STOCK MARKET WATCH, Thursday January 22

[ozymandius]

Source: du

STOCK MARKET WATCH, Thursday January 22, 2009

AT THE CLOSING BELL ON January 21, 2009

Dow... 8,228.10 +279.01 (+3.39%)
Nasdaq... 1,507.07 +66.21 (+4.60%)
S&P 500... 840.24 +35.02 (+4.35%)
Gold future... 850.10 -5.10 (-0.60%)
30-Year Bond 3.14% +0.19 (+6.48%)
10-Yr Bond... 2.53% +0.18 (+7.72%)

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

Market Conditions During Trading Hours

GOLD,EURO, YEN, Loonie and Silver

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Read more: du

[Lasher]

1. Big gains on the first Obama trading day.

It won't last but it's a good sign and quite a contrast with the GWB catastrophe.

[ozymandius]

7. Past years' damage will continue to eat holes in the markets.

There is really nothing we can do except wait for valuations to reflect a stable parity with true corporate value.

[Demeter]

2. How About a Pool on Which Day Geithner Withdraws (or is booted from) His Nomination?

He's not long for this world.

[ozymandius]

4. The testimony yesterday was embarrassing.

I was embarrassed for him. He sounded like someone interviewing for a job from which he had just been fired.

[UpInArms]

67. Geithner Senate vote could slip to next week-aide

http://www.reuters.com/article/bondsNews/idUSWAT01082620090122

WASHINGTON, Jan 22 (Reuters) - The U.S. Senate may not vote until next week on Timothy Geithner's nomination to be Treasury secretary if Republicans object to voting sooner, a Democratic leadership aide said on Thursday.

"If Republicans object, we might not be able to vote to confirm until next week," said Jim Manley, a spokesman for Senate Majority Leader Harry Reid. Democrats have sought to have the nomination considered sooner but they would need consent from Republicans.

[ozymandius]

3. Thanks to everyone who responded to the Bush stats request.

I will fit as much as I can on a post-it note sized graphic. This is something to work on over the weekend.

:hi:

[Lasher]

14. Here's something I've shared here before

Hope it's the kinda scoop you were looking for.

[ozymandius]

16. Thank you. Bookmarked for later.

:hi:

[tclambert]

27. Dammit, you guys, my bookmarks are getting out of control.

There's too much good stuff here. I'm gonna hafta add a folder of bookmarks just for the great data and website links I've found on SMW.

And I've gotta figure out how you got that nice table in here. I had some figures on employment back to Eisenhower I'd like to format that way.

[Lasher]

49. OK, Dr Lasher at your service.

It's an image of a spreadsheet I built. I used the snipping tool that comes with Windows Vista Ultimate to clip the portion of the spreadsheet I wanted to display, then I daved the image as a JPEG file. Then I uploaded that to Photobucket and copied the URL from there to the message that I posted.

And there you have the table.

Lasher

On edit: Let me know if you have questions. I'll be glad to share the spreadsheet formulas if you wish.

[tclambert]

84. Thank you, thank you, three bags full.

[janedum]

34. Thanks Bush! Glad he's gone! nt

[ozymandius]

5. Market WrapUp

Markets Remain in High Risk Posture as Red Flags Abound
BY CHRIS PUPLAVA

Ever since the dramatic sell off that occurred in the markets in the last quarter of 2008, one of the indicators I’ve been watching like a hawk is the exchange rate between the Euro and the Yen. I use it as a gauge for deleveraging and the character of risk averseness in the markets. The breakdown of the seven year trend in the cross rate between the Euro and the Yen in early September was a major warning sign that significant deleveraging was underway. Within a matter of two months the Euro gave back six years of ground it gained relative to the Yen, and the stabilization in the markets in October and November of last year was associated with the sell off in the Euro relative to the Yen abating. Since that time the cross rate between the two currencies has fluctuated between roughly 1.16 and 1.30, with rallies in the cross rate associated with market rallies and declines in the cross rate associated with market sell offs.

-chart-

What I have been watching for as a sign that the markets were heading higher or lower is a resolution to the upside or downside in the Euro/Yen cross rate, and yesterday brought that resolution, unfortunately, with a break to the downside. Not only did the Euro fall to new lows relative to the Yen, but so too did a swath of other global currencies as highlighted in the figure below in two separate panels, which means a test of the November lows is likely in the weeks ahead.

....

There are other areas that are showing signs of stress that the markets will be hard pressed to ignore. Credit default swap spreads on sovereign debt issues have risen to new highs as countries battle the current economic crisis, with Italy showing the greatest deterioration with their US dollar-denominated five year swaps rising to nearly 200 basis points. A rise in sovereign debt protection partly explains the weakness in global currencies relative to the Yen, with Japan sporting the lowest spreads at 50 basis points.

....

On top of weakness in commercial real estate is a rising trend in credit card delinquencies. Delinquency rates are rising across the board with Target leading the way with an 8.55% delinquency rate followed by Bank of America with a 6.56% delinquency rate. While American Express possessed the lowest delinquency rate for the last two years, the company has since seen a large acceleration in the past quarter. This development is most likely due to their market segment as they cater to wealthier individuals who witnessed their stock portfolios plummet in the last three months.

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

[Demeter]

9. Other Than the Masive Real Estate Bubble, Why Did Japan Suffer?

They save, they work, they keep the country competitive, why are they having so much pain? Why haven't they come out of their funk?

Is it the limitation of the perpetual growth model?

Perhaps Japan needs a sustainable economy--a new paradigm. God knows we do.

[tclambert]

28. Thought it was because so much of their trade is with America.

When our economy sneezes, they catch cold, too.

Sales of Toyota, Nissan, and Honda are way down in North America. Toyota announced a loss, and announced they will close some factories temporarily. That's gotta hurt.

[tclambert]

85. Japan reported a 35% drop in exports.

[ozymandius]

6. Today's Reports

08:30 Building Permits Dec
Briefing.com 610K
Consensus 615K
Prior 616K

08:30 Housing Starts Dec
Briefing.com 605K
Consensus 610K
Prior 625K

08:30 Initial Claims 01/17
Briefing.com 540K
Consensus 548K
Prior 524K

11:00 Crude Inventories 1/16
Briefing.com NA
Consensus NA
Prior 1.14M

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

[Pale Blue Dot]

39. Initial claims way up (589K), housing starts way down (550K)

Color me surprised. :eyes:

[DemReadingDU]

48. name change

Is there a significance to a pale blue dot?
:)

[UpInArms]

54. maybe this?

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

The Pale Blue Dot is a photograph of planet Earth taken by Voyager 1 from a record distance, showing it against the vastness of space. Both the idea for taking the distant photo, and the title came from scientist and astronomer Carl Sagan, who also wrote the 1994 book of the same name. In 2001, it was selected by Space.com as one of the top ten space science photos.

[Pale Blue Dot]

56. That's exactly it.

:D

[tclambert]

86. Nice choice.

.

[UpInArms]

40. Initial Claims @ 589,000 last wk rev'd up 3k - Housing starts lowest on record

05. U.S. Dec. housing starts fall 15.5% to 550,000 annual rate
8:30 AM ET, Jan 22, 2009

06. U.S. Dec. building permits fall 10.7% to 549,000 annual rate
8:30 AM ET, Jan 22, 2009

07. U.S. single-family permits fall 12.3% to record-low 363,000
8:30 AM ET, Jan 22, 2009

08. U.S. 2008 housing starts fall 33% to record-low 904,000
8:30 AM ET, Jan 22, 2009

09. U.S. 2008 building permits fall 36% to record-low 892,500
8:30 AM ET, Jan 22, 2009

10. U.S. Dec. housing starts at 550,000 are lowest on record
8:30 AM ET, Jan 22, 2009

16. U.S. Dec. housing starts weaker than 600,000 expected
8:30 AM ET, Jan 22, 2009

17. U.S. Dec. housing completions fall 5.2% to 1.02 million pace
8:30 AM ET, Jan 22, 2009

18. U.S. weekly initial jobless claims rise 62,000 to 589,000
8:30 AM ET, Jan 22, 2009

19. U.S. 4-week average initial claims unchanged at 519,250
8:30 AM ET, Jan 22, 2009

20. U.S. continuing jobless claims rise 97,000 to 4.61 million
8:30 AM ET, Jan 22, 2009

21. U.S. 4-week avg continuing claims up 58,750 to 4.56 million
8:30 AM ET, Jan 22, 2009

(edited title line for errors)

[ozymandius]

8. Oil prices rise as Wall Street rebounds

DENVER – Oil prices jumped more than 6 percent Wednesday as a rebound on Wall Street overshadowed a pending government crude report expected to show that U.S. inventories continue to swell.

Light, sweet crude for March delivery rose $2.71 to settle at $43.55 a barrel on the New York Mercantile Exchange.

....

Analysts with Platts, the energy information arm of McGraw-Hill Cos., believe refiners are able to make more money turning crude into gasoline, but retail gas prices will follow the gasoline futures market, which is leveling off.

....

If those estimates are correct, U.S. crude inventories will have risen by 9.8 million barrels in just three weeks, a clear indication of how much both industries and consumers have slashed spending on energy.

Analysts surveyed by Platts predict gasoline stocks will increase 1.9 million barrels because of sluggish demand during a cold snap across much of the country.

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

[Demeter]

12. They can jiggle the price of crude all they want to--the economy is broken

and the oil companies are going to be feeling a lot of pain when attention turns to their income tax and other subsidies....

[AnneD]

74. Morning Marketeers......

:donut: and lurkers. Demeter, I am so thankful I am no longer on that roller coaster ride of a career. They have announced lay offs here in Houston at Conoco. The shit is hitting the fan in earnest. If these companies are smart they will start ramping up R&D in renew-ables NOW. Houston's economy is diverse and could weather an oil downturn, but there is too many sectors of the economy taking a hit.

And if that isn't bad enough-FEMA is totally useless in helping with getting Galveston going again. Rumors are circulating that the Shriners Burn Institute may be going under. While I know this is a private charitable concern-it is one of the top burn facilities in the country both in training and treatment. To lose it is to lose something special that will take years and more money than they need now.

Now that the camera's aren't here any more-we can't get jack done. People aren't looking for hand outs here, just help. FEMA won't lend trailers for shelter because we are in a flood zone (DUH-there are very few places within 300 mi of a coast that ISN'T a flood zone). When they did send a ,yes A trailer out-there were no keys to the lock and it took FEMA 10 days to get them to here. Some homes with 50% damage or less could be fixed quickly if they could stay in Galveston to work on them, but there is no place in Galveston and no FEMA trailers. No place to get a fast food hamburger, no place to rent a movie, few places to get a shower-hot or otherwise. We need some help priming the pump. One reason we have so many folks unaccounted for-less than 2 mi of debris from the hurricane has been removed 4 months after Ike.

You can read more: http://www.houstonpress.com/2009-01-08/news/hurricane-ike-s-wake/

And on a personal note: my brother is doing good and tolerated the surgery well. It is hard for us to communicate. We always tell each other jokes all the time-and laughing causes him such agony. But he is a tough old cob so he will recover well.

Happy hunting and watch out for the bears.

[llmart]

94. Thanks for the info.....

It amazes me that the media doesn't cover this stuff at all. I had no idea you guys were still reeling from the devastation.

[AnneD]

97. It is not just this area and this disaster that FEMA has abandon.....

NOLA is the most public example-but if you do a little investigation of the Natural disasters that have occured in the last 8 years-you will see a trail of incompetence, underfunded promises, and foot dragging. California has a FEMAville that I know of from the wildfires as does NOLA and I bet there might be problems in Iowa too. Just pray you never have a disaster and need FEMA. Stat and local folks planned and did their bestbut the problems happened once FEMA became involved.

[UpInArms]

46. March crude down $1.65, or 4%, to $41.90 a barrel on Nymex

03. March crude down $1.65, or 4%, to $41.90 a barrel on Nymex
9:29 AM ET, Jan 22, 2009

[ozymandius]

10. Intel to shut sites and cut up to 6,000 jobs

NEW YORK (Reuters) – Intel Corp (INTC.O) said on Wednesday it would close manufacturing plants in Malaysia and the Philippines, as well as its only remaining factory in Silicon Valley, cutting as many as 6,000 jobs.

The announcement comes a day after the world's largest maker of microprocessors used in personal computers slashed prices on a number of its chips and a week after it reported a decline in fourth-quarter revenue.

Intel said it would close two assembly test facilities in Penang, Malaysia, and one in Cavite, Philippines.

It will also halt production at a wafer fabrication facility in Hillsboro, Oregon, as well as its Santa Clara, California plant -- a factory connected to its headquarters and the only one left in Silicon Valley.

http://news.yahoo.com/s/nm/20090122/bs_nm/us_intel

[Dr.Phool]

11. Sony and LG stun investors with dire profit warnings

Reuters
Sony and LG stun investors with dire profit warnings
Thursday January 22, 3:36 am ET

By Sachi Izumi and Rhee So-eui

TOKYO/SEOUL (Reuters) - Sony Corp and LG Electronics Inc stunned investors on Thursday, warning of big losses, underlining the deep pain in the consumer electronics market as demand crumbles in a brutal global downturn.

apan's Sony (Tokyo:6758.T - News), maker of Bravia flat TVs, Cyber-shot digital cameras and PlayStation game machines, said it would post a bigger-than-expected $2.9 billion operating loss this business year due to sliding demand, a stronger yen and as it restructures its ailing electronics operations.

Consumer demand for gadgets has slumped as the financial crisis has grown into a broad recession that has already engulfed the United States, much of Europe and dampened demand in once-resilient emerging markets.

As inventories pile up and prices tumble, Sony is feeling the pinch across its operations -- from semiconductors to movies and insurance. Analysts say the group, which generates two-thirds of its revenue outside Japan, needs to take more drastic steps.

"Sony has to consider ways to lower fixed costs not only for its TV business but for the whole company," said Nomura Securities senior analyst Eiichi Katayama. "It will have to start cutting development costs in addition to production costs."

Sony's grim warning came as Japanese exports plunged by a record amount in December and China's economy slowed sharply in the fourth quarter as recession in rich nations hammered the demand that helps drive Asia's top two economies.

Sony competes with Samsung Electronics (005930.KS) in TVs, Canon Inc (Tokyo:7751.T - News) in cameras, and Microsoft Corp (NasdaqGS:MSFT - News) and Nintendo (Osaka:7974.OS - News) in video games.

Adding to the gloom, South Korean mobile phone and appliance maker LG Electronics (066570.KS) posted a record quarterly net loss, hit by big shortfalls at its flat-screen affiliate and weak mobile phones.

LG forecast a grim 2009 outlook, saying its sales will decline and profits worsen due to slumping demand and increasing competition, sending its shares down almost 4 percent.

The firm reported a 671.3 billion won ($489.7 million) net loss for October-December, much worse than a consensus forecast for a 172.3 billion won loss.

However, analysts said LG could gain from the turmoil hitting some of its rivals.

"LG looks to be in a better position than Nokia or Sony Ericsson and could benefit from those two companies' struggles," said Kim Ji-san, analyst at Kiwoom Securities.

"With its strength in the U.S. and Korean markets, LG could gain market share by expanding a bit more into emerging countries and Europe."

Top mobile maker Nokia (Helsinki:NOK1V.HE - News) is expected to announce fourth-quarter earnings later on Thursday that will have dropped by more than half as the global slowdown saw consumers buying fewer gadgets, a Reuters poll of 35 analysts showed.

BIGGER-THAN-EXPECTED LOSS

Sony said it now expects an operating loss of 260 billion yen ($2.9 billion) for the year to end-March, after previously forecasting a 200 billion yen profit.

A downward revision had been expected, but the scale of the cut was far bigger than the 100 billion yen loss predicted by local media.

Sony will give further details of a restructuring at a 5.30 p.m. (0830 GMT) briefing in Tokyo, attended by CEO Howard Stringer.

Ahead of the profit warning, Sony shares closed down 2.6 percent, underperforming a 1.9

http://biz.yahoo.com/rb/090122/business_us_tech.html?.v=2
------------------------------------------------

Looks like they waited until after the close for this announcement.

[ozymandius]

17. With reports due and a string of profit warnings - no wonder why the charts are so pointy.

Careful looking at those charts! You could put an eye out.

[tclambert]

29. This partly answers Demeter's question in #9.

If American kids quit buying Sony PlayStations, what happens to Japan's economy?

[ozymandius]

13. Obama recovery plan advancing through House panels

WASHINGTON – President Barack Obama's plan to award a $500 tax credit to most workers is expected to advance through a key House panel as Democrats prepare his $825 billion economic recovery plan for a floor vote next week.

Plans to extend and boost unemployment benefits, give states $87 billion to deal with Medicaid shortfalls and help unemployed people retain health care will also advance. Republicans are turning against Obama's economic stimulus program, despite promises by both Obama and Capitol Hill Republicans to work together.

....

On Wednesday night, a key piece of Obama's recovery program advanced through the House Appropriations Committee on a 35-22 party-line vote. The sweeping $358 billion spending measure blends traditional public works programs such as road and bridge construction and water and sewer projects with new ideas such as upgrading the nation's electricity grid and investments in health care information technology systems.

The measure contains temporary spending increases for dozens of programs across the federal government. There's money to weatherize poor people's homes, boost spending for community health centers, relieve a backlog of construction projects at national parks, and purchase buses for local mass transit agencies, just for starters.

http://news.yahoo.com/s/ap/20090122/ap_on_go_pr_wh/obama_economy

[Tansy_Gold]

25. Obama's Economic Plan Is Not Going to Save Us

(How much of this is an echo of what's been said right here for. . . . . . years? -- TG)



http://www.alternet.org/democracy/121027/?page=entire


By William Greider, The Nation. Posted January 22, 2009



The nation's fast-darkening circumstances define the essential dilemma of Barack Obama's presidency. His instinct is to govern by consensus, in the moderate middle ground of politics. Yet dire events are pushing the new president toward solutions more fundamental than those he had intended. The longer he resists taking more forceful action, the more likely it is that he will be overwhelmed by the gathering adversities.

Three large obstacles are blocking Obama's path. The first is one of scale: his nearly $800 billion recovery package sounds huge, but it is perhaps two or three times too small to produce a turnaround. The second is that the financial system--still dysfunctional despite the bailouts--requires much more than fiscal stimulus and bailout: the government must nationalize and supervise the banks to ensure that they carry out the lending and investing needed for recovery. This means liquidating some famous nameplates--led by Citigroup--that are spiraling toward insolvency. The third is that the crisis is global: the US economy cannot return to normal unless the unbalanced world trading system is simultaneously reformed. Globalization has vastly undermined US productive strength, as trade deficits have led the nation into deepening debtor dependence.

While Washington debates the terms of Obama's stimulus package, others see disappointment ahead. The Levy Economics Institute of Bard College, an outpost of Keynesian thinking, expresses its doubts in emotional language that professional economists seldom use. "The prospects for the US economy have become uniquely dreadful, if not frightening," Levy analysts reported. The institute's updated strategic analysis warns that the magnitude of negative forces--the virtual collapse of bank lending, private spending, consumer incomes and demand--"will make it impossible for US authorities to apply a fiscal and monetary stimulus large enough to return output and unemployment to tolerable levels within the next two years." Instead, the unemployment rate is likely to rise to 10 percent by 2010. Obama's package amounts only to around 3 percent, annually, of GDP in a $13 trillion economy. Levy's analysis calculates that it would require federal deficits of 8 to 10 percent of GDP--$2 trillion or more--to reverse the economic contraction. And yet, the institute observed, it is inconceivable that this level "could be tolerated for purely political reasons" or that the United States could sustain the rising indebtedness without terrifying our leading creditors, like China.

Stimulus alone by a single nation will not work, in other words, given the distorted economic system that Obama has inherited. The stern warning from the Levy analysts and other skeptical experts is that the United States has no choice but to undertake deeper systemic reforms right now, rather than wait for recovery. Will Obama have the nerve to tackle these fundamentals? To do so he would have to abandon some orthodox assumptions about free trade and private finance that he shares with his economic advisers.

The most obvious and immediate obstacle to systemic change is the dysfunctional financial system. It remains inert and hunkered down in self-protection, despite the vast billions in public money distributed so freely, no strings attached, in the last days of the Bush administration. We will learn soon enough whether Obama intends to start over with a more forceful approach. Obama and his advisers are eager to get another $350 billion in bailout funds, but they have remained silent on whether this will finance a government takeover of the system. Without such a move, the taxpayers will essentially be financing the slow death of failed institutions while getting nothing in return.

The most complex barrier to recovery is globalization and its negative impact on the economy. Given our grossly unbalanced trade, we have kept the system going by playing buyer of last resort--absorbing mountainous trade deficits and accumulating more than $5 trillion in capital debt to pay for swollen imports, while our domestic economy steadily loses jobs and production to other nations. Renewed consumer demand at home will automatically "leak" to rival economies and trading partners by boosting their exports to the US market--which subtracts directly from our GDP. This is the trap the lopsided trading system has created for recovery plans, and it cannot be escaped without fundamental reform.

To put it crudely, Obama's stimulus program might restart factories in China while leaving US unemployment painfully high. In fact, some leakage may occur via the very banks or industrial corporations that taxpayers have generously assisted. What prevents Citigroup and General Motors from using their fresh capital to enhance overseas operations rather than investing at home? The new administration will therefore have to rethink the terms of globalization before its domestic initiatives can succeed.

A global recovery compact would require extremely difficult diplomacy but could be possible because it is in everyone's self-interest. The United States could propose the outlines with one crucial condition: if the trading partners are unwilling to act jointly, Washington will have to proceed unilaterally. A grand bargain could start with US agreement to serve once again as the main engine that pulls the global economy out of the ditch. That is, the United States will have to continue as the buyer of last resort for the next few years, and China and other nations will have to bail us out with still more lending. In the short run, this would dig us into a deeper hole, but the United States could insist on a genuinely reformed system and mutually agreed return to balanced trade, once global recovery is under way.

Congress can enact the terms now--a ceiling on US trade deficits that will decline steadily to tolerable levels, as well as new rules for US multinational enterprises that redefine their obligations to the home economy. Unlike in other advanced nations, US companies get a free ride from their home government when they relocate production abroad. That has to change if the United States is to reverse its weakening world position. Tax penalties plus national economic policy can drive US multinationals to keep more of their value-added production at home. These measures can be enforced through the tax code and, if necessary, a general tariff that puts a cap on imports. Formulating these provisions now for application later, once the worst of the crisis is over, would give every player the time to adjust investment strategies gradually.

President Obama and his team may at first scorn the notion of saving the world while negotiating a bailout for the United States. They will be reluctant to talk about reforming the global system by threatening to invoke emergency tariffs. But we are in uncharted waters. Impossible ideas abruptly begin to seem plausible. Six months from now, if the Obama recovery does not materialize, the president may discover he has to reinvent himself.

[Demeter]

30. Obama Is Educable and Reality- Based, Unlike Some Residents I Could Name

He'll get on that learning curve and things will be tried until some workable solutions pop out.

And he won't be doing it alone. The nation is united as never before in my lifetime. Not since the anti-Vietnam War movement have we seen such unanimity of public opinion.

This is truly the Boomer Revenge! And we got the kids and grandkids with us!

[DemReadingDU]

35. That's true Obama and administration can find solutions

It's going to take a long time, the economy can't bounce back overnight. The economic mess Obama inherited from Bush, is HUGE, and it's global. As long as the people support Obama, and he can remain united with him, we should be able to get thru.

[specimenfred1984]

66. The Obama admin is listening to all people with something to contribute

I know of someone who's advice is being listened to who is usually ignored, bashed, smeared, slandered and even targeted. The real answers are being heard, it's just a matter of getting a propagandized and heavily dumbed-down public to understand the ideas.

[tclambert]

31. "Always with the negative waves Moriarty, always with the negative waves. " - Oddball

From Kelly's Heroes, one of my favorite movies.

Oddball also said, "Why don't you knock it off with them negative waves? Why don't you dig how beautiful it is out here? Why don't you say something righteous and hopeful for a change?"

It's funny, but I wouldn't want to say that to Tansy. Sometimes the negative waves are the truth. And with Intel announcing job cutbacks, well, the world is sending us negative waves.

[Tansy_Gold]

37. it's not negative if it's the truth. And I don't mind the jibes ;-)

I posted the Greider piece because it was postd over in GD or Economy or somewhere and what I skimmed of it suggested there was food for thought. I'm up to my neck in alligators this A.M. and don't have much time, but seemed to me he's saying that conventional wisdom/DC/MSM/what have you is not what's needed. Throwing money at GM or GS isn't going to do the trick. It's going to take a complete reordering of the global economy, in essence, to effect change in the U.S. economy.

But I'd rather be a doom-and-gloomer who's proved wrong than a Sunshine Mary who gets washed away in the flood.


And it's raining in Apache Junction right now. . . . . . .



on



Tansy Gold

[DemReadingDU]

51. Oh, I agree

This financial bubble is so huge, and it's global, that no amount of bailouts and stimuluses are going to save us. Obama can try with everything he has, I just think we all are going down a long dark road for many years to come. Obama has some good ideas by using America's brains and talents, so I'm confident we'll make it thru, eventually.

[Joe Chi Minh]

83. I think the late J K Galbraith may have made a comment, very germane

to this situation we are in:

"In all modern depressions, recessions, or growth-correction, as variously they are called, we never miss the goods that are not produced. We miss only the opportunities for the labour - for the jobs - that are not provided." The priority of governments should be to staunch the hemorrhaging of jobs overseas, no less than the protection of jobs at home. Well, it's surely the rational priority.

If US job-protection is pursued and globalisation wholly repudiated, it will be another very important part of the jig-saw that needs to be completed. It would provide a fitting backdrop for the debt amnesty proposed by Rick Williams, and relayed to DU via a post of Joanne98. "All hands to the pump" should be the watch-word, in the sense that all such positive measures, working in concert, would create just the synergies needed to put the country back on an even keel.

However, I don't know if Obama realises the extent to which the corporatocracy needs to be brought under control and forced to pay its way via taxation and other means. Well, I think he knows, but is mindful of the power of the super rich and cautious. There really should be no role for tax lawyers, imo. If one large corporation doesn't want to invest in RD without a sweetener from government, another will. It's called "competition", I believe, though I'd hardly be a maven on the matter.

In short, jobs should come before the "twice shy" citizen will become a happy-go-lucky consumer again. Then incomes will need to be re-jigged to reflect a sane corporate distribution. It worked for Japan after WWII, though I doubt if adjustment of the ratio of the CEO to his lowest-paid worker could be as drastic as that, in the US or the UK. But should the economy turn apocalyptic through the obduracy of the Have-Yachts, who knows how it could turn out?

[Tansy_Gold]

93. Well, yes, but when there are even DUers who resist raising

taxes on the rich, one sees -- or begins to see -- how difficult the task is. The 535 who control things are in the same socio if not socio-economic demographic as "The Rich" and are therefore not likely to pass legislation that will apply the appropriate corrective economic measures.

Someone, somewhere, has to stop being so terrified of pissing off The Rich. TAX THEIR ASSES andbe done with it.

Tax their huge inheritances.
Tax their obscenely huge unearned incomes.
Tax their luxury purchases.

JUST DO IT and see what happens.

Tax cuts to the wealthy HAVE NOT worked. Those who are already rich generally want to keep as much of their loot as possible, but the emotional need that so many of the working classes have to cling to some bizarre and irrational belief that they, too, will become so rich that they need this kind of tax relief --- well, it boggles the mind.

Buffet, Soros, Gates should be paying huge sums, and when they do, they will still have billions left. They can't spend it all, and they can't take it with them. The best way to make it trickle down is to take it away from them --- there! Tansy Gold said it! -- and put it back into general circulation.

Raise the cap on FICA contributions. Apply means testing to SS benefits (as is already done for SSI benefits). Stop thinking of taxes as some kind of evil. We know we have to pay the bill at the grocery check out. We know we have to pay the bill for the gas and water and telephone. We know we have to pay to fill up the tank or buy movie tickets. Taxes are simply the way we pay for the public benefits we use.


Tansy Gold

[DemReadingDU]

95. You said it well!

Our country is broke with all these bailouts. Taxes have to be raised on the uber wealthy to help get us out of this hole that Bush/Paylson/Bernanke have dug our country. And start first to raise taxes in California before they cut off checks to the disabled and blind.
http://www.msnbc.msn.com/id/28709883/

[Joe Chi Minh]

98. Personally, I wouldn't make it at all complex. I'd simplify it right down to one

thing, and one thing alone. INCOME TAX. What could be fairer. It's what Adam Smith wanted.

If you tax huge inheritances (apart, that is, from the interest earned by it), you're going to give a leg up to the "arrivistes" with the sharpest elbows, by levelling the playing field for them. Obviously, there are exceptions, but generally, I believe the "old money" types retain some of the old virtues that even the rich in our countries used to possess. "Noblesse" did indeed used to "oblige", compared with today's Republican rump of shameless, rich hooligans.

[Tansy_Gold]

99. the "old" money types are no more moral than the "new" money types

An inheritance is "unearned income" and should be taxed as such, ITHO.

If an heir is brought into a family businesses as a partner, then ownership can be transferred while the benefactor is alive and treated as "earned" income. Otherwise, it's as unearned as the interest.

And for whatever it's worth, I think Bill "New Money" Gates has done fairly well in the charitable contribution department, to be reasonably compared to, say, Andrew Carnegie or the Rockefellers, etc.


Tansy Gold

[Joe Chi Minh]

100. I disagree with you. Gates is apparently in cahoots with Monsanto,

beside which, imo, Halliburton and the Carlyle Group are angels of light.

That's not to say, of course, there aren't good people "making good" financially by their own efforts, or that great wealth is not quite often a real curse on its heirs. Drugs, alchol, rootless lives of utter misery and lovelesssness and an early death are not uncommon in that class. Why would it not be so? When so many have so little, or indeed nothing. It's one of the more noticeabe spiritual disorders that obsession with wealth and status often gives rise to. Sometimes just parents' obsession with their progeny becoming academic high-flyers or top baseball players or whatever leads to the childrens' suicides.

Nevertheless, when you think of the likes of Eisenhower and Gore Vidal and earlier generations of "old money" Republicans, they didn't move heaven and earth to avoid military service. I've seen too many types like Blair and Thatcher to believe any more in the kind of meritocracy of worldlings of that kind.

I used to be astonished at the audacity of Tories talking about Socialism being the politics of envy, but now I realise that Labour politicians were the only Labour people they ever came across, other than the servants they employed to run their homes - about whom they would have learnt next to nothing. So, naturally, they would have understood it as "the politics of envy". They are all power people, birds of a feather.

[ozymandius]

15. Microsoft expected to cut jobs as profit weakens

NEW YORK/BOSTON (Reuters) – Microsoft Corp is expected to post a quarterly profit that misses its own target and announce thousands of job cuts this week as the global economic slump hurts even the technology industry's biggest players.

When the leading software maker reports fiscal second quarter results on Thursday, investors are likely to press for comments on its outlook and on Yahoo Inc, whose search business has been the object of Microsoft's desires.

The report comes against a backdrop of a wounded global economy that has stifled demand for everything from personal computers to business software and video games, all markets in which Microsoft is a significant player.

....

Analysts on average put Microsoft's profit at 49 cents a share for the quarter ended December 31, which includes a U.S. holiday shopping season that has been called the worst in at least four decades. The Redmond, Washington-based company had forecast a per-share profit of 51 cents to 53 cents for the quarter.

http://news.yahoo.com/s/nm/20090121/bs_nm/us_microsoft

[ozymandius]

18. Citi wants further help for banks (socialized losses request again)

Citigroup's new chairman says that if the US government took bad assets off bank balance sheets, banks might be able lend more money.

Richard Parsons told the BBC that he hoped the government would use money already earmarked to help US banks to buy such assets.

He acknowledged that Citi was not lending as aggressively as in the past because of "balance sheet issues".

http://news.bbc.co.uk/2/hi/business/7844134.stm

---

I am so sick of this. This megabank wants the taxpayer to pay for its dumber-than-dirt decisions.

[Demeter]

22. Parsons takes over as Citi chairman (Know the Players)

http://www.ft.com/cms/s/0/5e6f95c0-e814-11dd-b2a5-0000779fd2ac.html

By Francesco Guerrera

Published: January 21 2009 23:46 | Last updated: January 22 2009 01:04

Dick Parsons, former chief executive of Time Warner, was last night named to replace Sir Win Bischoff as chairman of Citigroup, after the US bank’s fortunes failed to recover despite a $300bn government bail-out in November.

The veteran British banker, who took over only last year, had been expected to step down. Some directors and investors had privately complained that Sir Win had not offered enough supervision and guidance to Vikram Pandit, chief executive....

[ozymandius]

19. Have a nice day everyone!

:donut: :donut: :donut:

Time has caught up with me here. I'll check back later in the day.

ozymandius :hi:

[Demeter]

21. Thanks Ozy!

It's funny, but now that the country is out of the Bushwarp, and we are returning to a reality-based government, and soon, I hope, a reality-based economy, I feel my personal mental and emotional blockages lifting, too.

Now, if only it would get above freezing, and stay there....

[Dr.Phool]

24. Stop sending that cold air down here.

Right now it's 33 degrees here, and I'm right nest to the Gulf. A couple of miles further inland, it's in the upper 20's. And it's supposed to be worse tonight, then back to the upper '70s again.

I can handle a little chill, but please don't let it ruin those fresh, locally grown, Plant City strawberries.

[Demeter]

26. I Wish I Could

We need to fix that border problem with Canada....

[tclambert]

32. The wall to stop an Alberta Clipper would have to be smidge more than 20 feet high.

And razor wire doesn't cut the wind. Ha! A pun!

[DemBones DemBones]

44. The upside is that Plant City growers have been

dealing with low temps ever since I can remember, and I remember when PC was actually a small town! With any luck, and a lot of work by the growers, Florida oranges and strawberries will be OK. Hope the same is true for the economy.

[Hugin]

50. Announcement: This is the DUer formerly known as Prag.

I decided to take advantage of the amnesty name change program.

My other username had accumulated... Um, let's say, baggage over the years... Not really anything I or anyone on DU
had done, but, it was a generational shift in society.

New DU username. But, I'm still here... Still the same... :)

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

Hope you have a good day Ozy.

[DemReadingDU]

52. name change

Very interesting...Thanks for the wiki entry.

[Mojorabbit]

73. I knew I had heard that name before

I used to hang with some Heathens doing some wonderful blots and drinking mead from a horn. That branch of paganism can party.

[ozymandius]

80. Greetings friend, Hugin.

I will remember the handle Prag. For me - the baggage was full of good tidings. I expect the same sentimental attachment with the name Hugin.

[Demeter]

20. Risk test study of Madoff claims (Forensic Accounting!)

http://www.ft.com/cms/s/0/e9058fdc-e7e7-11dd-b2a5-0000779fd2ac.html

By Anuj Gangahar

Published: January 21 2009 22:37 | Last updated: January 21 2009 22:37

Two simple risk management techniques, available to investors at low cost, could have shown the hedge fund run by Bernard Madoff, which is at the centre of allegations of a $50bn fraud, was claiming investment returns that were all but impossible.

A study to be published on Thursday by Riskdata, a risk management specialist, argues that Mr Madoff’s returns are called into question by the bias ratio – a mathematical technique that identifies abnormalities in the distribution of a series of investment returns.

Forensic accountants use a similar method – known as Benford’s law – to identify potential accountancy fraud.

In addition, the study says that comparing the risk profile of Mr Madoff to his peer group would have shown it to be inconsistent with his claimed investment style.

The news comes as a Luxembourg regulator said the number of funds in the Grand Duchy affected by the Madoff scandal had ballooned to 17.

A US lawyer, who represents investors who gave money to Mr Madoff and a number of his feeder funds, said the Riskdata study could be admissible as evidence in legal proceedings.

A letter sent to the Securities and Exchange Commission in 2005 by would-be whistleblower Harry Markopoulos raised red flags about Mr Madoff but did not mention the bias ratio.

The Riskdata study examines the bias ratio of Fairfield Sentry, one of the largest Madoff feeder funds, which is classified by Hedge Fund Research, the data provider, as “equity hedge”, a category which, as of mid-November 2008, contains 2,290 funds.

Since August 2005, Fairfield Sentry’s bias ratio ranges between 6 and 7, while the vast majority of equity hedge funds in the HFR database scored 1 to 3.

The only funds in HFR data close to Mr Madoff’s risk profile were managed by him, or fed money to him.

Fairfield Sentry declined to comment.

Additional reporting by Stanley Pignal

[Nickster]

41. Gotta Love that Benford's Law! Now if only someone would use it BEFORE there was such a calamity.

[Demeter]

23. AIG starts $20bn auction of Asian unit (Real Details!)

http://www.ft.com/cms/s/0/607635a4-e80a-11dd-b2a5-0000779fd2ac.html


By Francesco Guerrera in New York, Lina Saigol and Andrea Felsted in London and Sundeep Tucker in Seoul

Published: January 21 2009 23:30 | Last updated: January 21 2009 23:30

AIG, the stricken insurance giant, on Wednesday kicked off the sale of its Asian life assurance unit – one of its most prized assets – in the hope of raising up to $20bn to help repay the $60bn US government loan that is keeping the group alive.

The US insurer sent the sales memorandum for American International Assurance with limited information to a group of selected potential bidders, according to people close to the situation. First-round bids are due towards the end of next month.
EDITOR’S CHOICE
AIG’s Asian crown jewel will prove hard to value - Jan-21
AIG moves closer to selling Filipino unit - Dec-23
Munich Re buys AIG unit for $742m - Dec-22

Prospective bidders include: China Life, the world’s largest life assurer; HSBC, the UK-based bank; Prudential, the UK insurance group; as well as Prudential Financial of the US.

ManuLife Financial, one of North America’s biggest insurance groups, and Allianz of Germany have also requested information.

People close to the situation said AIG had asked interested parties to bid for 49 per cent of AIA, but said it would be willing to look at offers for all of the unit. AIG could also opt for a full listing of the division if it does not achieve a high enough price.

Any interested bidder will have to prove they can finance the acquisition, which has become increasingly difficult as credit markets have contracted. AIG is thought to be prepared to accept shares as acquisition currency.

The size of AIA could also force potential buyers to form consortiums and break up the asset among themselves. This means that the list of the bidders could change as the auction progresses.

“This has to be a flexible auction,” one person familiar with AIG’s thinking said.

The auction of AIA, which follows last week’s opening of the sale process for AIG’s US life assurance unit, is a sign of its desire to speed up the repayment of the five-year $60bn government loan. AIG came close to collapse last year and had to be bailed out twice by the US government, which now owns 80 per cent of the troubled insurer.

[Dr.Phool]

33. KeyCorp reports $524 million loss

KeyCorp reports $524 million loss
Posted by Teresa Dixon Murray/Plain Dealer Reporter January 22, 2009 06:41AM
Categories: Banks, Real Time News

CLEVELAND — KeyCorp today surprised analysts by reporting that it lost $524 million, or $1.13 per common share, in the fourth quarter.

But while that far exceeds the 2-cent-per-share loss that was forecast, Key blamed the results primarily on two issues: The bank reported a loss of $420 million because of goodwill, which is a decline in the value of the Key brand. Second, the Cleveland bank set aside $249 million for future potential loan losses.

The goodwill loss is a paper loss and doesn't affect the bank's capital reserves.

By comparison, Key had a profit of $22 million, or 6 cents per share, for the fourth quarter of 2007. During the other three quarters of 2008, Key posted a big loss in the second quarter, and slim profits in the other two quarters.

Most banks that have reported results for the fourth quarter so far have seen losses or, at the very least, profits that were less than a year ago.

Fifth Third Bancorp, meanwhile, reported an even bigger loss -- $2.2 billion, or $3.82 per share, for the quarter. That compares with a loss of $81 million, or 14 cents per share, in the third quarter and profits of $16 million, or 3 cents per share in the fourth quarter of 2007.

The Cincinnati bank blamed the loss largely on its own goodwill charge -- or brand name damage. It also lost $800 million on loans on its books.

http://blog.cleveland.com/business/2009/01/key_reports_halfbillion_dollar.html

[DemReadingDU]

36. Fifth Third Posts Fourth-Quarter Loss on Soured Loans

Fifth Third Bancorp, Ohio’s second- largest bank, posted its third consecutive quarterly loss after setting aside more money to cover bad loans.

The net loss for the fourth quarter was $2.14 billion, or $3.82 a share, compared with profit of $16 million, or 3 cents, in the year earlier period, the Cincinnati-based company said today in a PR Newswire statement.

Fifth Third has suspended bonuses, slashed its quarterly dividend to a penny and sold $3.4 billion in preferred shares to the U.S. government’s Troubled Asset Relief Program to save money and boost its capital during the worst financial crisis since the Great Depression. The bank has also tightened its lending criteria and suspended some lending.

“Despite the benefit from the TARP capital injection, which has allowed management to put on hold its previous plan” to sell non-core assets “we believe that credit risk remains elevated,” Morgan Keegan & Co. analyst Robert Patten said in a Jan. 12 note.

Including items Fifth Third was expected to earn 3 cents a share, the average estimate of five analysts surveyed by Bloomberg News.

Fifth Third fell 23 cents, or 5.5 percent, to $3.99 yesterday in Nasdaq Stock Market trading, an 18-year low. The stock has plunged more than 80 percent in the past 12 months.

(Fifth Third will host a conference call to discuss results today at 8:30 a.m. New York time. The call will be broadcast on the Internet at www.53.com)

http://www.bloomberg.com/apps/news?pid=20601103&sid=aD17ZGQmZEHk&refer=us

[willing dwarf]

43. Great headline on that "5th 3rd 4th-quarter..."

took me a while to comprehend!

[DemReadingDU]

47. Ah, 5th 3rd is a big Ohio bank, based in Cincinnati

Just a bank name to us Buckeyes!

Upcoming:

5th 3rd 1st-quarter
5th 3rd 2nd-quarter
5th 3rd 3rd-quarter
5th 3rd 4th-quarter

:P

[Dr.Phool]

53. They're building a new branch office about a mile from me, in Florida.

Looks like it's nearly finished.

[DemReadingDU]

55. Possibly, just in time to be renamed

5th 3rd got into problems when they went buying up banks in other states a few years ago. Now 5th 3rd is a prime candidate to be merged into another bank, or by the FDIC. Stock trading around $3.00 this morning :(

We have account there and at Keybank too. Maybe eventually, both banks will get merged into the same super-bank, and all our accounts will be at the same bank. :)

We didn't start at 5th 3rd. Over 30 years ago we went to a local Savings&Loan for our first mortgage, which got merged into 5th3rd.

Same thing with Keybank. Started out as 3rd National (where I was employed), then merged into Society, then into Keybank.

It's hard to keep up with all these bank changes.

[Dr.Phool]

57. Kinda like my credit cards.

I never opened one with Chase. Now I have 3 of them.

I've never been in a Bank of America, but now I've got a Visa with them. And HSBC. And on and on.

[Hugin]

77. "3rd National Bank" always struck me as a funny name.

But, what's more odd is that I don't believe I've ever seen a 2nd National Bank.

I shall Google it. Maybe there aren't any...

[Mojorabbit]

76. I spoke with them

earlier this month re a CD IRA I have with them that was going to roll over. They offered me 1.3%. Ouch.

[Festivito]

38. Debt: 01/20/2009 10,626,877,048,913.08 (DOWN 2,004,436,597.15) (BHO at zero.)

(This starts the Obama era in daily debt reports. There is no Monday report, only Friday and Tuesday, Tuesday-inaugural day. Obama starts here at zero added to the debt.)

= Held by the Public + Intragovernmental(FICA)
= 6,307,310,739,681.66 + 4,319,566,309,231.42
DOWN 1,254,116,733.01 + DOWN 750,319,864.14

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

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.82, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
At the end of the workday of this report, there should be 305,646,943 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $34,768.47.
A family of three owes $104,305.41. And that is IN ADDITION to their mortgage.

ANALYSIS:
There were 20 reports in the last 30 to 32 days.
The average for the last 20 reports is 1,434,098,391.43.
The average for the last 30 days would be 956,065,594.28.
The average for the last 32 days would be 896,311,494.64.
There were 252 reports in 365 days of FY2007 averaging 1.99B$ per report, 1.37B$/day.
There were 253 reports in 366 days of FY2008 averaging 4.02B$ per report, 2.78B$/day.
There were 75 reports in 112 days of GWB's part of FY2009 averaging 8.03B$ per report, 5.38B$/day.
There were 0 reports in 0 days of Obama's part of FY2009 averaging 0.00B$ per report, 0.00B$/day so far.
There were 75 reports in 112 days of FY2009 averaging 8.03B$ per report, 5.38B$/day.

PROJECTION:
There are 1,461 days remaining in this Obama 1st term.
By that time the debt could be between 11.9 and 18.5T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
01/20/2009 10,626,877,048,913.08 BHO (UP 0.00 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 602,152,152,000.60 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
12/29/2008 -000,737,189,520.41 --- Mon
12/30/2008 +000,055,730,362.68 ------------*******
12/31/2008 +046,553,280,763.13 ------------**********
01/02/2009 -049,252,670,832.20 -
01/05/2009 -000,912,747,082.07 --- Mon
01/06/2009 -000,344,326,906.71 ---
01/07/2009 -000,314,429,077.84 ---
01/08/2009 -027,599,431,464.26 -
01/09/2009 -000,568,123,287.98 ---
01/12/2009 -001,098,982,842.59 -- Mon
01/13/2009 -000,038,769,243.84 ----
01/14/2009 -000,515,208,818.51 ---
01/15/2009 +020,470,437,698.93 ------------**********
01/16/2009 -000,579,761,204.80 ---
01/20/2009 -001,254,116,733.01 -- Tue

-16,136,308,189.48 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $962,245,245,654.01 in last 124 days.
That's 962B$ in 124 days.
More than any year ever, except last year, and it's 95% of that highest year ever only in 124 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 124 DAYS NOT 365.

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

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3699499&mesg_id=3699507

[UpInArms]

42. dollar watch

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

Last trade 85.733 Change +0.482 (+0.62%)

Morning Insight: Cable & Dollar/Yen Big Losers

http://www.dailyfx.com/story/market_alerts/technical_alert/Morning_Insight___Cable___Dollar_Yen_1232630862892.html

Fundys – Once again the preferred trade in the overnight session was the flight to safety buying with the USD and Yen as the prime beneficiaries. Price action in EUR/USD and USD/CHF was less interesting with the latter pairs seemingly content on trading in a more consolidative fashion. However, any favorable price action in Cable or USD/JPY seen late Wednesday, was negated with the market content on using rallies as formidable sell opportunities to build on existing short positions. The overnight release of the much weaker than expected CBI Industrial Trends survey (-48 versus -39 forecast) did not help the Sterling cause with the data series putting in the lowest reading since July 1992. Attempts by Japanese Vice FinMin Sugitomo to curb the appreciation in the Yen by warning that the government was closely watching the currency markets and that “abrupt and excessive currency moves were undesirable” unsurprisingly failed to influence traders with the pair poised to retest and take out the key trend lows by 87.15 from December which were matched on Wednesday. Looking ahead, key event risk for the North American session comes in the form of US housing/building permits (605k and 610k expected) and initial jobless claims data (540k expected) at 13:30GMT along with the concurrent release of Canadian retail sales (-1.5% expected) and leading indicators (-0.6% expected). Later in the morning, we get the release of the Bank of Canada Monetary Policy Report at 15:30GMT.

Techs - EUR/USD has been locked in consolidation mode following yesterday’s late session rebound and the market is confined to inside day price action thus far. Given oversold nature and ability to hold above key 78.6% fib retrace off the major 1.2330-1.4720 move, we retain a mildly bullish bias for Thursday. Key levels to watch above and below now come in at 1.2945 and 1.3080. USD/JPY has showed zero follow through off of yesterday’s bullish candle close and the pair looks set to retest the key matched trend lows at 87.15. Key levels to watch come in at 89.55 and 87.15. GBP/USD price action is quite bearish with the bullish dragonfly/hammeresque close on Wednesday nearly being fully negated today. Inability to break back above 1.4025 keeps downside pressures intact, and a retest of the recent trend lows at 1.3620 Is now favored. USD/CHF is trading marginally higher and the price action is bullish as the pair looks to put in yet another daily higher high and higher low. Next key topside resistance comes in at 1.1735 (12Dec low) . Only back under 1.1380 delays.

...more...

How Will The Fed Support The US And Dollar Without Interest Rates?

http://www.dailyfx.com/story/topheadline/How_Will_The_Fed_Support_1232577589078.html

The Federal Reserve is expected to deliver its January monetary policy decision on Wednesday the 28th; and there is little doubt as to the outcome of the rate decision. After lowering its target to a range between zero and 0.25 percent, the group has essentially brought the benchmark to zero without taking on the stigma of having no room to maneuver. So what can the central bank do now to pull the world’s largest economy out of its worst recession in decades?



<snip>

A Closer Look At Financial And Consumer Conditions



The disconnect between bank lending and consumer lending is keeping the US economy from a genuine recovery and keeping the specter of risk present among the investment community. Through the Fed’s 500 basis point easing and massive liquidity injections over the past few years, financial institutions have found a semblance of stability. However, the momentum of massive writedowns and a severe reduction in the flow of money through investment channels is dragging these major players closer to failure. At risk of default, these firms are building reserves and tightening lending restrictions. However, without the consumer, this danger will not dissipate.



There are many key economic components contributing to the United State’s worst recession in decades; but one sector alone likely holds the ability to bring an end to the pain: the consumer. However, data released over the past week suggests American citizens will not likely increase their own spending habits to help the economy along anytime soon. Retail sales through December dropped 2.7 percent the first time for six consecutive monthly contractions in history and rounding out the worst holiday season in nearly four decades. As for confidence, faith in policy promises will prove temporary unless the market response with access to credit and jobs.

...more...

[UpInArms]

45. Microsoft cutting up to 5,000 jobs - job cuts include 1,400 lay-offs Thursday

04. Microsoft shares fall more than 7% in premarket trading
9:10 AM ET, Jan 22, 2009

05. Microsoft cutting up to 5,000 jobs over next 18 months
9:06 AM ET, Jan 22, 2009

06. Microsoft job cuts include 1,400 lay-offs Thursday
9:06 AM ET, Jan 22, 2009

07. Microsoft: Economy, IT spending 'slowed beyond expectation'
9:06 AM ET, Jan 22, 2009

08. Microsoft Q2 revenue $16.6 billion vs $16.4 billion year ago
9:03 AM ET, Jan 22, 2009

[tclambert]

91. Also, Sun Microsystems announced 1300 layoffs. IBM rumored to be laying

off as many as 16,000.

Dammit, more negative waves.

[UpInArms]

92. sorry about the negative waves -

this is only the very tip -

I am really pissed that Microsucks - being profitable - decided to kick 5000 to the curb - this will feed into the lack of confidence

these are the ones that need to hold fast to their workforce and not succumb to the fear so that those others will turn around faster.

this feeds the fear

:(

[antigop]

58. In "radical change", UBS exiting exotic structured debt business

http://financialweek.com/apps/pbcs.dll/article?AID=/20090122/REUTERS/901229987/1036

Swiss bank UBS is making “radical” changes to its fixed income, currencies and commodities trading business, with more job cuts on the way and the sudden departure of four senior executives, according to internal memos.

One of the hardest-hit banks in the ongoing credit crunch, UBS has been looking for ways to restore profit at its investment banking division and slash its exposure to money-losing assets.

Reorganizing the fixed income division will lead to further job cuts in addition to 2,000 layoffs announced in October, according to an internal memo from UBS global fixed-income heads Carsten Kengeter and Jeff Mayer.

In addition to previously disclosed moves out of municipal bonds, proprietary trading and most commodities, UBS will completely exit the business of creating and trading real estate securities and “exotic” structured debt products.

[antigop]

59. More info on State Street and securities lending (article from 2000)

Just some background info on State Street and securities lending...

http://findarticles.com/p/articles/mi_m0EIN/is_/ai_65698894

State Street Wins Third Party Securities Lending Mandate for Mediolanum International Funds Limited; To Lend Up To 2 Billion in European Equities Held in 18 Funds

State Street Corporation (State Street), one of the world's leading service providers for institutional investors, announced today that it has received a significant securities lending mandate from Italy's Mediolanum International Funds Limited for its Dublin-domiciled funds.

Under this mandate, State Street will lend up to 2 billion in securities from 18 of Mediolanum's 42 international funds. Nine of the 18, which are marketed to retail investors in Italy, are managed by State Street Global Advisors. The securities being lent are European equities, mostly from France, Germany, the Netherlands and Italy and are being held in custody by Dexia Banque Internationale a Luxembourg, Dublin branch.

"We are pleased Mediolanum has selected State Street to lend the securities in its international funds," said Robert Ash, senior vice president of State Street. "This mandate underscores State Street's ability to meet the ever expanding needs of our institutional customers as well as the excellence of our client service."

Said Giuseppe Lalli, general manager of foreign operations for Gruppo Medioalnum: "We selected State Street because we feel confident that, as one of the leading securities lenders in the world with an unparalleled knowledge base, State Street is best positioned to help us optimize the performance of our international portfolios."

[specialed]

60. It's like watching a rock try to swim.

[sam kane]

79. love that, thanks. nt

[tclambert]

87. Welcom to Stock Market Watch

and to DU.

[GliderGuider]

61. Does anyone have a guess as to when we'll see the first -10% day?

I think it will definitely come within this quarter, but my spidey-sense is tingling. Could it be within the next two weeks? What big reports are coming out at the end of January?

[specimenfred1984]

70. FED manipulators no-likey that idea, they want controlled meltdowns

They'd jump in and prop up stocks, futures and commodities and if that didn't work, they'd just shut down the markets. A lot of "the market" is already worthless like banks, if they were allowed to fall in a "free market" they'd be worth 0 in a matter of days. If the market looked like it was going to meltdown, instant short-selling limits would be enacted. This is a fascist country now, there is no freedom, no free markets, no free-falls, no free press, no free health care, no free elections, no free anything.

[tclambert]

88. More negative waves, man.

[antigop]

62. What has contributed to the (securities lending) industry’s remarkable growth?

According to this website...

http://www.eseclending.com/about_securities/faq.php#Q7

* Globalization
o Leading firms now active in as many as 27 markets
o Liberalization of market and entrance of new participants has increased competition and loan activity
* Consolidation
o Mergers have created financial supermarkets offering multiple types of lending structures and functions within each organization
o Liberalization of market and entrance of new participants has increased competition and loan activity
* Increased demand to borrow securities
o Increase in hedge fund activity has increased demand to borrow securities
o Increase in sophisticated proprietary trading arbitrage strategies by broker-dealers and banks
o Growth of market neutral and total return strategies
* Unbundling of securities lending
o Institutional investors are realizing bundling of securities lending with other custody services is not always optimal
o More programs moving towards portfolio auctions, third party agents and exclusive principal relationships
* Improved risk management techniques
o Application of investment industry disciplines
o Leveraging technology to reduce operational and legal risks

Sorry for the spacing...

Notice that "Increase in hedge fund activity has increased demand to borrow securities" is one of the reasons.

[antigop]

63. BBC: Fast bucks: How Porsche made billions (hedge fund with a carmaker attached?)

http://news.bbc.co.uk/2/hi/business/7843262.stm

Porsche is world famous for its iconic sports cars.

But car manufacturing isn't the only thing the company is good at.

Last year it made six times as much on the stock market as it did making cars.

Industry insiders are only half joking when they call it a hedge fund with a carmaker attached.

Porsche says its stock market trades are only for one reason: to take it towards its long term goal, the takeover of car making giant, Volkswagen.

Note this paragraph:

Hedge fund managers calculated that Volkswagen shares could not remain so high indefinitely and believed there was an opportunity to make some cash by short selling the shares - borrowing Volkswagen shares off a third party in the expectation that the price would fall so they would be able to buy them back cheaper, later and pocketing the difference.

Sure sounds like securities lending/borrowing, doesn't it?

[tclambert]

89. Um, after Madoff every time I hear of someone doing really well in the market, my first thought is,

is it a Ponzi?

[tclambert]

90. Might be a good name for a sports car, the Porsche Ponzi.

[DemReadingDU]

96. lol

:rofl:

[UpInArms]

65. it all sounds like

putting a nickel in a box and shaking it back and forth and thinking when you open the box it will yield a dime.

:shrug:

[antigop]

69. Isn't it sort of like making money by pushing pieces of paper around--electronically? n/t

[Demeter]

72. No Listing For "Fraud" or "Ponzi Scheme"? Tsk-Tsk

[Zenlitened]

64. "Merrill CEO spent $1 million+ to redecorate his office, even as firm faced financial crisis"

Thain is forced out today. Yeah, great. But if he leaves with even a single dime in his pocket, that's too much.

From The Daily Beast:

http://www.thedailybeast.com/blogs-and-stories/2009-01-22/john-thains-87000-rug/

In early 2008, just as Merrill Lynch CEO John Thain was preparing to slash expenses, cut thousands of jobs and exit businesses to fix the ailing securities firm, he was also spending company money on himself, senior people at the firm say.

(snip)

Big ticket items include: $87,000 for an area rug, four pairs of curtains for $28,000, a pair of guest chairs for $87,000 and fabric for a "Roman Shade" for $11,000.

The other big ticket items Thain purchased include: $87,000 for an area rug in Thain's conference room and another area rug for $44,000; a "mahogany pedestal table" for $25,000; a "19th Century Credenza" in Thain's office for $68,000; a sofa for $15,000; four pairs curtains for $28,000; a pair of guest chairs for $87,000; a "George IV Desk" for $18,000; 6 wall sconces for $2,700; six chairs in his private dining room for $37,000; a mirror in his private dining room for $5,000; a chandelier in the private dining room for $13,000; fabric for a "Roman Shade" for $11,000; a "custom coffee table" for $16,000; something called a "commode on legs" for $35,000; a "Regency Chairs" for $24,000; "40 yards of farbric for wall panels," for $5,000 and a "parchment waste can" for $1,400.

The documents also show that Thain signed off on the purchases personally.

[specimenfred1984]

68. Wouldn't it be fun to...

Stick his head in the $35,000 "commode on legs"? Let's just call it an "enhanced interrogation technique".

[specimenfred1984]

71. "Vares da money Lebowski"? LOL

I guess I'd have to pee on his $44,000 area rug too!

[bethdoc]

75. "It's down there somewhere, let me take another look. "

Love that movie.

[ozymandius]

81. When I am Kommissar - he will live in a moldy tent full of bean bag furniture.

Glad he's gone. He was a waste of money.

[Dr.Phool]

78. Wilbur Ross slithering out of the sewer to buy banks.

He's being interviewed o CNBC now.

[ozymandius]

82. closing numbers and blather

Dow 8,122.80 Down 105.30 (1.28%)
Nasdaq 1,465.49 Down 41.58 (2.76%)
S&P 500 827.50 Down 12.74 (1.52%)
10-Yr Bond 2.594% Up 0.068
NYSE Volume 6,893,681,500
Nasdaq Volume 2,332,301,000

4:35 pm : Stocks fell as much as 4.3% after opening the session with broad-based weakness, but mustered a rebound that took the stock market back to the unchanged mark. The rebound was short lived, however, as stocks turned in a 1.5% loss.

The session's negative bias stemmed from the tech sector (-2.3%), where bellwether Microsoft (MSFT 17.11, -2.27) underscored sector concerns by posting disappointing quarterly earnings and revenue results. Microsoft indicated it will not offer an outlook for the balance of this fiscal year. Though that removes a reporting hurdle for management, it limits transparency into the company.

Microsoft also announced it will eliminate up to 5,000 jobs. Meanwhile, fellow tech giant and Dow component Intel (INTC 12.82, -0.44) announced last evening restructuring plans expected to affect between 5,000 and 6,000 employees.

Apple (AAPL 88.36, +5.53) reported better-than-expected top and bottom line results for the latest quarter, but issued downside guidance. The company is typically overly cautious in its outlooks so the stock still traded higher. Apple's performance provided support to the tech sector. However, its strength shouldn't be projected across the industry, given the company's uniqueness stemming from such as the iPod and the iPhone.

With competition in the mobile handset market tight and global economic conditions waning, Nokia (NOK 12.30, -1.41) fell to a multiyear low after reporting earnings results that missed expectations. The mobile phone giant also gave a pessimistic outlook for industry volume.

The Nasdaq Composite Index traded with steeper losses than the other headline indices, despite leadership from Apple. The disproportionate weakness was partly fueled by the presence of regional banks like Fifth Third (FITB 2.85, -1.14) and Popular Inc (BPOP 2.46, -2.52). Both banks reported steep losses and had their credit ratings downgraded.

Financials, overall, remain a primary point of weakness. The sector finished 5.8% lower, though it was down 8.5% at its session low. Aflac (AFL 22.90, -13.37) was the primary laggard in the financial sector this session. It was sent to multiyear lows amid concerns regarding its investments in hybrid securities.

Bank of America (BAC 5.71, -0.97) also traded as a laggard, falling more than 14%. This was the fifth straight session shares of BAC have gained or lost at least 10%. Reports indicated former Merrill Lynch boss John Thain will be leaving Bank of America, though he was the one that initiated a deal between the two companies.

Only the health care sector (+0.2%) finished the session with a gain. Its advance was supported by UnitedHealth (UNH 27.19, +2.14) and Baxter International (BAX 56.77, +1.30). UnitedHealth reported in-line results and offered an in-line outlook. Baxter, meanwhile, posted better-than-expected earnings for the latest quarter.

Glum economic data did little to revive optimism in the broader market. Initial claims for the week ending Jan. 17 jumped 62,000 to 589,000. The consensus estimate called for 543,000 claims. Continuing claims gained 97,000 to nearly 4.61 million. The level of claims reflects persistently weak labor conditions, and suggests another decline for monthly nonfarm payrolls.

December housing starts totaled 550,000. They were expected to total 605,000. Housing starts for December were at their worst level in decades. Meanwhile, December building permits totaled 549,000. The consensus estimate called for 600,000 building permits.DJ30 -105.30 NASDAQ -41.58 NQ100 -1.5% R2K -3.1% SP400 -2.3% SP500 -12.74 NASDAQ Adv/Vol/Dec 670/2.32 bln/2008 NYSE Adv/Vol/Dec 674/1.56 bln/2385