserving poor--vs. the golden parachutists and corporate welfare.

Fourth, denial that something must be done--something legal, right and necessary--because again, the GOP doesn't do that kind of thing. And Congress won't respond, because this particular Congress doesn't either. After all, where would they have to start? Impeachment? Otherwise, Bush will sabotage and stonewall through January, if not beyond.

Fifth, waiting to exhale. The election cycle is not going according to plan. Be afraid, be very afraid. The Powers That Be do not like the idea of becoming the Power That Has Been.

Hang onto your hat. It's going to be a bumpy ride.

[PetraPooh]

80. I pulled all my stocks in April 2000, just mutuals, but lucky for me anyway.

Unfortunately I then invested in myself, buying a biz in August 2001. It took a year before I found one I really thought would make, then Sept 11 and oops everything died for six months and wasn't "good" again for almost 18 months. But okay, I barely squeaked through, but digitization of everything and so much available for free online (I did overhead aerial photography, my nemeis was google earth) and down went the biz. No problem, I drag it out a while, buy new equipment that gets stuck in customs to do mast photography, (between google earth and google street level), it finally arrives 18 days before the sub-prime hits and I've had all of 12 shoots because realtors are not interested in better photography for foreclosures or homes that will be sitting for 12-18 months without even having much in the way of walk throughs. What's my point? I've been hanging on to my hat, it's been bumpy for quite a while for me; I expect before long I will be in foreclosure. I figure I have six months max before all my savings and all my line of credit are gone. I've been applying for positions, but there are not very many, particularly for photography or management, except for commission sales "account managers" where really they are just hyping the salesman title.

I really terrified right now, and its hard to keep plugging along everyday without freaking out.

[Demeter]

82. Been There Too

I simply couldn't believe that Bush would purposefully destroy the economy. My 2000 business died in 2004.

Hung on as long as I could, but...bad timing and inability to conceive of such evil getting in power and then being KEPT there! And nothing was being done to stop the economy's hemorrhaging. Still isn't, for that matter.

So, let's see what November brings. Of course, with all the preparations for martial law on the books already, it's a scary way to hope.

[PetraPooh]

83. My fear is that I won't make it till November. And being single, there is no fallback at all.

Thank goodness the kids are grown and the last went out on his own last year, or this would be really uglier.

[Demeter]

84. I Could use a Roomate

If it comes to that. If only to keep from going insane.

[PetraPooh]

86. Cool, where do you live? I may take you up on that if things don't improve in few months.

[Demeter]

117. Ann Arbor, Michigan

One of the bluest spots in the state.

[Tansy_Gold]

93. Well, at least we're all in good company! :-(

I'm also hoping to hang on until November, which is when I'll be eligible for social security -- if nothing better comes along in the meantime (I'm looking! I'm looking!) and/or SS isn't broke/confiscated/liquidated by then.

Widowed three years ago, minimal savings/insurance safety net, substantial debt. I had given up gainful employment in favor of self-employment in anticipation of husband's retirement, but his death erased much of the investment as well as all the plans. So I struggle, look for work that will end up with net-net income (paycheck net over cost of commuting, wardrobe, etc.) and supplement with some self-employment.

All of which is why I think people in this country, and probably elsewhere, really are "bitter." I have paid virtually no attention to the brouhaha over whatever it was Obama said about voters being bitter, but I think the term is appropriate. Why shouldn't we be bitter when we see the Fed bailing out the billionaires who have STOLEN our wealth? Why shouldn't we be bitter when we see our jobs going to China so the billionaires can reap more and put the Chinese into slavery -- except for the Chinese billionaire slave-owners?

When bitterness gives way to anger, and anger to desperation, things will get ugly. We ain't there yet, but we is gettin' closer.


Tansy Gold

[Demeter]

122. I Can Run a Halfway House for Women Crushed by Bush's Economy

There's a lot of potential in this co-op....

[Tansy_Gold]

108. "purposely destroy the economy"

That phrase has been echoing quietly in the back of my head for months now, spoken/written by a lot of people.

What I think we really, really, really need to keep in mind is that one of the major architects of this looming collapse is none other than Alan Greenspan, who socialized with Ayn Rand while she was writing her rightwing manifesto, Atlas Shrugged. The premise of Atlas is that the "men of the mind" have to withdraw their services and let the global economies crash and burn. Let the factories go idle, blow them up if need be. Flood the mines. Poison the fields. Let the people starve. The righteous "leaders" absolutely must not attempt to save the cancerous system that takes from the productive and gives to the lazy. Indeed, one of the main characters (Ragnar Danneskjold) is a "pirate" who goes around sinking ships and converting the prizes to gold to return the real wealth to the industrialists.

Atlas Shrugged is often labelled science fiction, and there are elements of that in it. But what it really is is Rand's blueprint for capitalist world domination. And what has Greenspan been advocating virtually all his professional life? That Rand's philosophy must be followed to the letter.

The book is quite creepy in some respects. Well, okay, in a lot of respects. But even as a very naive 20-year-old in 1968 when I read it the first time, I understood that there were flaws in the premise. Lots more flaws in the execution, but even 40 years ago I saw that the foundational structure of her philosophy depended on human beings being perfect. Either perfectly good/honest/greedy or perfectly bad/evil/greedy. Greed when expressed by the bad guys was an evil thing, but greed as utilized by the good guys was not. And she never explained the difference. She couldn't, not without exposing the flaw in the premise.

That black/white polarized thinking simply doesn't work in the real world, but it appears that we have a financial power structure that sincerely believes they are the good/honest/greedy folks and that therefore not only can they do no wrong, but, rather in Nixonian fashion, they believe that if they do "it," "it" is automatically not wrong. What we've seen from the boooooosh administration as well as from boooooosh itself is polarized thinking taken to an extreme. And without countervailing voices, the masses believe what makes them feel better.

Do I think Greenspan et al are deliberately destroying the real economy through bubble economics? Well, in a word, yep.

Tansy Gold, who is thinking she maybe ought to write another novel. . . . . .

[54anickel]

129. Heh-heh, please don't sell Friedman short on the destruction of our economy

http://www.naomiklein.org/shock-doctrine/short-film

While it all looks like short-sightedness and piss-poor management, I have a hard time believing there's anything short-sighted going on at the top with TPTB. :tinfoilhat:


http://www.amazon.com/exec/obidos/tg/detail/-/0805079831/ref=ord_cart_shr?%5Fencoding=UTF8&m=ATVPDKIKX0DER&v=glance

http://www.amazon.com/exec/obidos/tg/detail/-/1596913991/ref=ord_cart_shr?%5Fencoding=UTF8&m=ATVPDKIKX0DER&v=glance

[PassingFair]

88. The term used in our sales meeting this morning was...

...wait for it....































MINI-RECESSION.

We are in a "mini-recession".

:eyes:

[TalkingDog]

99. BWAHAHAHAHAHAHAAAAAA!!!!!

Stop it!!! Stop it, you are killing me!!!!!

Ah, *sniff* ummm...okay. That's better.....



Mini-Recession, eh?

[Hugin]

101. Ah, the mini-recession is already soooo this morning...

Why, now we're into a micro-recovery!

Please, try to keep up!







Bahahahahahahaha! mini-recession. Brought to you, no doubt, by the same fine folks who called Hurricane Katrina 'Breezy with a slight chance of showers.' :eyes:

[kickysnana]

105. Cheer up "Its slinky, its slinky,....." n/t

[DemReadingDU]

111. There are no idiot questions

As you can see, hang around the SMW thread, and eventually you'll get some great answers!


P.S. only 3 more postings, and you'll have 1000!


:hi:

[ozymandius]

125. Actually - you know more than you think you know.

Futures are exactly what the name implies: future performance. However these days future does not mean what it used: five years ahead of where you stand today. Short selling has driven these markets for years. Just look at the volume from today's trading: The NYSE saw 3,555,985,000 shares traded in ONE day. I remember when, in recent memory, 3 billion shares in one day was extraordinary and worthy of special mention. Now that threshold has increased to 4 billion.

In terms of "averages" - it's a mixed bag. If one share will cost you $12,302.06 - then what's the cost at the top end? And what widget or service does that company provide? How low does the penny stock index go?

When we are dealing with Dow averages we are dealing with companies so large (like G.E.) who create products so diverse in nature that these companies' individual stocks act more like a mutual fund rather than an individual stock representative of an individual item (like microchips).

The disconnect that you reference is not counter-intuitive. Many of my generation (I'm 41) were raised on the notion of buy-n-hold. That idea is pervasive today. However the day trading community and rapid, sometimes hostile, accumulation of a company's stock has changed all that. More elaborate betting schemes like CDO and CDS and MBS have perverted the investment world into a Vegas-like whorehouse.

Here's the skinny: basic commodities will always be hot investments. Innovation is dead for the time-being. Fuel costs and basic animal survival costs are now the hot tickets because of the guaranteed return on investment. Don't let the saber-rattling hyperbole fool you.

When Dick Cheney says that Iran is developing nuclear weapons you should hear: this is a wad of spit to keep the price of oil services high. The price of oil goes up when Goldman Sachs buys a virtual inventory of the stuff and then passes this off to refineries at a profit. You and I pay the difference. Factor the cost of transportation into the price of food and you eat the cost difference. These scenarios are the basics of investing these days.

Don't kick yourself because the system is complicated. Even Ph.D. economists get migraines over this stuff.

[PetraPooh]

128. Thank you for that post. It helps me not feel so stupid; I have an

accounting background, so it was quite disconcerting to think I "wasn't getting it". Doesn't anyone worry/realize though, that by disabling the consumer to being only able to afford those basic commodities, it is actually adding to the length of the recession and the long term outlook for the markets themselves? I guess what you are saying is that "they" realize it and just don't care. Man I wish trickle down economics also meant that they felt the pain first and longest.

[Tansy_Gold]

133. That "accounting background" will get you every time

I, too, have that "accounting background," in the form of an AAS from a community college in Indiana back in the mid-70s. It was good enough to get me a lot of jobs, but also good enough that I got monumentally taken advantage of. Oh, sigh, long sad story.

But it also gave me an appreciation for the commonsense logic, the debit/credit/balance symmetry of good ol' double-entry bookkeeping. A loss on one side has to be balanced with a gain on the other -- and that just made the whole derivatives bowl o' pasta totally nonsensical. That's why when I started posting my own stupid questions ;-) here at SMW, I prefaced them with the disclaimer that I wasn't an economist, but I wasn't stupid either!

If there's any comfort to take from all this, maybe it's that we here at SMW are all in this together, as Red Green would say. And I'm pullin' for ya.


Tansy Gold, editing her typos

[PetraPooh]

139. Yes, I think there is also a tendency to be a bit, (okay a lot) conservative

regarding money in general when one has been an accountant for any length of time.

[fasttense]

74. Aw man, such interesting posts yet again.

I've printed two and read three and still more good articles posted to read. Where will it all end? I may spend my whole day here.

Thanks for all the wonderful info posted here. I learn so much from all of you. Mmmm, mind candy. :9

[Tansy_Gold]

76. It's not candy. It's essential nutrition.

And Demeter -- such an appropriate name! -- keeps us well fed.

[Demeter]

78. I'm Blushing Again

Thanks Tansy. Kick a field goal today!

[Hugin]

87. I thought DEMETER was a satellite!

Demeter (Detection of Electro-Magnetic Emissions Transmitted from Earthquake Regions)

http://en.wikipedia.org/wiki/Demeter_%28satellite%29

Shows what -I- know. :7

[TalkingDog]

100. Well they both have to do with the earth.....

Both are protective.

That's it. I got nothin'

[54anickel]

102. Anyone notice how the "free-marketeers" are already screaming about the evils of

ANY sort of regulation that might come about - yet no one is touching the question of legality of the Fed bailout. I'm just getting so sick of even casually paying attention to this stuff anymore...

http://www.twincities.com/ci_8901533?source=most_emailed
Volcker stands tall, Greenspan shrinks

big snip to the "regulation bad">

If Kasriel agrees with Greenspan on anything, it's in his rejection of the notion that free markets are inherently unstable and in need of regulation.

"We don't have a true free market," he said. "The Fed sets an important price" — the interbank lending rate — providing all the reserves the banking system demands at that price. "It would be an accident if the Fed were to set that price at a market-clearing level," Kasriel said.

Just as in the aftermath of the Great Depression, Congress is gearing up to pass new regulations to prevent the current credit crisis from happening again.

"That will be Greenspan's legacy," Kasriel said.

As legacies go, that would be Greenspan's worst nightmare.



The adults are having a say - though not exactly getting MSM coverage....

MONEY TALKS: Back To Basics Of Central Banking
http://www.cattlenetwork.com/content.asp?contentid=213069

NEW YORK (Dow Jones)--It's now clear that the debate over how to protect the economy from a financial shock has fundamentally split the global monetary policy-setting camp.

In one corner are those pushing the tools of modern central banking to their limits to stop a crisis of confidence in the financial sector from dragging the global economy into recession. In the other is the old school - central bankers who believe that restoring confidence requires taking care of the basics – that is, inflation.

This week, the old guard got to have their say, as former Fed chairman Paul Volcker thundered about the central bank's duty to control inflation in the face of its unprecedented intervention in the financial sector crisis. Dallas Fed President Richard Fisher and European Central Bank President Jean-Claude Trichet were right behind him.

It's not a fashionable concern, compared with, say, derivatives, structured finance and the shadow banking system, but - as fuel and food prices burn away at the average American's spending power - it's a very relevant one. Particularly in the hands of Paul Volcker, the hero of the 70's stagflation era.

The old school's argument centers on the need to return to fundamental economic principles that restore the balance between consumption and production, and monetary policy that restores confidence in the financial system and its currency.

"It is the United States as a whole that became addicted to spending and consuming beyond its capacity to produce," Volcker said in a speech in New York. "The result has been a practical disappearance of personal savings, rapidly rising imports, and a huge deficit in trade."

more...


http://www.dailynews-record.com/opinion_details.php?AID=16166&CHID=36
Volcker Defends The Dollar Posted 2008-04-12

Fed Must Not Bow To Politicians

snip>

More specifically, Mr. Volcker warned of the consequences of a Fed succumbing to political pressure. When "concerns about recession are rife" and the central bankers feel the urge to bolster a foundering economy, he told his audience, "the fundamental need to maintain a reliable currency" will be "subordinate(d)." This, he obviously believes, is wrong, for this reason: One cannot ignore the dollar and rescue the economy. Stagflation inevitably results.

But, as Mr. Volcker emphasized, muddling this current crisis is another massively destabilizing element — the run of housing foreclosures. And while he did not preclude some measure of governmental intervention to stem this rising tide, he did point to the dangers of a bias toward "particular institutions and politically sensitive constituencies." Again, his concern was for the viability of the dollar — and the Fed's seeming inability (refusal?) to protect its value.

What is the relation of the dollar's relative demise to the travails of the housing market? Specifically this: When dollars are exchanged for what Mr. Volcker called "mortgage-backed securities of questionable pedigree" — witness its $29 billion worth of ballast to a sinking Bear Stearns — faith in the Fed can be diminished.

In describing this disturbing turn of events, The Wall Street Journal spoke warmly of "the specter of moral hazard" raised by such actions. Paul Volcker simply issued a warning, a few watchwords — defend the dollar! — and the suggestion of a remedy.

more...



But how come so little on that stretch of legal power we read last week? Where's the outrage? Is it so fragile that we have to ignore the law to muddle through? I wonder if history will look back on this as another one of those Ford pardons Nixon moments.

[Hugin]

104. Mark me as feeling the same way...

"sick of even casually paying attention to this stuff anymore..."

That's sort of where I'm at, man.

I've been contemplating taking a break, I'm in need of a walk-about.

[54anickel]

112. Yep, I've sort of been on a long sabatical from watching here, and even

with the huge amount I've cut back it's still hard. Sometimes I think I need a complete clean break, but just can't seem to do it. Sort of like being stuck at a horror flick, you try and squeeze your eyes shut tight, but ya just can't help peeking. Can't just walk out cuz you either got a vested interest in one of the characters or an extra large bucket of :popcorn:

[Demeter]

121. It's Dangerous To Take Your Eyes Off These Fools

the financial pooh-bahs, not the people of this fine thread....

[TalkingDog]

113. Ah, but Prag.... your tribe will always need it's shaman.

If you go on walkabout who will warn them about the bears?


That's what we are all doing here, you know.

We are being the shamans of our tribes.

Our tribes are the people we send SMW stories to and political outrage stories to. The people we care enough about to warn of problems and dangers they can't face, don't want to face.

When anthropologists began to study shamanism in earnest they found that the shaman was the person who not only attended the physical and emotional health of the individuals in his or her tribe, but also the social and economic health of the entire tribe.

But rather than being the leader of the tribe or a revered or powerful person in the tribe, they were and still are almost always marginalized. Often living in poor conditions compared to the rest of their people. Yes, honored after a fashion. But feared and shunned for the ability to foresee problems and then insisting on speaking the truth about them, for pointing out necessary things people simply do not want to hear or deal with.

A study a couple of years ago suggested that pessimistic people are not as socially accepted as their optimistic counterparts. And the common response? Well, duh.

However pessimism does not indicate that one is wrong in their assumptions. Think about it in terms of the survival of the tribe. Optimism can be a lifesaver. "Hey guys, let's try this new berry. It can help get us through the winter." Pessimism can do the same. "I don't know, it will probably make us sick."

A shaman's lot is to point out that no matter how horribly and desperately hungry you are, you might want hold off and let the pigs eat it first. To be the subject of social backlash for being honest. To be shunned for that stupidly dogged refusal to accept the prevailing world view when it is quite dangerously and obviously flawed.

In the Vietnamese culture it is almost always women who are called. They consider it a curse and spend a long spell in a period of mourning. Because you cannot refuse the calling. In no culture is that ever allowed. To refuse is to deny the basis of your being and leads to dysfunction, disease and often death. In other cultures both men and women are called and in some, only men. But the commonalities among them are the inability to refuse being called and the attendant social exclusion, the marginalization and the rejection, fear and loathing their observations engender.

Unlike the user-friendly New Age version, a real Shaman is never wanted, but always needed. It is our lot.

[Demeter]

123. A Shaman Without a Tribe

sounds like John the Baptist, and we all know what happened to him!

[Tansy_Gold]

130. On being a shaman

Oh, TalkingDog, how wise -- and welcome -- your post is!



Tansy Gold, the frequent pessimist who has often felt unwanted

[Hugin]

131. Alas, yes... 'tis true 'tis true...

Thanks for the very nuanced reminder Talking Dog. :)

I have taken the time to cut/paste it into a file for later pondering.

[UpInArms]

135. thanks TD!

now I know where and what I am - a shaman

But rather than being the leader of the tribe or a revered or powerful person in the tribe, they were and still are almost always marginalized. Often living in poor conditions compared to the rest of their people. Yes, honored after a fashion. But feared and shunned for the ability to foresee problems and then insisting on speaking the truth about them, for pointing out necessary things people simply do not want to hear or deal with.

[54anickel]

132. How Greenspan & Bernanke Invalidated Friedman

Things that make you go hmmmmm?

http://bigpicture.typepad.com/comments/2008/04/how-greenspan-i.html

snip>

An ironic corollary of that thought is that it pretty much invalidates the entire, mainstream (most certainly including Bernanke and Greeenspan), Milton Friedman-inspired critique/view of the Great Depression as having resulted from bad monetary policy on the part of the Fed as the bubble burst. They needed, according to that critique, to be much looser than they were, and all the problems would have been avoided.

So in a sense, Bernanke’s an acolyte of that same church (recall him saying to Friedman, at some dinner or something honoring him, Never again; i.e., as a result of the lessons learned, taught by Friedman, the central bank would never repeat those Depression errors,), can’t fall back himself on a “It’s Greenspan’s fault” defense, because that’s antithetical to their whole view of history.

I see The Speech itself as a terrifying document, although it’s also an absolute blueprint for what’s going on today -- you’ve got to give Ben credit for foresight; he’s running down the checklist he provided there, item by item, line by line. Too bad none of it’s working, at least to date, but instead is exacerbating the problems.

The other thing to do is to look at the steps along the way, including that represented by this speech, incidentally, by which Ben provided intellectual cover and backdrop for Greenspan’s moves.

The latter task is pretty simple. Let’s first note that Bernanke moved from the Fed, to become Chairman of the Bush’s Council of Economic Advisors, and then back to succeed Greenspan as Fed Chairman. There’s been lots of criticism of the Bush administration, on lots of fronts, for its politicization of many different policy arms. Certainly Greenspan has been criticized, and not just recently, for being an overly political creature, shifting his public statements about fiscal policy and taxation to fit the views of his changing political masters. And there’s been recent criticism that the Fed has come to view itself more as an adjunct member of the Bush cabinet, than in its traditional and prescribed role as an independent policy-making body. Bernanke’s career path exemplifies that sort of politicization, which ought to raise alarms on all sorts of level. Getting to more fundamental issues, he was at all moments a willing and eager accomplice to Greenspan’s rate-cutting efforts and asymmetrical policy responses, all of which engendered moral hazard in the DNA of the markets, and told speculators at every level not to worry, that the Fed had their collective backs. The “global savings glut” answer to Greenspan’s “conundrum” as to the explanation for low long term interest rates is a perfect example of Bernanke playing the geeky intellectual to Greenspan’s smoove political animal, providing an ingenious, and plausible, explanation for a phenomenon that had equally plausible, and far simpler, yet less convenient, explanations. Occam’s razor doesn’t always rule.

Back to the speech, early on Bernanke signals the asymmetrical policy response which characterized the Greenspan Fed from early on, and which has continued under Bernanke. The Congress has given the Fed the responsibility of preserving price stability (among other objectives), which most definitely implies avoiding deflation as well as inflation. I am confident that the Fed would take whatever means necessary to prevent significant deflation in the United States. Do you have any recollection of Ben suggesting, at any point, as the prices of a wide variety of goods and services, that middle class Americans purchase on a day to day basis, has skyrocketed, invoking Malcolm X in his willingness to use any means necessary to keep inflation under control? I sure don’t.

Then in the speech he starts talking about how to prevent deflation. The famous “technology, called a printing press” statement is a not-veiled at all threat to simply drive down the value of the dollar. Certainly one way to get people spending is to let them know in no uncertain terms that tomorrow their savings will be worth half of what they’re worth today. Ask any citizen of Harrar -- it works for them. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. Bernanke’s been incredibly successful in this endeavor -- just look at the price of oil, gold, wheat, milk, rice -- the list goes on and on.

more...

[AnneD]

106. Deflating housing bubble extends to Mexico

PUERTO VALLARTA, MEXICO —
<snip>

Beyond this building, three recently completed 20-story buildings stand, awaiting occupants. And up the beach a few steps in another direction there are still more condos with magical names — Shangri-La, Grand Venetian, Portofino and Bay Grand.


More to come
In fact, new construction goes far beyond the confines of Puerto Vallarta. It is everywhere along this beautiful coast.

In the places where it is not yet completed, billboards announce in English the imminent arrival of another opportunity to live in unsurpassed luxury and elegance, where you can view the world from a plethora of infinity pools.

<snip>

But let's put it another way. While the number of millionaire households in America has shown stunning growth in the last few years, millionaires are still in short supply relative to the number of luxury opportunities that have been created.

http://www.chron.com/disp/story.mpl/business/5695074.html

Thins are tough all over. Someone else will have some spaining to do.

[AnneD]

107. AP poll: Mortgage payments worry many

WASHINGTON — One in seven mortgage holders worry they may soon fail to make their monthly payments and even more fret that their home's value is shrinking, according to a poll showing widespread stress from the nation's housing crisis.

In an ominous snapshot of how the sagging real estate market and sour economy are intersecting, the Associated Press-AOL Money & Finance poll also found that 60 percent said they definitely won't a buy a home in the next two years.

That was up from 53 percent who said so in an AP-AOL poll in September 2006. Only 11 percent are certain or very likely to buy soon, down from 15 percent two years ago.

In today's economic climate, even holding onto what they already have is a challenge and source of distress for significant numbers of homeowners. Nearly three in 10 said they are concerned their home's value will decline over the next two years, while 14 percent of mortgage holders expressed worry that they might miss payments in the next six months.

http://www.chron.com/disp/story.mpl/ap/business/5699365.html

:wow: just :wow: Every legislator should be shaking in their boots at some of these numbers. I know this echo's the earlier posting, but it just sends cold chills up my spine

[Demeter]

124. Yeah, THAT Even Hit the Front Page of Our Local Fishwrap

Of course, with real estate dying in Michigan since 9/11, they couldn't ignore it anymore. Not with the foreclosures every month, and the population outflows, etc. etc.

[AnneD]

109. Even Credit Card Offers Are Ebbing ....

Since last November, credit card companies have slashed the amount of direct mail they send out, according to figures released by Mintel, a market research firm. Mintel found that fewer pieces had gone out in February, the last month for which figures were available, than in any month since April 2004. Mintel extrapolated the figures from a panel of 9,700 households, recruited afresh every month.



There is day-to-day news that we’re bordering on recession, said Lisa Hronek, an analyst at Mintel. “They may be scaling back in response to their target audience just not being there any more, or not as willing to take on new debt.”

The cutbacks affected mail sent both to current customers and potential ones. Mail to existing customers, which accounted for just under a quarter of the total, had the sharpest drop.

One company, however, has been unaffected: Chase sent more than twice as much mail last year as Bank of America, at No. 2. Synovate, which also tracks such mailings, said Chase had ramped up to fill the void.

http://www.nytimes.com/2008/04/14/business/14drill.html?_r=1&oref=slogin

A bright spot maybe?

[ozymandius]

115. Finally! Some good economic news.

I loathe these credit card offers. They are a waste of trees, postage and brain power. They're also shortening the life of my shredder.

[AnneD]

110. Taco Bell, Wal-Mart, NRA hired 'black ops' company that targeted environmental groups

A private security firm managed by former Secret Service officers spied on myriad environmental organizations throughout the 1990s and the year 2000, thieving documents, trying to plant undercover operations and collecting phone records of members, according to a new report.

Documents obtained by James Ridgeway, a Mother Jones correspondent formerly with the Village Voice, reveals the contractor collected confidential internal records -- donor lists, financial statements -- even Social Security numbers, for public relations outfits and "corporations involved in environmental controversies."

Beckett Brown International also offered "intelligence" services to the Carlyle Group, the controversial DC-based investment company; "protective services" for the National Rifle Association; "crisis management" for the Gallo wine company and for Pirelli; "information collection" for Wal-Mart.

"Also listed as clients in BBI records," Ridgeway reveals: "Halliburton and Monsanto."

Like other firms specializing in snooping, Beckett Brown turned to garbage swiping as a key tactic. BBI officials and contractors routinely conducted what the firm referred to as "D-line" operations, in which its operatives would seek access to the trash of a target, with the hope of finding useful documents. One midnight raid targeted Greenpeace. One BBI document lists the addresses of several other environmental groups as "possible sites" for operations: the National Environmental Trust, the Center for Food Safety, Environmental Media Services, the Environmental Working Group, the U.S. Public Interest Research Group, and the Center for Health, Environment and Justice, an organization run by Lois Gibbs, famous for exposing the toxic dangers of New York's Love Canal. For its rubbish-rifling operations, BBI employed a police officer in the District of Columbia and a former member of the Maryland state police.

More.......

http://rawstory.com/news/2008/Police_rank_black_ops_on_environmental_0411.html

I usually shy away from raw story but this one has a ring of creditably....Maybe it was mentioning Carlyle:think:

[TalkingDog]

114. I've done some "D-line" operations on local grocery stores in the past.

Good eatin'.

Artichokes, tortilla chips, bell peppers, frozen salmon. Not exactly haute cuisine, but hey it was free.

[ozymandius]

116. The final word on today's averages.

Dow 12,302.06 Down 23.36 (0.19%)
Nasdaq 2,275.82 Down 14.42 (0.63%)
S&P 500 1,328.32 Down 4.51 (0.34%)
10-Yr Bond 3.5030% Up 0.0320
NYSE Volume 3,539,237,500
Nasdaq Volume 1,640,074,000

4:30 pm : The stock market started the new week on a losing note as a weak showing from the financial sector, which dropped 2.4%, weighed heavily on the broader market.

North Carolina-based Wachovia Corp. (WB 25.31, -2.50) was the focal point in the financial sector today. Its stock declined 9.0% after the company reported a first quarter loss of $0.14 per share. Analysts had expected Wachovia to post a profit of $0.40.

The real punch for Wachovia's shareholders, though, was the added announcement that the bank cut its dividend sharply to preserve capital and announced concurrent common and convertible preferred stock offerings that raised $7 billion in aggregate. The common stock portion was priced at $24 per share, which was a 14% discount to Friday's closing price.

Wachovia's situation created a sense of angst that the bottom for the financial sector may not be as close at hand as many pundits were claiming just a few weeks ago. Further insight on that notion should be provided throughout the week as a number of financial firms, including JPMorgan Chase (JPM 41.50, -1.03), Wells Fargo (WFC 27.20, -0.77), Merrill Lynch (MER 42.88, -0.80) and Citigroup (C 22.51, -0.85), report their quarterly results.

Strikingly, the financial sector has fallen five straight sessions, suffering a decline of 7.9% over that period.

Although the weakness in the financial sector played a key role behind today's negative performance, strength in the energy sector, which gained 1.8%, acted as an offset that kept the broader market's losses in check.

Reports that Brazilian company Petrobras may be sitting on an oil field with as much as 33 billion barrels of recoverable crude oil and a 1.5% jump in oil prices that pushed them back toward record highs were among the factors that helped thrust the sector into a leadership position in Monday's trading.

Relative strength in the retail sector, which followed reports Blockbuster (BBI 2.841, -0.32) was looking to acquire Circuit City (CC 4.97, +1.07) for at least $6 per share and a better than expected retail sales report for March, also provided a measure of support.

Before the open, the Department of Commerce reported that retail sales rose 0.2% in March and 0.1%, excluding autos. That was fairly close to expectations, but the realization that gasoline station sales were a key driver behind the uptick tempered investors' enthusiasm.

Overall, Monday's session had a lackluster tone to it as evidenced by the modest volume at the NYSE, which approximated 1.2 billion shares. DJ30 -23.36 NASDAQ -14.42 NQ100 -0.4% R2K -0.3% SP400 -0.2% SP500 -4.51 NASDAQ Dec/Adv/Vol 1845/1076/1.61 bln NYSE Dec/Adv/Vol 1850/1247/1.18 bln

[Demeter]

126. Somebody Was Busting Their Chops To Keep The Loss So Small

Wonder what that cost us?

[AnneD]

140. Good question....

They already own my first born.