STOCK MARKET WATCH, Friday March 6

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday March 6, 2009

Bush Administration Officials Under Indictment = 0
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 1

AT THE CLOSING BELL ON March 5, 2009

Dow... 6,594.44 -281.40 (-4.27%)
Nasdaq... 1,299.59 -54.15 (-4.00%)
S&P 500... 682.55 -30.32 (-4.25%)
Gold future... 927.80 +21.10 (+2.27%)
30-Year Bond 3.51% -0.19 (-5.22%)
10-Yr Bond... 2.82% -0.19 (-6.38%)

---

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

---

Handy Links

Economic Calendar    Marketwatch Data    Bloomberg Economic News    LayoffDaily    The Big Picture    Yahoo! Finance    Google Finance    Financial Sense    Calculated Risk    Naked Capitalism    Credit Writedowns    Brad DeLong    Bonddad    Atrios    LegitGov    Open Government    Earmark Database

---

Read more: du

[ozymandius]

1. http://www.financialsense.com/

You see this page because there is no Web site at this address.

See ya later financialsense.com....

[hamerfan]

15. With financialsense gone

I guess we ARE in trouble. Although nothing seems to make financial sense lately....
hamerfan

[DemReadingDU]

49. Parts of FinancialSense is back up, Market WrapUp

edit for Market WrapUp

Here is the Market WrapUp for March 5
Getting Uglier by the Minute
BY MICHAEL PANZNER
http://www.financialsense.com/Market/wrapup.htm




We regret that our educational website, www.financialsense.com, has been temporarily unavailable. Recent postings have now been uploaded to this alternate server until the website can be repaired. We will update our readers as more details become available.


Details on Virus Infection

On 4 March 2009, it came to our attention that www.financialsense.com had become infected with a new Trojan virus that had embedded itself in the website's code. This virus redirected our visitors to sites that attempted to download malicious software. In the interest of protecting our many visitors from infection by this virus, we immediately disabled the site and are in the process of diagnostic testing and rehosting of the site. We are making every effort to resolve this issue as quickly as possible; however, the full site may not be available until Friday, 6 March, or later, depending upon the severity of the impact of the virus on our site's code.

We appreciate your support and understanding as we resolve this issue.

—PFS Group/Financial Sense Staff, 4 March 2009 3:42 pm PST

http://www.financialsense.com/index.html


What other sites have been hacked?

[Tansy_Gold]

55. This sounds very similar to the trojan I picked up New Year's week-end

Just on my home computer it was a royal pain to get rid of it. I can't imagine for a major website. . . .

[DemReadingDU]

46. Martenson Crash Course site was hacked too

They're fine now

http://www.chrismartenson.com/blog/we-were-hacked/14481


Who are these malicious hackers?

[MattSh]

52. They're partially back on an alternate server.

[UpInArms]

59. what's now on the www. financialsense.com page

<snipping down>

Details on Virus Infection

On 4 March 2009, it came to our attention that www.financialsense.com had become infected with a new Trojan virus that had embedded itself in the website's code. This virus redirected our visitors to sites that attempted to download malicious software. In the interest of protecting our many visitors from infection by this virus, we immediately disabled the site and are in the process of diagnostic testing and rehosting of the site. We are making every effort to resolve this issue as quickly as possible; however, the full site may not be available until Friday, 6 March, or later, depending upon the severity of the impact of the virus on our site's code.

We appreciate your support and understanding as we resolve this issue.

—PFS Group/Financial Sense Staff, 4 March 2009 3:42 pm PST

[ozymandius]

2. Today's Reports

08:30 Average Workweek Feb
Briefing.com 33.2
Consensus 33.3
Prior 33.3

08:30 Hourly Earnings Feb
Briefing.com 0.2%
Consensus 0.2%
Prior 0.3%

08:30 Nonfarm Payrolls Feb
Briefing.com -650K
Consensus -650K
Prior -598K

08:30 Unemployment Rate Feb
Briefing.com 7.9%
Consensus 7.9%
Prior 7.6%

14:00 Consumer Credit Jan
Briefing.com -$4.0B
Consensus -$5.0B
Prior -$6.6B

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

[ozymandius]

40. Non Farm Payroll Day (Feb 09) - comments from Ritholtz

You know its been a wild week when the monthly NFP is almost an afterthought to the action.

According to Barron’s, consensus for Nonfarm Payrolls M/M change is a loss of -648,000; the range of estimates was -800,000 to -500,000

On Unemployment Rate, the consensus is a bump to 7.9%, and a range from 7.8% to 8.1%.

Under the best of circumstances this is a highly imprecise number that typically overstates job creation, and lags the overall economic cycle.

My best guess is that we will see an 8% handle on unemployment, 750k actual number...

http://www.ritholtz.com/blog/2009/03/non-farm-payroll-day/

[Roland99]

62. Non-Farm Payrolls down 651,000. Unemployment up to 8.1%

Dec rev'd down to 681,000 from 577,000.

[Roland99]

63. DJIA Futures have flipped from down to up and still rising.

Markets love those bad jobs numbers. Sucker rally underway!!

[Roland99]

69. And headed back down now. Hmmm...common sense taking hold?

[Dr.Phool]

90. Revisions. Was December just a guess? Missed by 20%?

[Pale Blue Dot]

103. I'm putting on my tinfoil hat for this one.

If these numbers were added to the February numbers, the figure would have been much worse than was expected. By adding these numbers to the January figures, it can be spun that job losses were less than were expected. Which is exactly what's happened in the media and elsewhere on DU.

[tclambert]

145. I already did a mea culpa for predicting job losses would be lower in February.

I'm not gonna take it back and claim a hit, though. A tabloid psychic might do that, but the obviously fair thing is to wait for revised numbers for February to come out, probably in April. Chances are that revision will worsen February's numbers, too. Unless maybe you want to suppose political manipulation by the Obama administration trying to shift the bad news prior to the inauguration.

The revised numbers of -681,000 in December, and -655,000 in January make it look like there were fewer job losses in January than December. With February at -651,000 that would make it LOOK (wink, wink, nudge, nudge) like like a trend from more miserable to less miserable. Maybe the propaganda department IS spinning the numbers. Crap, wouldn't it be nice if we could trust our own government?

[Demeter]

150. It Would Be Different, Certainly

But have we ever in recent memory been safe in trusting our government? There's always at least one stinker pulling a fast one==with Bush, they were all stinkers.

[pinqy]

114. Late reporting

Not all establishments report on time. The late reports are added in as revisions.

[UpInArms]

64. U.S. Feb. nonfarm payrolls down 651,000 - Jan., Dec. revised down by 161,000

01. U.S. Feb. average hourly earnings up 0.2%, up 3.6 yr-on-yr
8:30 AM ET, Mar 06, 2009

02. U.S. Feb. temporary help agencies lose 78,000 jobs
8:30 AM ET, Mar 06, 2009

03. U.S. Feb. construction jobs down 104,000
8:30 AM ET, Mar 06, 2009

04. U.S. job losses total 4.4 mln since recession began in 12/07
8:30 AM ET, Mar 06, 2009

05. U.S. nonfarm payrolls for Jan., Dec. revised down by 161,000
8:30 AM ET, Mar 06, 2009

06. U.S. Feb unemployment rate highest since Dec. '83
8:30 AM ET, Mar 06, 2009

07. U.S. Feb. unemployment rate 8.1% vs 7.6% in Jan.
8:30 AM ET, Mar 06, 2009

08. U.S. Feb. nonfarm payrolls down 651,000 vs 650,000 expected
8:30 AM ET, Mar 06, 2009

[UpInArms]

65. Payrolls sink 651,000, jobless rate soars to 8.1% - 2.5 million jobs lost in last four months

http://www.marketwatch.com/news/story/Payrolls-down-651000-Feb-jobless/story.aspx?guid=%7B3C16959C%2DFFFD%2D45BF%2D848F%2D9B36B187AB24%7D

WASHINGTON (MarketWatch) - The weakness in U.S. labor markets has gathered extraordinary momentum, wiping away more than 2.5 million jobs over the past four months alone, the Labor Department reported Friday.

The U.S. economy lost 651,000 jobs in February, the fourth month in a row where job losses were near or above 600,000.

The unemployment rate soared to 8.1%, the highest rate in over 25 years.

Job losses in February were close to expectations. But the government also revised job losses in the past two months down by 161,000 jobs.

Job losses in December, now pegged at 681,000, was the biggest monthly decline in jobs since 1949.

Average hourly earnings rose by 3 cents, or 0.2%, to $18.47 an hour, in line with expectations. Average wages have risen 3.6% in the past year.

According to the survey of business establishments, 660,000 jobs were lost in the private-sector in February. Goods-producing industries shed 276,000 jobs, while services lost 375,000.

Job losses were widespread across industries. Only education and health services reported job gains.

The economy has lost 4.4 million jobs since the recession began in December 2007.

...more...

[Ghost Dog]

73. U.S. February payrolls fall 651,000; jobless rate 8.1 percent

WASHINGTON (Reuters) – U.S. employers axed 651,000 jobs in February, pushing the unemployment rate to its highest in 25 years, as companies buckled under the strain of a recession that is showing no signs of ending, according to a government report.

While that figure was near economists' expectations for a 648,000 drop in non-farm payrolls, January and December job losses were revised sharply higher.

The Labor Department on Friday said the unemployment rate surged to 8.1 percent in February, the highest level since December 1983. That was above market forecasts for a rise to 7.9 from January's 7.6 percent.

January's job cuts were revised to show a steep decline of 655,000, while December's payrolls losses were adjusted to 681,000, the deepest since October 1949. Since the start of the recession in December 2007, the economy has purged 4.4 million jobs, with more than half occurring in the last 4 months.

...

The manufacturing sector shed 168,000 jobs in February, after eliminating 257,000 positions the prior month. Construction industries bled 104,000 jobs in February after losing 118,000 in January. The service-providing industry slashed 375,000 positions after shedding 276,000 in January.

/... http://news.yahoo.com/s/nm/20090306/bs_nm/us_usa_economy;_ylt=Akg7a3q.FEpUXK.k4i3qL_e573QA

[UpInArms]

133. U.S. Jan consumer credit up after 3 months of sharp declines

01. U.S. Jan. consumer credit up at 0.8% rate
3:01 PM ET, Mar 06, 2009

02. U.S. Jan. consumer credit up $1.76 billion
3:01 PM ET, Mar 06, 2009

http://www.marketwatch.com/news/story/US-Jan-consumer-credit-up/story.aspx?guid=%7B281AD256%2D1965%2D420D%2DAD74%2D3E966E57B61C%7D

WASHINGTON (MarketWatch) -U.S. consumers increased their debt in January after three months of sharp declines. Total seasonally adjusted consumer debt rose $1.76 billion, or a 0.8% annual rate, in January to $2.56 trillion, the Federal Reserve reported Friday. Consumer credit fell by an average of $6.98 billion over the past three months. Credit-card debt had the biggest gain in January rising $926.52 billion, or 1.2% to $961.32 billion. Non-revolving credit - such as auto loans, personal loans and student loans - rose $830 million or 0.6% to $1.60 trillion.

[tclambert]

146. Yay! credit is up! Wait, that's what got us into this mess, isn't it?

Is this good news or bad news? I can't tell anymore.

[Tansy_Gold]

148. With all the layoffs and job losses over the past few months

I suspect it's because people have gone through their savings and are hitting the credit cards for living expenses. We know it isn't new car sales or home sales, so it's gotta be smaller ticket items.


Tansy Gold, who admits to adding about $400 to the total for her trip to Chicago.

[ozymandius]

3. Oil rises above $44 despite grim US corporate news

SINGAPORE – Oil prices rose above $44 a barrel Friday in Asia on investor optimism that falling U.S. gasoline costs amid the worst recession in decades may increase demand for crude.

Benchmark crude for April delivery rose 90 cents to $44.51 a barrel by late afternoon in Singapore on the New York Mercantile Exchange.

....

Oil prices fell $1.77 on Thursday to settle at $43.61 a barrel as the Dow Jones industrial average dropped 4.1 percent to a fresh 12-year low on concern General Motors Corp. may face bankruptcy and worries about Citigroup and other big banks.

....

In other Nymex trading, gasoline for April delivery was steady at $1.34 a gallon, while heating oil was steady at $1.16 a gallon. Natural gas for April delivery was up 3.3 cents at $4.12 per 1,000 cubic feet.

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

[ozymandius]

4. FDIC's Bair warns on bank deposit insurance fund

WASHINGTON – The head of the Federal Deposit Insurance Corp. has warned that the fund insuring Americans' bank deposits could be wiped out this year without the money the agency is seeking in new fees from U.S. banks and thrifts.

FDIC Chairman Sheila Bair acknowledged, in a letter to bank CEOs, that the new increased fees and hefty emergency premium the agency voted to levy last week will bring a "significant expense" to banks, especially amid a recession and financial crisis when their earnings are under pressure.

....

As loan defaults have soared, reflecting the ravages of rising unemployment and sliding home prices, bank failures have cascaded and sapped billions out of the fund that insures regular accounts up to $250,000. The fund now stands at its lowest level in nearly a quarter-century, $18.9 billion as of Dec. 31, compared with $52.4 billion at the end of 2007.

....

The new emergency premium, to be collected from all federally insured institutions on Sept. 30, will be 20 cents for every $100 of their insured deposits. That compares with an average premium of 6.3 cents paid by banks and thrifts last year.

http://news.yahoo.com/s/ap/20090304/ap_on_bi_ge/fdic_bank_fund_warning

[DemReadingDU]

36. Bair: Some have suggested that we should turn to taxpayers for funding

More from the article
Bair said the plan protects bank depositors as well as taxpayers, because it likely means the FDIC won't have to go to the Treasury Department and tap public money to replenish the insurance fund.

Bair has not ruled out that possibility for a short-term loan, but said she doesn't expect to take the more drastic action of using its $30 billion long-term credit line with Treasury — something that has never been done.

"Some have suggested that we should turn to taxpayers for funding," she said in her letter to the bank executives. "But banks — not taxpayers — are expected to fund the system, and I believe Congress would look skeptically on such a course of action."

Furthermore, she said, turning to taxpayers "could open up a whole new debate about the degree of government involvement in the affairs of insured banks."


edited subject line

[ozymandius]

5. Bank of America sees grave harm from bonus reveal

NEW YORK (Reuters) – Bank of America Corp (BAC.N) said it could suffer "grave harm" if it is forced to reveal data about an estimated $3.6 billion of bonuses paid to Merrill Lynch & Co officials in the days before the bank acquired the brokerage.

In a petition filed late Wednesday in a New York state court in Manhattan, the bank urged Justice Bernard Fried to reject New York Attorney General Andrew Cuomo's demand for the data, which the bank believes should be kept confidential.

....

Bank of America said revealing the data could help rivals poach talent, prompt employees to leave because their privacy was violated, cause "internal dissension and consternation," increase security risks for bonus recipients, and give rivals a better idea of which businesses it considers most valuable.

http://news.yahoo.com/s/nm/20090305/bs_nm/us_bankofamerica_merrill_bonuses_1

---

Let's take this point-by-point.

Talent? The company's shares are trading at just over $3. Internal advice directed them to buy Merrill Lynch. And this is the result of having talent?

BAC is planning to downsize anyway. So why would they not want employees to leave? Oh Wait! Does this have something to do with talent going away?

Internal dissention and consternation: you mean some people might get their feelings hurt?

Security risks: I guess. To me, just claiming to be a Bank of America executive could put one in harm's way.

If you are a publicly traded company, your rivals can see for themselves which businesses are more valuable by looking at the 10-K reports filed with the SEC.

So I do not buy any of this nonsense.

[Demeter]

9. Harm,,,,Harm,,,,

Oh come now, Bank of America Nobody ever died of ridicule, and to date no one's been prosecuted for being financially stupid. Hell, it's rewarded by treasury hand-outs!

These Big Guys are far too sensitive!

[ozymandius]

13. The sure sign that Friedman's ideas are dead.

The corporation is trying to be ethical. It wants to protect the privacy of its employees. Heh.

[tclambert]

78. You might want to cut off this corpse's head and put a stake through its heart to make sure.

A lot of the arguments from Republicans seem like things that got killed in the 1930s. Yet they came back.

[Tansy_Gold]

93. Or, you're talkin about Friedman? I thought you meant the BofA execs.

silly me.

:evilgrin:

[UpInArms]

97. reminds me of a lawsuit - bush v gore

in which bush would be "harmed" if the votes were counted

:puke:

[AnneD]

110. Show me the Talent !!!!!!

Show me the Talent !!!!!

Maybe then we can show you the money!

[ozymandius]

6. Asian stocks resume slide after US rout; Europe up

HONG KONG – Asian stock markets resumed their downward slide Friday after Wall Street fell to its lowest levels in more than 12 years amid deepening fears about the fate of General Motors Corp. and major financial companies. European markets were mixed in early trade.

....

Investors, already deflated after Beijing failed to deliver, were forced to grapple with a warning from General Motors that the struggling automaker may have to file for bankruptcy.

....

European markets mostly followed Asia lower in early trade. Britain's FTSE 100 gained 0.3 percent, Germany's DAX was down 0.1 percent and France's CAC-40 fell 0.4 percent. Wall Street was also headed for a weaker open as stock futures traded lower. Dow futures were down 31 points, or 0.5 percent, at 6,600 while S&P500 futures fell 2.8, or 0.4 percent, to 683.30.

....

Japan's Nikkei 225 stock average fell 260.39 points, or 3.5 percent, to 7,173.10, while Hong Kong's Hang Seng shed 289.72, or 2.4 percent, to 11,921.52. South Korea's Kospi was off 0.3 percent at 1,055.03.

Elsewhere, Shanghai's benchmark swooned 1.3 percent, Australia's stock measure was 1.4 percent lower and Singapore's key index shed 0.8 percent.

http://news.yahoo.com/s/ap/20090306/ap_on_bi_ge/world_markets

[Ghost Dog]

31. Or, as Reuters has it: China sees economic recovery; rich world sinks deeper

Fri Mar 6, 2009 2:58am EST BEIJING , March 6 (Reuters) - China served glum markets a dose of optimism on Friday, saying its economy was recovering and promising more swift action to absorb the shock of the global financial crisis and deepening recession in rich nations.

Top Chinese officials said substantial fiscal and monetary stimulus was breathing life back into the world's third-biggest economy hit by crumbling exports, suggesting Beijing saw no need to boost the existing investment plan of nearly $600 billion.

"The economic figures are stabilising and recovering, which demonstrates that the policies have begun to show an impact," central bank governor Zhou Xiaochuan told a news conference during the National People's Congress.

China's optimism was not expected to be shared by the world's largest economy later on Friday, with forecasters expecting grim numbers when the key U.S. February payrolls report is released.

Zhou said China had learned the lesson from other countries that a sluggish response to the crisis delayed the restoration of confidence.

"We must err on the side of being quick and decisive."

Zhou was speaking a day after Premier Wen Jiabao said China would ramp up deficit spending this year to hit its target of 8 percent growth, even though he failed to announce an increase to the two-year stimulus plan that financial markets had hoped for.

Beijing's quiet confidence stands in contrast with increasingly gloomy predictions for the United States, the euro zone, Japan, Britain and other industrial nations, all mired in the most severe downturns in decades.

...

Jeffrey Lacker, president of the Richmond Federal Reserve and a voting member of the Federal Open Market Committee, sought to dispel the gloom, saying the U.S. economy may join China and start recovering before the end of this year.

...

Asian stocks also fell, unsettled by GM's troubles and lingering fears of more turmoil in the financial sector. Tokyo's Nikkei average closed down 3.5 percent at a four-month low.

"I'm worried about America and the place where we can place our hopes now is China," said Yoku Ihara, manager at Retela Crea Securities.

Hopes that China may boost its stimulus plan sparked a brief rally in global stocks earlier this week.

But the latest assurances from Beijing and suggestions that they still had plenty of ammunition to support the economy failed to cheer up investors ahead of the U.S. February payrolls report, the key gauge of the U.S. economy's health.

/... http://www.reuters.com/article/marketsNews/idINSP48069220090306?rpc=44&sp=true

[Ghost Dog]

33. Japan hits 25-year low, but China hopes help Asia

Friday March 6, 2:24 am ET HONG KONG (Reuters) - Japan's broad TOPIX stock index slid to a 25-year low on Friday after a warning from General Motors (NYSE:GM - News) about possible bankruptcy slammed Wall Street, but hopes for more stimulus spending in China limited losses in most Asian markets.

World stocks struck a six-year low (^MIWO00000PUS - News) on the drop in Japan, which was led by shares in the country's big exporters and banks, with investors spooked after shares in Citigroup (NYSE:C - News) fell below $1 the previous day.

...

Asian equity markets held up better than their counterparts in the United States and Europe, thanks partly to hopes that China will boost its planned $585 billion in infrastructure spending to help offset the damage from collapsing exports.

China's central bank chief, Zhou Xiaochuan, said on Friday that he sees signs of the economy recovering and officials would err on the side of acting sooner rather than later to revive growth in the world's third largest economy.

The dollar retreated and oil prices climbed in a slight reversal of Thursday's moves sparked by the stock market slide, while Japan's woes pushed investors into safe-haven government bonds.

Japan's TOPIX (^TOPX - News) shed 2.7 percent to hit its lowest since December 1983, while the Nikkei (Osaka:^N225 - News) lost 3.5 percent to be less than 200 points above a 26-year low hit last October.

The MSCI index of Asia-Pacific stocks outside Japan (^MIAPJ0000PUS - News) was down 0.5 percent. Australia (ASX:^AXJO - News) fell 1.4 percent and Hong Kong (HKSE:^HSI - News) shed 1.6 percent.

...

But Merrill Lynch analysts said in a research note that there were several signs that Asia's economies were starting to stabilize, including a recovery in Chinese manufacturing and Korean exports to China.

Highlighting the see-saw nature of Asia markets, the South Korean won -- the most battered of regional currencies -- recovered to post gains on the day after initially falling to an 11-year low.

For a graphic on how Asian markets have outperformed the U.S. and Europe since hitting bottom in November, see:



/... http://biz.yahoo.com/rb/090306/business_us_markets_global.html?.v=1
____

Japan's Financial Services Agency plans to extend curbs on short-selling of stocks beyond the end of this month, two sources familiar with the matter said, but the news appeared to have little impact on the stock market, analysts said.

Market participants have said buying by what they believe to be public pension funds has been supporting the benchmark when it approaches the 26-year low of 6,994.90 hit in late October.

/... http://www.reuters.com/article/marketsNews/idCAT17898520090306?rpc=44

[Demeter]

7. That Cartoon Is Just Gross

But since nothing Rush has done so far has earned him more than a slap on the wrist, we are stuck with him, unless the Obama Justice Department can prosecute him....but that wouldn't be bipartisan, would it?

If Bush had any brains, he would have plugged this big leak in the GOP propaganda system....or sent Cheney to plug him!

[ozymandius]

10. Plug?

Ewwwwwww. :puke:

[Demeter]

12. You Started It

[ozymandius]

17. And I'll let chickenhead.com finish it.

Something for the Fearless Leader...

[Demeter]

19. Hey, I Admit It!

Any guy can out-gross any girl any day. It's nothing to be proud of!

[ozymandius]

21. Heh. Indeedy.

My six-year-old son is in training right now. He's blazing new trails in grossology.

[AnneD]

101. Morning Marketeers....

:donut: and lurkers. Ozy, I do have to laugh about your little son.You never sat at our family table at dinner time. At one time Step Dad worked for an ambulance company, I always leaned toward a career in medicine, everyone had a farm background, and I had 2 brothers. Our games of Gross Out at the dinner table were not for the faint of heart. My younger sis must have eaten only every other dinner during her childhood. I remember her frequently leaving the diner table, hand over mouth and having an olive pallor. We would feel bad............for all of 3 seconds. Then we would high five each other and split her portion of food. We were just evil. She went on to become a model for a while. She always said that the secret to her remaining slim was remembering some of our Gross Out conversations. Everyone got grossed out at one point or another-except MOM. :spray: Thanks for triggering memories of one of my crazier childhood memories.

Happy hunting and watch out for the bears.

[Dr.Phool]

41. Colbert skewered him last night.....hypothetically

[ozymandius]

8. Delinquent mortgages reach U.S. record of 8.63%

Mortgage delinquencies rose to record levels nationwide with 8.63% of all loans past due in the fourth quarter, according to Mortgage Bankers Association data released Thursday.
Advertisement

And in Michigan, 11.08% of nearly 1.48 million mortgages were at least 30 days past due but not yet in foreclosure. Those in foreclosures were 3.7% of the outstanding loans, the association said.

Jay Brinkmann, the association's chief economist, said that the subprime loan defaults were still a problem, but prime loan delinquencies were starting to rise along with unemployment.

....

Brinkmann said that five states -- California, Florida, Nevada, Arizona and Michigan -- continue to dominate the delinquency numbers. Yet five other states -- Louisiana, New York, Georgia, Texas and Mississippi -- had the sharpest increases last quarter in loans 90 days or more late, which are signs that the recession's impact is spreading, he said.

http://www.freep.com/article/20090306/BUSINESS04/903060373/1017/Delinquent+mortgages+reach+record+of+8.63+

[Demeter]

11. That's Almost Par with Michigan's 11.6% Unemployment Rate

The rest of the paperwork must still be in process.

[Demeter]

14. House approves mortgage bankruptcy overhaul

http://news.yahoo.com/s/nm/20090306/pl_nm/us_mortgage_bankruptcy_house_2

WASHINGTON (Reuters) – Bankruptcy judges could cut the mortgage debt of homeowners in bankruptcy court as a last resort to avert foreclosure, under a bill approved by a 234-191 vote on Thursday in the U.S. House of Representatives.

Seen by Democratic supporters as vital to stabilizing the crumbling U.S. real estate market, the so-called "cramdown" bill has been opposed by bankers, despite amendments made this week to limit its scope, including one restricting it to existing primary residence mortgages, not future loans.

The Senate was expected to consider its own version of the House bill soon, but chances of passage are uncertain there.

The House bill has additional provisions meant to help homeowners in the worst housing market in decades, a slump that has helped pull the U.S. economy into a deepening recession.

Under present law, bankruptcy courts may reduce many forms of debt for struggling borrowers -- including a boat, car, vacation home or family farm -- but not a primary residence.

Changing bankruptcy law to allow this, say bankers and Republican opponents of the bill, would raise costs for everyone by diverting capital from the mortgage debt market.

But Democrats backing the bill discount such fears and say it could sharply cut the high U.S. home foreclosure rate....

WELL, WE'LL SEE, MAYBE, IF HARRY REID DOESN'T MANAGE TO DROP THIS BALL...PERSONALLY, I THINK IT'S WAY TOO LATE FOR THIS TO WORK.

[ozymandius]

37. This would have been just wonderful about a year ago.

Right now, it is analogous to closing the barn door after all the livestock have fled and the fire has claimed all but the hinges.

[Demeter]

16. If It's "Too Big to Fail," Then It's Too Big to Be Private

http://www.smirkingchimp.com/thread/20584

...The term "too big to fail" is a euphemism for any institution that is so important to the entire nation's most basic well being, that society cannot let that institution fail. This is why one of the foundational principles of civilized society has always been nationalization - ie. government control - of the institutions that are "too big to fail": institutions like the military, whose failure would mean a basic loss of national security; law enforcement, whose failure would mean a basic loss of civil order; and infrastructure construction, whose failure would mean the crumbling of commerce. The government, as the most powerful representative of society as a whole, runs these institutions/services because they are too important to be allowed to fail.

Unfortunately, the hard-right and center-right ideologues who ran the government for the lat 30 years gutted the basic laws and enforcement mechanisms (financial regulations, anti-trust prosecutions, etc.) that prevented a myriad of financial institutions from becoming "too big to fail."

The American Insurance Group is the best example of this - a company that, as the New York Times notes, essentially based its business on a risky scheme to sell insurance to other corporations against colossal housing market failure. This allowed huge banks and investment houses to effectively offload their own absurdly risky housing investments by "insuring" those investments against loss with AIG - a shuffling of paper and deep-frying of books that let those banks leverage themselves even more, sans regulation. When the housing bubble burst and the banks called in their insurance, AIG was asked to pay up, and it couldn't, because it never expected to have to back up its insurance policies. But because AIG was so big - because it had so singularly cornered the market on such insurance and had essentially become the insurer of last resort - it couldn't eventually pay up, its failure would result in a cataclysmic ripple effect of defaults.

So now everyone is focused on the short-term question: Should we temporarily nationalize AIG and the biggest banks, or should we keep forcing taxpayers to get all the downsides of nationalization (ie. throwing money at the companies) without any of the upsides (ie. ownership of the companies, power to throw out management, etc.)? Obviously, I'd say the former, but I'd go a step further: When it comes to an AIG - a company that is effectively ensuring the rest of the economy against loss - we shouldn't temporarily nationalize it, we should permanently nationalize it, or at least its core functions.

As I wrote in an earlier post, we shouldn't be afraid of permanent nationalization, because it is - thankfully - already all around us. Indeed, in some sectors of the economy, we have embraced nationalization thanks to an era where our government at least considered the possibility that if a function or service or entity is too big to fail, it is too big to be private.

That era's government believed a minimum retirement benefit and health insurance for the elderly is a "too big to fail" kind of function - too important to be subjected to the whims of the private marketplace. So we now have government-run Social Security and Medicare. That era's government also created the Pension Benefit Guaranty Corporation, which nationalized the catastrophic insurance of pension plans. It forces corporations to pay premiums that underwrite a fund that pays out the pensions of companies that go bankrupt. The government deemed that function - catastrophic pension insurance - as a "too big to fail" kind of function, understanding that if the service was in private for-profit hands, there would be a risk of that private venture overleveraging itself, and then failing when it needed to pay out retirement benefits to millions of Americans.

Now, clearly, it's time to resurrect the principle that if something is too big to fail, it's too big to be private. We can resurrect that principle both through far tougher regulation that prevents individual private institutions from ever becoming so singularly important to our nation,* and by nationalizing the few core functions and services that are probably best left to the government as insurer of last resort. In the former category, that means much stronger financial regulation, and in the latter category it means some kind of nationalization of basic market insurance (and, I might add, health insurance).

If ever there was a time that the country was ready for this kind of back-to-what-made-us-great argument, that time is now.

* A key point here is the word singular: There is some safety in diversification and numbers - for instance, if a crucial function of the economy is handled by multiple businesses, then the failure of one of those businesses should (theoretically) pose much less danger to the overall economy than if that business was so singularly or monopolistically crucial as in the case of AIG.
_______


About author

David Sirota is a political strategist and NY Times bestselling author whose work appears in major newspapers and magazines. He has appeared on CNN, MSNBC, CNBC and The Colbert Report. He has appeared in TV debates with right-wing icons like Ann Coulter, John Stossel and John Fund. Email: david davidsirota.com.

[radfringe]

22. even dinosaurs died out

because they were too big to survive a changing environment...

the fiancial environment has changed - and these blobulous mega-corps must radically change or die.

[ozymandius]

24. I believe that there will be a Citi for decades to come.

Though the changes of which we speak bring to mind images of a Citibank that, in its entirety, fills a 600 square foot office.

[Demeter]

27. In the Caymans, Most Likely

Or Antigua. I hear they have an opening for a bank down there...

[ozymandius]

30. Do they still have openings for 90 year-old auditors?

I've heard they appreciate auditors with decades of experience. Consciousness is not a pre-requisite for employment - so they say.

[tclambert]

74. And asteroid 2009 DD45 just missed us Monday.

Well, 45,000 miles. When the gods play darts, that's pretty close.

[Demeter]

87. Stop Looking For an Easy Way Out

there ain't gonna be no Rapture, either!

[Hugin]

100. THANK GAWD IT PASSED!!!i!!

Sorry, couldn't resist...

Hey, how come they always spot these things after they've gone by?

[AnneD]

112. Same reason....

you never know you flew into a swarm of bugs until after they hit your windshield.

And as Mom is fond of saying-Some days you're the bug, some day's you're the windshield.

[Demeter]

151. Asteroids Are Usually Spotted Well In Advance

They just don't announce until after the "danger" is past, to keep the sheep from panic. You know they would panic, too. Look at how they take after burnt toast, pancakes and other idiocies.

For heads up on Near Earth Asteroids, as they are known in the trade, check out this website:

http://spaceweather.com/

They also have an email alert system!

[ozymandius]

32. The $700 trillion elephant

SANTA MONICA, Calif. (MarketWatch) -- There's a $700 trillion elephant in the room and it's time we found out how much it really weighs on the economy.

Derivative contracts total about three-quarters of a quadrillion dollars in "notional" amounts, according to the Bank for International Settlements. These contracts are tallied in notional values because no one really can say how much they are worth.

But valuing them correctly is exactly what we should be doing because these comprise the viral disease that has infected the financial markets and the economies of the world.

Try as we might to salvage the residential real estate market, it's at best worth $23 trillion in the U.S. We're struggling to save the stock market, but that's valued at less than $15 trillion. And we hope to keep the entire U.S. economy from collapsing, yet gross domestic product stands at $14.2 trillion.

Compare any of these to the derivatives market and you can easily see that we are just closing the windows as a tsunami crashes to shore. The total value of all the stock markets in the world amounts to less than $50 trillion, according to the World Federation of Exchanges.

....

Few know what derivatives are worth. I spoke with one derivatives trader who manages billions of dollars and she said she couldn't even value her portfolio because "no one knows anymore who is on the other side of the trade."

http://www.marketwatch.com/news/story/700-trillion-elephant-room/story.aspx?guid={024DB809-8506-4AA9-83BB-B053FD4E1C11}&dist=TNMostRead

[tclambert]

70. "Notional value?" What a concept.

I've got a notion they may not have much value a-tall.

These people are trading imaginary money in imaginary "investment devices." Why don't we let them continue to play their game over in the newly expanded financial wing at Happydale?

[Kip Humphrey]

38. Like, Duh! If its too big to fail it needs to be broken up.

[ozymandius]

45. Bank Rescue Programs: Setting the Stage for More Looting?

We have sometimes pointed to a paper by Nobel prize winner George Akerlof (of "markets for lemons" fame) and Paul Romer on the phenomenon of looting. Forgive us for repeating ourselves, but this paper was written in the wake of the savings and loan crisis, and was clearly ignored, because if anyone had heeded their message, we wouldn't be in the mess we are in.

Akerlof and Romer define looting as an upscale version of bankruptcy fraud, except that bankruptcy fraud gets prosecuted (in theory) but the white collar rent seeking version, where executives and staff pay and perk themselves to the point where it derails the business, somehow never is pursued in the US. From their abstract:

Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.

Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations. The most obvious such guarantee is deposit insurance, but governments also implicitly or explicitly guarantee the policies of insurance companies, the pension obligations of private firms, virtually all the obligations of large or influential firms. These arrangements can create a web of companies that operate under soft budget constraints. To enforce discipline and to limit opportunism by shareholders, governments make continued access to the guarantees contingent on meeting specific targets for an accounting measure of net worth. However, because net worth is typically a small fraction of total assets for the insured institutions (this, after all, is why they demand and receive the government guarantees), bankruptcy for profit can easily become a more attractive strategy for the owners than maximizing true economic values...

Unfortunately, firms covered by government guarantees are not the only ones that face severely distorted incentives. Looting can spread symbiotically to other markets, bringing to life a whole economic underworld with perverse incentives. The looters in the sector covered by the government guarantees will make trades with unaffiliated firms outside this sector, causing them to produce in a way that helps maximize the looters' current extractions with no regard for future losses...."

This was written in 1994.

http://www.nakedcapitalism.com/2009/03/bank-rescue-programs-setting-stage-for.html

[Demeter]

18. Dave Lindorff: Kiss the Banks Goodbye and Refocus on Rebuilding the American People

http://www.buzzflash.com/articles/lindorff/209


The futility and stupidity of the Fed's and the Obama Administration's policy of pumping ever more money into failing banks and insurance companies in a vain effort to get them lending again was demonstrated -- if anyone was paying attention -- by the collapse in auto sales this past month, with all the leading companies -- Ford, GM and Toyota -- reporting sales down by about 40%.

This fall off in car buying was despite record discounting by the auto industry, and offers of 0% financing. Clearly, obtaining financing is not the reason people are not buying cars. People are not buying cars because they are worried about having a job to enable them to pay back the loan.

It's the same reason people aren't buying houses. It's not that you cannot get a mortgage. There are plenty of smaller banks that would be happy to lend money to buy a house these days. But who's going to go out and buy a house in this economy? First of all, to buy a house, unless you are a first-time buyer, you have to sell your current house, but that would mean taking a huge loss. Indeed, one in five homes in America today is technically "underwater" -- that is, it is worth less than the outstanding mortgage on the property. Probably another one in five are worth little more than the outstanding mortgage. No one would sell a house under either such circumstance.

The point here is that if people aren't willing to spend money, then what good is it to give more money to banks and their shareholders, in hopes that they will start lending it? The lending business has two sides -- those offering to make a loan, and those wanting to borrow. If there's no borrower, no amount of money available for lending is going to change the fact that there will be no loans written.

Commercial lending is not that different in this regard. Companies generally borrow money to expand. You don't need to borrow money when your business is shrinking, unless it is to try and stave off collapse. What a company does when its markets contract and its sales and earnings fall is cut back on production and lay off workers. It doesn't need to borrow money to do this. If sales collapse too fast, the company could be caught owing back wages to workers. That's true. And in that case, a company might want to borrow in order to meet its obligations, but that's hardly the kind of loan a bank would want to make -- to a dying enterprise unable to meet payroll.

Business borrows when it is expanding, because that's a great investment. If you know that you can earn a 15% return on your investment in a period of economic growth, and you can borrow money for expanded production at 4%, that's a great deal. It's also a great deal for the bank, since lending to a company that is expanding is a pretty low-risk proposition. The central government wouldn't have to press banks to lend to such companies. The banks would do it on their own.

With the economy still in free fall, with companies laying off American workers at a rate of over 20,000 per day, with real unemployment soaring past 18 percent -- one in six American workers are now either out of work and looking for a job, out of work and giving up looking, or involuntarily working part-time -- and with family wealth more than 50% eroded away, there is simply no way that Americans are going to turn around and start borrowing and spending again. And given that the American economy is 72% composed of consumer spending, there is no way that the economy is bouncing back anytime soon.

That means that the hundreds of billions of dollars being poured into the likes of Citibank and AIG are being completely wasted. It is simply a pointless and scandalous transfer or wealth from the American public to the shareholders of these companies -- the very companies and people who caused this catastrophe in the first place.

If you wanted evidence of this futility, just check out the current market capitalization (the current value of all shares of a company) of Citigroup and AIG. Citigroup, despite having received $75 billion in taxpayer bailout money, is now worth $5.4 billion -- which is less than Autozone, a chain of car parts stores, and less than H&R Block, the franchise chain of tax preparers. As for AIG, which has received an astonishing $180 billion in taxpayer bailout funds, its total market value today is less than $1 billion! All that bailout money has been lost into thin air, and the government today could buy both companies outright for about what it's blowing every month in Iraq.

It's time to put a stop to this farce.

Restoring the American economy is not going to be a matter of simply jump-starting consumer spending, or even business investment. It's going to take a long, hard, focused effort to move away from a parasitic consumer economy in which profits are largely made through speculation, and towards a real economy that actually makes things that people both here and around the world need.

The sooner this truth is recognized, the more resources the government will still have left to put into the kind of investments that can help make that happen -- things such as job creation, income supports, home refinancings, and medical system reform that could help Americans get back on their feet. Of course, it would also be necessary to end the wars overseas and to dramatically slash military spending.

When former companies such as Citicorp and AIG are history, and when former Lehman Brothers, Citibank, and AIG managers, as well as most of the Pentagon Brass, are out working at civilian conservation corps camps helping to restore watersheds or replant forests, we will know the government finally "got" it.

DAVE LINDORFF is a Philadelphia-based journalist. His latest work is "The Case for Impeachment" (St. Martin's Press, 2006). His work is available at www.thiscantbehappening.net.

[Fumesucker]

39. Thank Gawd It Passed..

If you wanted evidence of this futility, just check out the current market capitalization (the current value of all shares of a company) of Citigroup and AIG. Citigroup, despite having received $75 billion in taxpayer bailout money, is now worth $5.4 billion -- which is less than Autozone, a chain of car parts stores, and less than H&R Block, the franchise chain of tax preparers. As for AIG, which has received an astonishing $180 billion in taxpayer bailout funds, its total market value today is less than $1 billion! All that bailout money has been lost into thin air, and the government today could buy both companies outright for about what it's blowing every month in Iraq.

I have only one thing to say about this..

:puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke: :puke:

[ozymandius]

44. The Latest Craze: Blue Chip Penny Stocks

(again, Ritholtz)

Here’s a short list of only the highest quality, bluest of blue chip, penny stocks:

* AIG (39 cents)
* Citigroup (98 cents)
* E*Trade (66 cents)
* Fannie Mae (39 cents)
* Freddie (39 cents)
* Unisys (37 cents)

Given the trading volumes, you might think these were real firms or something!

[Tansy_Gold]

43. Let's see. How long have we been screaming the JOBS mantra here?

At least it's good that it's being screamed from other rooftops now, too.



Tansy Gold, way behind this morning's schedule

[ozymandius]

48. My fingers can type these words anymore through muscle memory:

Economic sustainability and viability cannot be achieved without the restoration of our manufacturing base.

There. I've said it again.

[tclambert]

85. According a WSJ article, 3 million jobs added under Bush in 8 years, vs. 23 million under Clinton

Imagine where America would be with 20 million more jobs. Sigh. Unemployment would be around zero. Hell, we'd have a labor shortage. Employers would increase wages and benefits just to retain employees. And they'd call for easing immigration restrictions so they could bring in more workers. Employed people would buy cars and houses, and pay their mortgages. No bailouts. No bailouts at all.

The people who voted for Bush owe the rest of us trillions of dollars.

[wovenpaint]

107. Amen!

This article warrants it's own thread for all to read. I'll K&R for sure!
Thanks for posting it...:hi:

I've been asking this all along. What good are tax cuts, tax incentives, easy loans, etc. if we don't have a source of income in the first place??

[Tansy_Gold]

109. Welcome to our world, wovenpaint

:hi:

[wovenpaint]

122. Thanks, Tansy!

Been lurking here daily for the valuable education that you all provide so generously-thanks all.
TG posts provide me with comic relief,too - I love your style!
I look forward to reading SMW every morning...for good or bad. It's really helped me to somewhat understand this situation -and has enabled me to help educate others as well.
Knowledge is power.
:yourock:

[AnneD]

121. Here is some no brainer proof that it's all about jobs......

the only care company that did well was Honda. They offered a deal that if you were laid off in the next 2 years-you could return your car. Anne to the Obama financial genuisis....DUH.

[ozymandius]

20. Citigroup to sell out of Japan broker Monex: report (need cash)

TOKYO (Reuters) - Citigroup plans to sell its 26 percent stake in Japanese online broker Monex Group Inc as part of the struggling U.S. bank's efforts to raise cash, the Yomiuri newspaper reported on Friday.

Shares in Monex, Japan's second-largest online brokerage in terms of customer accounts, fell 8 percent on the report, cutting the value of Citigroup's stake to 14.1 billion yen ($144 million).

Citigroup, which has received $45 billion of U.S. taxpayer funded capital injections since October, appears to have already sounded out several financial institutions on the Monex stake, the Yomiuri reported.

....

Citigroup is also trying to sell Nikko Cordial, a bricks-and-mortar retail broker with 109 branches across Japan.

http://www.reuters.com/article/newsOne/idUSTRE52510120090306

---

Insolvent much?

[Demeter]

23. this Should Have Been Their First Step

when there was still a market for assets. Now it's a little too late. They won't get many takers. Only the vultures are out now, and not even many of those.

[Tansy_Gold]

51. Hell, they never shoulda bought this stuff

Probably leveraged to the hilt, never been anything but a drain. "Sure, we lose a little bit on every sale but we'll make it up in volume ten years from now!"

Ugh.


I really need to get back to my paying work.



Tansy Gold, admitted SMW addict

[ozymandius]

25. I've never seen a Nasdaq futures chart like the one on my screen right now!

I mean Never. Nearly straight down with velocity from approximately 1085 to 1077 in a blink.

[Demeter]

29. You mean, No breather?

No pump and dump? Time for a bank holiday, don't you think, Mr. President, while the zombie banks are liquidated?

I hate roller coasters. I don't like the ups or the downs.

[ozymandius]

34. There it goes again.

It flatlined, dropped lower, then spiked. It looks like a game of tug-of-war.

[ozymandius]

26. GM's auditors make their doubts about company official

Not just speculative jibber-jabber anymore.

The specter of a General Motors Corp. bankruptcy was raised Thursday by the automaker’s own auditors, which said there was “substantial doubt” about the company’s ability to continue operating.

....

The auditor’s warning, known as a “going concern” judgment, was included by Deloitte & Touche in the company’s annual report, filed Thursday with the Securities and Exchange Commission.

Auditors with doubts about a company’s viability are required to file such opinions; the decision can cause a company to be in violation of loan covenants or result in a debt rating downgrade.

Both can significantly raise the cost of doing business, which has led some financial experts to conclude that going-concern warnings are self-fulfilling prophesies: By issuing them, a company’s costs almost certainly will escalate, further pushing it down the road to insolvency.

http://www.chron.com/disp/story.mpl/headline/biz/6296668.html

[tclambert]

58. How could the auditors not say that?

GM's difficulties have been front-page news for a long time. (OK, in this age of the internet, what is the equivalent of "front-page news?" Does that still make sense to people who never read newspapers?) Everybody knows they are teetering. Congress is looking into pre-packaged bankruptcy as a possibility. GM executives have mentioned Chapter 11. And they are asking for more bailout money.

How foolish would the auditors look if they said, "Everything's fine at GM. No worries here."? About as foolish as all the quackers on CNBC looked in those clips played on The Daily Show with Jon Stewart saying Bear Stearns is fine, Lehman Brothers is fine, AIG is fine, and BoA stock could hit 60 (3.17 yesterday).

What these auditors are saying is, "We are shocked, shocked to learn that GM is in financial difficulty."

[ozymandius]

28. Wolseley to raise $1.4 billion, close U.S. business

LONDON (MarketWatch) -- U.K. building materials group Wolseley said Friday that it will raise around 1 billion pounds ($1.43 billion) from shareholders to reduce its debt levels, as it also revealed a hefty six-month loss and said it wants to exit one of its U.S. businesses.

....

Wolseley said the new cash will help ensure it has adequate headroom with respect to its banking covenants. Raising the money is also one of the conditions on a new 1 billion euro ($1.27 billion) banking facility to be provided in 2011.

Shares in the group dropped 14% in early London trading.

The company said it swung to a net loss in the six months to Jan. 31 of 777 million pounds, from a profit of 65 million pounds a year earlier. The loss was partially driven by an 800 million pound impairment and amortization charge.

http://www.marketwatch.com/news/story/Wolseley-raise-14-billion-after/story.aspx?guid={78CAE3F5-841D-43F9-855A-4E160052B136}

[ozymandius]

35. US unemployment expected to soar

Figures from the Labor Department are predicted to show that employers cut a net total of 650,000 jobs in the month, up from 598,000 in January.

That figure would be the biggest monthly rise in unemployment since October 1949, although the workforce has grown significantly since then.

The jobless rate is expected to rise to 7.9% from 7.6% in January.

A jobless rate of 7.9% would be the highest since the rate of 8% recorded in January 1984.

http://news.bbc.co.uk/2/hi/business/7927790.stm

[ozymandius]

42. This is serious!! People cannot afford Rolls-Royce and Ferrari!

Rolls-Royce, Ferrari Suffer as Slump Reaches New Rich (Update1)

March 5 (Bloomberg) -- Rolls-Royce, Lamborghini and rival luxury carmakers that just five months ago said they’d buck the recession are finding they’re not immune.

The new millionaires of Asia and the Middle East have curbed spending, executives from companies including Rolls and Ferrari said in interviews at the Geneva Motor Show this week, torpedoing a market they’d counted on to spur growth after the banking crisis eroded orders in Europe and the U.S.

“Conventional wisdom has it that premium manufacturers do better in a downturn because people with more money can weather the storm,” said Michael Tyndall, an automotive specialist with Nomura in London. “This time it’s different.”

more...

[Dr.Phool]

47. How much longer is GE going to be around?

From Denninger

http://market-ticker.denninger.net/authors/2-Karl-Denninger

Off the wires, no link.

"DJ reports GE Capital credit default swaps worsen even as GE released a statement emphasizing its strong cash position. The CDS are most recently quoted at 17.5 points up front, from 16.5 points up front earlier today, according to Phoenix Partners Group. That means investors must pay $1.75 mln up front, plus a $500,000 annual fee, to protect $10 mln of GECC senior bonds against default for five years."

That means the first year cost is $1.75 + $500k, or $2.25 million.

That's 22.5% first year cost to insure $10 million against default!

This means that the market is saying that the odds of GE going bankrupt within the next twelve months is greater than one in five, and that assumes zero recovery.

If the bonds would recover more than 80% in the event of a default then it is implying more than a 100% risk of default, which is obviously impossible.

This is occurring despite GE's CFO appearing this morning on CNBC making the case quite clearly that there is no risk of default under any materially possible scenario. In other words, his assertion is that the odds of default are zero.

One of two things must be true:

1.
GE's CFO is lying and must be indicted for doing so.
2.
This so-called "market segment" (CDS) has become so ridiculously overlevered, unsupervised and able to cause failures that it is now within days or even hours of CAUSING GE to fail - not due to GE's own internal problems, but due to positive feedback that the CDS market is capable of and is generating on the initiative and as a consequence of the action of participants in that market.

Either way a major change needs to occur right here and now, lest we find ourselves with no pensions, no Social Security, no Medicare, no annuities and no government.

THIS CAN NO LONGER BE DELAYED OR TOYED AROUND WITH; WHEN "THE BEZZLE" REACHES THE POINT THAT IT STARTS DESTROYING THE NATIONAL CORPORATE INDUSTRIAL GIANTS THAT MAKE UP OUR ESSENTIAL INFRASTRUCTURE, MILITARY AND COMMERCIAL ENTERPRISES THROUGH NO FAULT OF THEIR OWN IT IS A NATIONAL SECURITY EMERGENCY AND MUST BE DEALT WITH IMMEDIATELY.

---------------------------------------------------------------
Wouldn't it be nice if someone like Soros or Buffet could buy their entertainment division? NBC, MSNBC, CNBC. Have a couple of real news organizations. Especially CNBC. They're doing everything they can to destroy any rescue plans that aren't 100% tax cuts for the rich.

Real news....that would be strange.

[ozymandius]

53. GE is in a catch-22 situation.

The capital arm of the company is in deep trouble with anemic returns. They need this arm to raise badly needed capital for the rest of the company. So this item bars them from spinning it off from the rest of GE.

what to do... what to do...

[DemReadingDU]

60. There's something shady going on with GE

It looks like the price is being driven down deliberately and the company can't recover. Then I bet somebody will come in and rescue GE, buy it cheap.


GE - They make lightbulbs, they light my house, they make good things come to life!

[AnneD]

111. So much for the Company that Jack built.....

I guess that is a good thing. Maybe now Maria can put away her knee pads:evilgrin:

I gave up TV for lent (ok I didn't give up the occasional clip on the computer), but it might actually be worth breaking it to see her Wall Street Journal Report this weekend. I think that is why I have been so cranky this week. I don't miss tv snooze, but I miss CSI. It gives me ideas.........

[tclambert]

50. So, anything interesting happen yesterday. I got called in to work.

Not complaining. These days, it's practically boasting.

So, stocks down . . . Holy St. Fiacre, patron saint of venereal diseases, . . .4%? Damn! Glad I missed seeing it. The day before the DJIA was flirting with 7000. Today we may see 6500, maybe even 6300. Wow.

[ozymandius]

54. Republicans are publicly shining Limbaugh's ass with their lips.

Otherwise: -4%

And GE is in trouble. GM is flirting with signing those bankruptcy papers. Millions are unemployed.

That's the latest.

Otherwise, you didn't miss much.

[Tansy_Gold]

56. When I was researching yesterday

I was back in the archives from last June, July, August. It was interesting to read the comments as the Dow started to slip below 12,000.......



I once asked where it really ought to be based on earnings, etc. I think someone said around 3500. Of course, now that the manufacturing base has further eroded and the lifeblood of the currently configured market -- FIRE -- has taken a massive hit, maybe 2000 is more realistic.





TG

[Demeter]

67. Thanks Tansy. I Dedicate Today's Market Performance to You!

You and your Reality-based postings.

[burf]

72. Tansy, here's a little something

I keep on hand to review when one of the talking heads on the television starts with their blather. I don't know if you have seen it, but what the heck, afterall it is Friday. See you all over at the weekend.

http://www.liveleak.com/view?i=b0a_1232747931

Its only about ten minutes so you will need just a small bag of popcorn!

Good day to one and all.

[Demeter]

76. Thanks Burf

always nice to see who swims naked.

[UpInArms]

91. that was so great, thanks burf!

[Karenina]

105. I saw that first clip back in the day

and remember thinking it would be quite the spectacle to see a follow-up 6 months hence. NOW would be even BETTER!

[Tansy_Gold]

108. Yes, I saw it then, too.

The really bitter irony for me is that I saw the housing bubble when it was building (pun intended), and I wasn't alone.

What burns my butt even more now, however, is when assholes like Rick Santelli get in a frothing lather about "bailing out" homeowners who are upside down on their mortgages and/or can't pay them because they've lost their jobs.

His rant made it sound like those of us -- and it includes me -- who worked and slaved and saved and scrimped so we could pay our mortgages and didn't bite off more than we could chew are then going to have to pay so the deadbeats can live in the McMansions free of charge.

Now I'm no different from anyone else: I'd be pissed, too, if I saw the deadbeats being handed fancy houses on a silver platter. But Santelli's mad ravings aren't based on truth.

Many/most of those who are losing or have lost their homes through foreclosure of sub-prime or Alt-A mortgages have done so because they lost their jobs, got hit with fat medical bills, had teaser rates re-set to levels they couldn't afford. Restructuring of their loans isn't going to wipe the mortgages out; it's going to allow them to continue to pay. They'll be able to be more like the "us" so stridently defended by Santelli. They'll be able to work and pay and accumulate capital. (Ugh, almost pains me to say that). They'll also be able to continue putting interest income into the banks and mortgage companies.

What also needs to be looked at in this whole debt restructuring business is how credit card debt is repaid. If a person defaults on a credit car bill, how much has actually been borrowed and how much, including interest, has been paid back? At 19 or 23 or 26% interest, it doesn't take long for the initial debt to have been repaid with just interest compounded on top of it. Throw in a few $39 late fees, and the profit mounts up pretty quick.

We've let the lunatics like Santelli have the last word. Schiff got shut up two years ago, and the truth was silenced.

History repeats itself, first as tragedy. . . . . .



Tansy Gold

[tclambert]

147. Great video clip!

One guy predicted the Dow would hit 16,000 in 2008! When Peter Shiff said financials would sink due to huge losses, they literally laughed at him. Then they recommended investing in Merrill Lynch, WaMu, and Goldman Sachs. Ben Stein said, "You're just wrong, Peter. They're making lots of money."

And was that one guy Arthur Laffer of Laffer curve fame? If so, he is as responsible as anyone for the massive failed experiment known as trickle down economics.

That took some guts on Shiff's part to stand up to their ridicule and state his case. Heroic. I hope it counts for something that he was right and all those others were as wrong as wrong can be.

[UpInArms]

57. dollar watch

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

Last trade 88.293 Change -0.793 (-1.02%)

The Daily Forex is gone - like that page is just ... blank

http://www.dailyfx.com/

this is starting to scare me

Dollar Drops on Concern U.S. Job Losses to Show Deepening Slump

http://www.bloomberg.com/apps/news?pid=20601087&sid=aVseS4hdQlaA&refer=home

March 6 (Bloomberg) -- The dollar fell against the euro and the yen before a government report that may show the U.S. lost the most jobs last month since 1949.

The U.S. currency weakened for a second day against the yen before the Labor Department report, which may show the unemployment rate rose in February to a 25-year high as payrolls fell by 650,000. The euro strengthened on speculation European investors will repatriate profits before the end of the first quarter on March 31. The Swiss franc gained against all 16 of its most-traded counterparts.

“There’s going to be a horrific employment report in the U.S.,” said Lee Hardman, a London-based currency strategist at Bank of Tokyo-Mitsubishi Ltd. “There are signs now in the market that the dollar is becoming more vulnerable.”

The dollar dropped to $1.2683 per euro as of 7:06 a.m. in New York, from $1.2540 yesterday. The decline was the biggest since Feb. 24. The U.S. currency slid to 97.13 yen from 98.07 yen. The euro rose to 123.16 per yen from 123.00, and to 89.07 British pence from 88.82.

The unemployment rate probably surged to 7.9 percent, according to the median estimates in a Bloomberg News survey. The Labor Department is scheduled to release the data at 8:30 a.m. in Washington.

The Dollar Index, which the ICE uses to track the currency’s performance against those of the U.S.’s major trading partners, fell 0.9 percent, the most in two weeks, to 88.245, from 89.105.

The dollar rose 10 percent against the euro this year and 7 percent versus the yen as investors sought a refuge from the global financial turmoil that has caused banks to rack up $1.2 trillion of writedowns and losses since the start of 2007.

‘Artificial’ Rally

“The rally has been in part artificial leading to a divergence between the dollar and the U.S. economic fundamentals,” Lee Hardman, a currency economist in London at Bank of Tokyo-Mitsubishi UFJ Ltd., wrote in a note today. “The sharp sell off in the dollar today on speculation of an exceptionally weak employment report is perhaps an early warning sign that the turning point for the dollar is edging closer.”

...more...

FOREX-Dollar falls sharply on U.S. jobs data jitters

http://www.reuters.com/article/marketsNews/idUSL616353120090306?sp=true

LONDON, March 6 (Reuters) - The dollar fell sharply on Friday as investors feared that key U.S. data would reveal another surge in job losses during February.

Economists expect the U.S. economy lost a massive 648,000 jobs in February, driving the unemployment rate to a 25-year high , but traders said talk that the figure could be as high as 1 million had hit the dollar hard.

Typically, the dollar has tended to gain on bad news recently as investors look to the safety of the world's main reserve currency, but analysts said the knee-jerk reaction to the talk of such a horrendous number was to sell it.

They also said market players were adjusting positions ahead of the data after recent sharp gains that took the dollar index to a three-year high earlier this week

"People were long of dollars all week and now they are paring back those positions, helped by talk of a very bad payrolls number," ING head of currency strategy Chris Turner said.

"But I wouldn't read too much into this move - if the U.S. jobs data really is as bad as 1 million losses then I would expect that to support the dollar," he added.

At 1100 GMT, the dollar index fell 1 percent to 88.176 .DXY, while the euro gained 0.9 percent to $1.2675.

The Swiss franc was also a major gainer, with the euro tumbling to a four-month low against the currency, with analysts saying the Swiss unit has briefly resumed its safe-haven status amid intensifying concerns about a severe global economic downturn.

...more...

[Ghost Dog]

81. FxStreet is up and running...

http://www.fxstreet.com/technical/

Forex: The EUR/USD rise above the 1.2700 level after NFP bad data
FXstreet.com | 13:57 GMT

USD/JPY: Dollar cashes on dreadful U.S. Employment Report; back above 97.00
FXstreet.com | 13:54 GMT

[Ghost Dog]

118. US Dollar At Critical Levels (DailyFx is back)

US Dollar At Critical Levels After US NFPs Fall 651K, Unemployment Rate Hits 25+ Year High

Friday, 06 March 2009 13:59:26 GMT The US dollar pulled back sharply on news that US non-farm payrolls fell in line with expectations by 651,000 in February, but if the data eventually weighs on US equities today, the greenback may ultimately gain on flight-to-quality.

The results actually reflect a surprising, but very slight improvement from the previous two months due to revisions. Indeed, the January results were revised down to -655,000 from -598,000 while the December results were revised down to -681,000 from -524,000, marking the single worst monthly drop since October 1949. Job losses could be seen across the board in the manufacturing, retail, financial, business services, and hospitality sectors, while the only two to show gains were education/health at +26,000 and government at +9,000.

Meanwhile, the US unemployment rate jumped more than anticipated to 8.1 percent - the highest since December 1983 - from 7.6 percent. Perhaps a more important gauge, though, is the augmented unemployment rate, which includes jobless people who aren't counted among the officially unemployed because they haven't searched for work lately, but who would take a job if offered one. This rate rose to 11.3 percent from 10.8 percent.

/... http://www.dailyfx.com/story/bio1/US_Dollar_At_Critical_Levels_1236351625292.html
____

And, this would have been this morning's main report, perhaps, UiA:

US Dollar Sold Heavily in Overnight Trade on Rumor of 1 Million NFP Print (Morning Slices)

Friday, 06 March 2009 10:50:45 GMT There is some talk that the price action overnight has been attributed to a rumor that the Non-farm payroll number could come in at a staggering -1M. This would indeed explain the moves, with the flight to safety buying through the Yen and Swissy (rather than the USD) given the unnerving rumor. Nevertheless, the rally in the Euro has once again stalled out exactly by the 20-Day SMA. The moving average is important because the market has failed to establish a close above it for the entire 2009.

/... http://www.dailyfx.com/story/market_alerts/fundamental_alert/US_Dollar_Sold_Heavily_in_1236340291201.html

Now, if you add to the Feb number, 651,000, what was added as 'revisions' to the Jan and the amazing Dec figures, 57,000 + 157,000, you get a total of 865,000 fewer people on payrolls added to the stats today, unless my mental math's awry. While this is not (yet) a new loss of one million jobs, it sure would have looked more shocking to the 'mass cable-TV audience' than the way the release of the numbers was actually played today.

(pic cut from http://www.talkingpointsmemo.com/ )

____
edit to add, out of curiosity:

[UpInArms]

61. U.S. to invite wealthy to invest in bailout: report

http://news.yahoo.com/s/nm/20090306/bs_nm/us_bailout_invest

WASHINGTON (Reuters) – The U.S. government plans to invite wealthy investors to invest in the bailout of the crippled financial system, The Washington Post reported on Friday.

The investors would be invited to buy up recently issued, highly rated securities that finance consumer lending -- without the risk of massive losses, the report said.

The idea is to entice the investors to put their huge cash piles to work to stimulate the financial system, the Post said.

The program, which could involve the government lending nearly $1 trillion to these investors, exceeds the size of every other federal effort to address the financial crisis so far, the newspaper said.

...more...

blech - then the looters can own our country with our money

[Demeter]

68. Far more likely the Looters Would Buy Up the Companies Themselves

So as to be able to divert the proceeds of all that governmental bonding.

[Tansy_Gold]

80. But haven't they already?

I mean, don't they already own the stock in these companies?

Why do you think no one is screaming bloody murder that the stock prices have tanked? The major owners probably -- I assume, with all the cautions that entails -- that they DON'T CARE because they're in essence getting all that free govt' money.

Peons like us are screaming, well, those of us who still have any stocks/investments, but the big guys? Not so much.



Tansy Gold, who really really really needs to tear herself away from this and get back to work

[Demeter]

84. No, I Don't Think The Vultures Are Ready To Swoop In Yet

They are holding out for better terms from Obama, or expecting he will come to the inevitable conclusion and nationalize. Then, when all the cleanup is done, THEN they will swoop in and buy, cheap cheap cheap!

They don't want fixer-uppers. They want Habitat for Humanity with granite counters. Why work for money, when you can steal it? The vulture doesn't dye his feathers any more than the leopard changes his spots.

Meanwhile, they can stockpile cash from the Treasury handouts, or I should say, "bailouts", in anticipation of a future buying spree. Hence the ongoing bonuses.

[Tansy_Gold]

77. .

.

[Demeter]

79. That Little Animation is Profoundly Disturbing, UIA

[UpInArms]

82. you need something more hopeful?

how's this one?

[UpInArms]

66. U.S. stocks futures tilt higher after February jobs report

http://www.marketwatch.com/news/story/US-stocks-futures-tilt-higher/story.aspx?guid=%7B0E004347%2DB7C3%2D4D7A%2DAE5C%2D47CE3AEC1F9E%7D

NEW YORK (MarketWatch) -- U.S. stock futures erased losses to turn higher early Friday after the government said 651,000 jobs were lost in February and the unemployment rate climbed to 8.1%. Down about 30 points ahead of the data, futures for the Dow Jones Industrial Average (DIA: 66.07, -2.70, -3.9%) gained 13 points to 6,644 in the report's wake. Those for the S&P 500 (SPY: 68.80, -2.93, -4.1%) climbed 6.9 points to 693, while Nasdaq 100 futures (QQQQ: 26.51, -0.82, -3.0%) were up 4.25 points at 1,087.25.

[UpInArms]

71. Former KB Home CEO indicted on fraud charges

http://news.yahoo.com/s/ap/20090306/ap_on_bi_ge/kb_home_backdating

LOS ANGELES – A federal grand jury has charged the former chairman and chief executive of KB Home with multiple counts of fraud and other crimes related to a stock option backdating scheme that authorities say bilked the homebuilder's shareholders out of millions of dollars.

The 20-count indictment returned Thursday charges Bruce E. Karatz with 15 counts of mail, wire and securities fraud, four counts of making false statements in reports filed with the Securities and Exchange Commission, and one count of lying to the company's accountants, according to the U.S. attorney for the Central District of California.

Karatz, 63, faces up to 415 years in prison if convicted on all charges.

"Mr. Karatz allegedly broke the rules, and then lied about it, to line his pockets and then to conceal his windfall from his company and the trading public," said United States Attorney Thomas P. O'Brien.

Karatz, who lives in the Bel Air Estates neighborhood of Los Angeles, agreed in September to pay $7.2 million to settle civil charges of backdating stock options.

Under terms of the settlement, the executive didn't admit or deny the allegations brought by the SEC, which claimed he profited by more than $6 million from exercising many of his stock options.

In response to a call seeking comment, San Francisco-based attorney John Keker, who represents Karatz, issued a collection of published accolades and corporate milestones achieved by his client and a two-sentence statement saying the government is wasting its resources by pressing its case on backdated stock options.

...more...

edited 'cause I doubled posted the $700 trillion dollar derivative article (sorry Ozy!)

[Tansy_Gold]

83. ADD HIM TO THE FRONT PAGE

He's been INDICTED.

I think we should find pictures of these assholes, mock 'em up like mug shots, and make 'em part of the front page. I wanta look at these suckers every time I log into SMW.



Tansy Gold, lusting for blood

[UpInArms]

86. You want a pic?

http://d.yimg.com/img.news.yahoo.com/util/anysize/345,http%3A%2F%2Fd.yimg.com%2Fa%2Fp%2Fap%2F20090305%2Fcapt.28781cfa2f15416e9cc1812eae629e5b.kb_home_backdating_la111.jpg

This 2004 file photo provided by KB Home shows Bruce Karatz. the former CEO and chairman of the board of KB Home. The U.S. attorney's office in Los Angeles said Thursday, March 5, 2009 that Karatz has been named in an indictment charging him with conspiring to defraud the homebuilder and KB Home shareholders through a stock option backdating scheme.

[Demeter]

89. Who Says There's No Good News? Hooray!!

Thanks, IUA! We needed that!

[Loge23]

95. What is it that we make, besides a mess?

It's just so typical of where we find ourselves today.
As Ozy noted, manufacturing is the key - but what can be a better example of manufacturing than home building?
All across the spectrum of business in America, we see this: the core business that any given company is engaged in these days, is secondary to the financial flim-flamming that they are hopelessly entangled in.

Two simple wishes for our recovery from this hopeless Aquarian dreamer and MBA (please don't laugh):
1) Businesses operate for two reasons: a) to make a profit; b) be a positive contributor of the community that they operate in (could be a town, a state, a country, and/or the planet)
2) Businesses concentrate on their core business (car makers make good cars, home-buildings build homes, banks preserve and provide capital). The financial markets should operate as a service, not as an primary activity for profit-making.

Give me some hope today. Are we too far gone?

[radfringe]

106. tattler features a "frog march" section

http://www.progressivesplayground.com/dc/dcboard.php?az=show_topics&forum=106

and a 'wipe your feet' section for following the dirty feet of bush-cheney-NOPers etc...

[UpInArms]

75. Gold rises as U.S. jobless rate rises to 25 year high

http://www.marketwatch.com/news/story/Gold-rises-US-jobless-rate/story.aspx?guid=%7B9DDB026B%2D6731%2D469E%2D8964%2DE799D5286454%7D

NEW YORK (MarketWatch) -- Gold futures rose Friday to above $940 an ounce as investors sought safety in the metal after data showed U.S. February unemployment rate soared to the highest in more than 25 years. Gold for April delivery rose $15.10, or 1.6%, to $942.90 an ounce on the Comex division of the New York Mercantile Exchange. Nonfarm payrolls shrank by 651,000 in February, the Labor Department reported Friday. The unemployment rate soared to 8.1%, the highest level since December 1983.

[UpInArms]

88. 9:31 EST Hurrah! We're Jobless!

Dow 6,658.24 63.80 (0.97%)
Nasdaq 1,309.13 9.54 (0.73%)
S&P 500 687.40 4.85 (0.71%)
10-Yr Bond 2.859% 0.04

NYSE Volume 132,634,875
Nasdaq Volume 37,118,574.219

09:20 am : S&P futures vs fair value: +6.70. Nasdaq futures vs fair value: +6.00. Stock futures are improved from earlier levels, but have pulled back from their morning highs. The overall tone in premarket trading remains rather tepid after stocks closed the prior session at fresh multiyear lows. Heading into this session, stocks are down roughly 7% for the week. Though short-term conditions are looking oversold, buyers appear slow to make a move as they digest the details of the February nonfarm payroll report. Nonfarm payrolls fell 651,000, in-line with expectations, but the unemployment rate climbed more than expected to 8.1%, which is the highest level seen in 25 years. Meanwhile, Wells Fargo (WFC) announced it is cutting its quarterly dividend to $0.05 per share from $0.34 per share. The decision was made in order to preserve capital and repay government funds as quickly as possible. The news is being treated positively as shares of WFC are trading higher in premarket action.

[antigop]

92. Another one? Mansfield man ran Ponzi scheme, SEC suit alleges

http://www.star-telegram.com/business/story/1242250.html

A Mansfield man bilked investors out of $10.9 million by promising big financial returns but instead funneled some of the money into his son’s motor-sports company, a government lawsuit alleges.

The Securities and Exchange Commission sued Ray M. White on Wednesday, accusing him of operating a Ponzi scheme since at least April 2007. His son, Christopher R. White, also of Mansfield, is named in the suit as a "relief defendant" because he "improperly received funds and assets" from the alleged scheme.

Ray White could not be reached for comment. He did not have an attorney listed in federal court records. The phone number for one of his companies was disconnected.

White "misappropriated and misapplied" much of the money, using it to finance his son’s car-racing career, to purchase Hurricane Motorsports and to buy a home and other property, the suit alleges. Hurricane has been seized and is in the possession of a court-appointed receiver.

[antigop]

94. Two threads posted in the Economy Forum last night

1) TPM: more lowdown on AIG

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=114x59387

Maiden Lane I and Maiden Lane II

Using the loophole it had learned during Bear Stearns, the Fed set up two new companies: Maiden Lane II and Maiden Lane III. Two dealt with the secured lending and Three the shitty credit default swaps.

It's not just the credit default swaps-- it's the securities lending system, too.

Hat tip to Bolo Boffin who posted a link to this article, that explains more on Maiden Lane
http://www.lifeandhealthinsurancenews.com/News/2008/12/Pages/Maiden-Lane-III-Buys-CDOs-From-AIG-Counterparties.aspx

(Sorry if this was posted previously--I may have missed it somewhere along the way.)

2)
TPM: AIG Counterparties
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=114&topic_id=59388&mesg_id=59388

[UpInArms]

96. this is why the Federal Reserve refuses to say who got the $2.2 Trillion

it's all a giant ponzi scam

[antigop]

98. and they think they can just keep throwing money at it to keep it going n/t

[Robbien]

113. Josh Marshall has a post up about bankruptcy rules being rigged for derivatives

I'm sure the knowledgeable people already know this. But it turns out that one of the features of the 2005 Bankruptcy bill was to put derivative counter parties at the front of the line ahead of other creditors in bankruptcy proceedings. Actually, from what I can tell, they don't just go to the head of the line. They got to skip the line entirely. As the Financial Times noted last fall, "the 2005 changes made clear that certain derivatives and financial transactions were exempt from provisions in the bankruptcy code that freeze a failed company's assets until a court decides how to apportion them among creditors." As the article notes, ironically, this provision which Wall Street pushed for and got to protect investment banks actually ended up hastening the collapse of Lehman and Bear Stearns last year.

Down in the article there are also the mentions of the entertainingly named "International Swaps and Derivatives Association", one of the lobbies that helped get the change in place.

Along these lines, TPM Reader GG sent in this last night ...

Respectfully, you guys are totally misunderstanding something crucial in the AIG bailout: Derivatives claims are not stayed in bankruptcy. (Yet another brilliant innovation from the 2005 bankruptcy reform legislation.)

If AIG were to go down, derivatives counterparties would be able to seize cash/collateral while other creditors and claimants would have to stand by and wait. Depending on how aggressive the insurance regulators in the hundreds of jurisdictions AIG operates have been, the subsidiaries might or might not have enough cash to stay afloat. If policyholders at AIG and other insurance companies started to cancel/cash in policies, there would definitely not be enough cash to pay them. Insurers would be forced to liquidate portfolios of equities and bonds into a collapsing market.

In other words, I don't think the fear was so much about the counterparties as about the smoking heap of rubble they would leave in their wake.

Additionally, naming AIG's counterparties without knowing/naming those counterparties' counterparties and clients would be at best useless, and very likely dangerous. Let's say Geithner acknowledges that Big French Bank is a significant AIG counterparty. (Likely, but I have no direct knowledge.) BFB then issues a statement confirming this, but stating it was structuring deals for its clients, who bear all the risk on the deals, and who it can't name due to confidentiality clauses. Since everyone knows BFB specialized in setting up derivatives transactions for state-affiliated banks in Central and Eastern Europe, these already wobbly institutions start to face runs. In some cases this leads to actual riots in the streets, especially since the governments there don't have the reserves to help out. If you're Tim Geithner, do you risk it? Or do you grit your teeth and let a bunch of senators call you a scumbag for a few more hours?

http://www.talkingpointsmemo.com/archives/2009/03/im_sure_the_knowledgeable_people.php

[antigop]

117. You mean THIS 2005 bankruptcy reform bill? The one that Biden (and other Dems) voted for?

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=109&session=1&vote=00044

[Robbien]

119. Some on the list of nays is a bit surprising

Schumer! Rockerfeller! Dodd!

Since the bill would pass by a safe margin, I guess they were trying to provide some cover for themselves that they are not firmly in the pockets of the banksters.

[slipslidingaway]

120. The Loophole that Became a Wormhole: Why the Fed Had to Bail out AIG

Original post here...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4068418&mesg_id=4069112


"...Why did the Fed bail out AIG but not Lehman?

http://www.concurringopinions.com/archives/2008/09/the_loophole_th.html

The conventional answer—which is true but incomplete—is that AIG was too big to fail. But that begs two questions: Too big how? And why?

In part, AIG was too big to fail because it could owe an astronomical amount—allegedly about $300 BN—on credit default swaps issued to support mortgage-backed securities.

The problem, however, is not just the amount AIG owes, but the fact that these obligations are not like other obligations. They occupy a series of loopholes that make them unusually dangerous. Perhaps the greatest loophole of all came in the 2005 amendments to the Bankruptcy Code. Although designed ostensibly to “get tough” on profligate debtors, those amendments also made certain that CDS holders would get special treatment in bankruptcy—special treatment that may have made the Fed bailout inevitable..."


Found this about the 2005 bankruptcy bill... though I'm still trying to process the information.

:)

9 page pdf...
http://www.texasbusinesslaw.org/bankreform.pdf


"May, 2005

On April 20, 2005, President Bush signed S. 256, the Bankruptcy Abuse Prevention and
Consumer Protection Act of 2005 (the "Act"), enacting the most significant changes to the
United States bankruptcy laws in over a quarter of a century. While the majority of the changes
to the bankruptcy laws are aimed at the prevention of consumer bankruptcy abuse, a significant
portion of the Act amends commercial provisions to title 11, United States Code (the
"Bankruptcy Code" or the "Code"). These commercial amendments will have an impact on
many companies, including debtors and those that deal with Chapter 11 debtors in commercial
relationships. This summary identifies and summarizes the most significant changes..."

[Festivito]

99. Debt: 03/04/2009 10,944,337,682,981.48 (UP 498,753,546.56) (Teeny tiny.)

(Under Obama, I think they borrow big occasionally and do little the rest of the days.)

= Held by the Public + Intragovernmental(FICA)
= 6,654,449,660,910.95 + 4,289,888,022,070.53
UP 625,214,862.41 + DOWN 126,461,315.85

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: $9.81, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,912,315 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,776.06.
A family of three owes $107,328.18. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 28 days.
The average for the last 20 reports is 13,757,268,720.95.
The average for the last 30 days would be 9,171,512,480.63.
The average for the last 28 days would be 9,826,620,514.96.
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$/day.
There were 30 reports in 43 days of Obama's part of FY2009 averaging 0.73B$ per report, 0.55B$/day so far.
There were 105 reports in 155 days of FY2009 averaging 8.76B$ per report, 5.93B$/day.

PROJECTION:
There are 1,418 days remaining in this Obama 1st term.
By that time the debt could be between 12.9 and 24.9T$.
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)
03/04/2009 10,944,337,682,981.48 BHO (UP 317,460,634,068.40 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: 919,612,786,069.00 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/11/2009 -000,221,760,520.78 ---
02/12/2009 +043,810,585,841.25 ------------**********
02/13/2009 -000,268,428,512.00 ---
02/17/2009 +028,425,868,676.29 ------------********** Tue
02/18/2009 +000,178,127,394.43 ------------********
02/19/2009 +012,906,622,783.22 ------------**********
02/20/2009 +035,338,367,983.16 ------------**********
02/23/2009 -000,426,861,213.78 --- Mon
02/24/2009 +000,473,801,933.93 ------------********
02/25/2009 +000,413,635,509.27 ------------********
02/26/2009 +048,048,940,708.92 ------------**********
02/27/2009 +000,306,718,307.89 ------------********
03/02/2009 +074,163,317,993.12 ------------********** Mon
03/03/2009 +000,498,419,440.82 ------------********
03/04/2009 +000,625,214,862.41 ------------********

244,272,571,188.15 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,279,705,879,722.41 in last 167 days.
That's 1,280B$ in 167 days.
More than any year ever, including last year, and it's 126% of that highest year ever only in 167 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 167 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=3768332&mesg_id=3768349

[Festivito]

160. Debt: 03/05/2009 10,953,034,411,520.15 (UP 8,696,728,538.67) (Moderate.)

(A moderate rise.)

= Held by the Public + Intragovernmental(FICA)
= 6,661,392,934,515.56 + 4,291,641,477,004.59
UP 6,943,273,604.61 + UP 1,753,454,934.06

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: $9.81, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 305,918,486 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,803.77.
A family of three owes $107,411.3. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 28 days.
The average for the last 20 reports is 11,751,814,411.62.
The average for the last 30 days would be 7,834,542,941.08.
The average for the last 28 days would be 8,394,153,151.16.
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$/day.
There were 31 reports in 44 days of Obama's part of FY2009 averaging 0.73B$ per report, 0.57B$/day so far.
There were 106 reports in 156 days of FY2009 averaging 8.76B$ per report, 5.95B$/day.

PROJECTION:
There are 1,417 days remaining in this Obama 1st term.
By that time the debt could be between 12.9 and 22.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/05/2009 10,953,034,411,520.15 BHO (UP 326,157,362,607.07 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: 928,309,514,607.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
02/12/2009 +043,810,585,841.25 ------------**********
02/13/2009 -000,268,428,512.00 ---
02/17/2009 +028,425,868,676.29 ------------********** Tue
02/18/2009 +000,178,127,394.43 ------------********
02/19/2009 +012,906,622,783.22 ------------**********
02/20/2009 +035,338,367,983.16 ------------**********
02/23/2009 -000,426,861,213.78 --- Mon
02/24/2009 +000,473,801,933.93 ------------********
02/25/2009 +000,413,635,509.27 ------------********
02/26/2009 +048,048,940,708.92 ------------**********
02/27/2009 +000,306,718,307.89 ------------********
03/02/2009 +074,163,317,993.12 ------------********** Mon
03/03/2009 +000,498,419,440.82 ------------********
03/04/2009 +000,625,214,862.41 ------------********
03/05/2009 +006,943,273,604.61 ------------*********

251,437,605,313.54 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,288,402,608,261.08 in last 168 days.
That's 1,288B$ in 168 days.
More than any year ever, including last year, and it's 127% of that highest year ever only in 168 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 168 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=3770200&mesg_id=3770556

[UpInArms]

102. Volcker chides Merrill execs for bonuses in crisis

http://www.reuters.com/article/bondsNews/idUSN0639282420090306

NEW YORK, March 6 (Reuters) - Top U.S. presidential adviser Paul Volcker came down hard on Friday on Merrill Lynch executives for taking huge bonuses at a time when their firm was running into irreparable financial trouble.

Volcker, a former Federal Reserve chairman, chuckled as he recounted one top Merrill officer's justification for his own very large lump sum payment.

"The guy that got the biggest bonus said he deserved it because he played a big role in orchestrating the merger of Royal Bank of Scotland and ABN Amro," he said. "Turns out they were both bankrupt.

"What are the incentives? They walked away with $30 million," he said of Merrill's corporate chieftains.

Many analysts blame perverse incentives in compensation for the excess risk-taking that has pushed financial markets into their worst crisis in generations.

...only a bit more...

[UpInArms]

104. GM shares touch on new 75-year low

http://www.marketwatch.com/news/story/gm-shares-trade-lowest-level/story.aspx?guid=%7BDCD56D8B%2D5DF7%2D4070%2D9753%2D202D268929B5%7D&siteid=bnbh

SAN FRANCISCO (MarketWatch) -- General Motors Corp. (GM: 1.28, -0.58, -31.2%) shares dropped more than 21% to $1.44 in early trades Friday, touching a new 75-year low after the automaker and its auditor a day earlier raised fears of bankruptcy as car sales continue to plunge. The last time the troubled Dow component traded at these levels was back in 1933. President Obama's automotive task force will hold a closed-door meeting Friday afternoon to discuss the restructuring plans from GM and Chrysler.

[Robbien]

115. Osborne Pledges Changes to U.K. Tax System to Discourage Debt

March 6 (Bloomberg) -- Britain’s Conservative opposition said its “first priority” will be to change the corporate tax system to remove incentives for companies that borrow, encouraging them to seek equity capital instead.

“We need to change from an economy built on debt to an economy powered by savings and real returns on effort,” George Osborne, the Conservative lawmaker who speaks on finance, told executives today in Birmingham, England, according to a text from his office. “Increasing profits through ever higher debts is not a sustainable way to build a business.”

. . .

He said “highly leveraged” private equity had squeezed out “real venture capital,” something he wants to reverse.

http://www.bloomberg.com/apps/news?pid=20601102&sid=a71v6rUUlrM0&refer=uk

[UpInArms]

116. 12:50 EST and all's red again

Dow 6,522.52 71.92 (1.09%)
Nasdaq 1,277.24 22.35 (1.72%)
S&P 500 672.98 9.57 (1.40%)
10-Yr Bond 2.835% 0.016

NYSE Volume 4,161,042,750
Nasdaq Volume 1,180,021,000

12:30 pm : Dow Chemical (DOW 7.63, +1.16) and Rohm & Haas Company (ROH 61.15, +7.14) confirmed today that they are in discussions relating to the merger of their companies and the pending litigation. At this time, the companies cannot predict the outcome of these discussions. However, many analysts expect a lower price offer to result. Dow originally offered to pay $78 per share of ROH.

Meanwhile, Roche confirms it has increased its offer price for all outstanding publicly-held shares of Genentech (DNA 89.99, +8.35) to $93.00 per share and extended the offer to 12:00 AM ET March 20, 2009.

All other terms and conditions of the tender offer remain unchanged. DJ30 -35.68 NASDAQ -16.28 SP500 -4.75 NASDAQ Dec/Adv/Vol 1387/1143/1.11 ln NYSE Dec/Adv/Vol 1955/1035/687 mln

12:05 pm : Stocks are chopping along in negative territory as participants approach the midsession mark. Overall news flow has been slow.

Still, Marvell Tech (MRVL 8.12, +0.60) posted better-than-expected earnings following the prior session's close. The company also issued upside guidance during its conference call.

With tax season nigh, business for H&R Block (HRB 18.88, +1.56) is making its seasonal upswing. The company reported this morning better-than-expected earnings for its latest quarter. Given the seasonality of its business, H&R Block posted losses in the two prior quarters.DJ30 -6.85 NASDAQ -14.65 SP500 -2.47 NASDAQ Dec/Adv/Vol 1374/1136/1.00 bln NYSE Dec/Adv/Vol 1873/1099/621 mln

11:30 am : Stocks have fallen below the prior session's lows, thereby registering new multiyear intraday lows.

New York Fed President Dudley stated that there is no imminent recovery for markets, and the economy has considerable downside momemtum, according to Dow Jones.

Dudley announced that a Public-Private Investment Fund (PPIF), which will be underpinned by TARP capital and private capital, will be used to purchase illiquid, legacy assets. Still, the terms and conditions of the PPIF have not been announced, but the facility should help put a floor under prices of lower-quality assets and provide a means for banks to shed such assets from their balance sheets. DJ30 -24.77 NASDAQ -20.27 SP500 -4.55 NASDAQ Dec/Adv/Vol 1446/1034/849 mln NYSE Dec/Adv/Vol 1984/984/534 mln

[Roland99]

123. CNBC - most on-air "personalities" still blaming Obama for recent 20% drop

It's been a carnival show today.

A couple of on-air reporters/guests were dressing down the regulars saying that blaming Obama for a failing economy is just nonsense. But, they'll keep up their harping until kingdom come.

FUCK THEM!

Fuck them and their crying in the beer over a measly 5% add'l taxes on capital gains.

FUCK THEM!

Fuck them and the nearly 30 years of "Reaganomics" (supply-side economics) that has turned capitalism in America into an all-for-themselves greed-fest.

FUCK THEM!

[Dr.Phool]

126. Damn! that Obama is good! Destroyed Western Civilization in 6 weeks.

I hope Santelli, Luddite, Cramer, et al, have all their money invested in their parent company's(GE) stock. Let 'em lose it all, the snivelin' bitches, so they don't have to pay any goddamned capital gains.

FUCK THEM!!!!

[harun]

134. I had CNBC disabled on my Sat Dish. I thought I would re-enable yesterday

to check it out. It was the "Obama drop", "Obama proof stocks", "Obama proof industries", "Obama recession", "Obama depression", etc.

Absolutely sickening.

[Dr.Phool]

137. And GE wants Obama to bail them out.

They really know how to butter up the loan officer, don't they?

But, they're probably right. They qualify for a sub-prime bailout, and will probably wind up with more than they need, just to pay these yammering, squawking heads a bonus.

[Ghost Dog]

124. Europe stocks hit 12-yr lows as US jobs data weighs

Fri Mar 6, 2009 12:38pm EST LONDON, March 6 (Reuters) - European shares ended lower after a volatile session on Friday as U.S. unemployment at a 25-year high underlined economic worries and investors dumped financial stocks.

The FTSEurofirst 300 .FTEU3 index of top European shares ended 1.3 percent lower at 662.13 points, having fluctuated between a gain of 0.9 percent and a fall of 1.5 percent to a fresh 12-year, or lifetime, low.

Banks and insurers were the worst losers, with Societe Generale (SOGN.PA), BNP Paribas (BNPP.PA), AXA (AXAF.PA), ING (ING.AS) and HSBC (HSBA.L) falling 4.4-6.6 percent.

...

"The newsflow coming out of the U.S. is universally negative at the moment and consensus GDP estimates will continue to be revised down," said Darren Winder, equity strategist at Cazenove.

...

The FTSEurofirst 300 lost around 8 percent during the week.

MINERS, OILS LIMIT INDEX LOSSES

Commodity stocks were the best performers, with Royal Dutch Shell (RDSa.AS), BHP Billiton (BLT.L), Rio Tinto (RIO.L) and Total (TOTF.PA) adding 1.2-5.3 percent, as copper futures <MCU3=LX> gained nearly 3 percent and crude CLc1 rose 85 cents a barrel to just shy of $44.50.

Mining stocks are among the better performers so far this year, with the DJ STOXX European basic resources index .SXPP losing 9 percent compared with losses of 40 percent for insurers and 36 percent for banks.

...

OECD data showed the outlook for the world's key industrialised and emerging economies weakened further in January and European Commission President Jose Manuel Barroso said the EU was facing an unprecedented situation due to the economic crisis.

"The feel now is that policy makers are starting to realise that buying their way out of recession is not the answer and it is time to really buckle down as Obama's recession deepens," said Andrew Turnbull, senior sales manager at ODL Securities.

/... http://www.reuters.com/article/marketsNews/idCAL632283720090306?rpc=44&sp=true

Don't you just love the spin, doctor? (Reuters server very slow just now).

[Renew Deal]

125. What's with the gold chart?

:wtf:

[Dr.Phool]

127. Replaying the landing scene in "Airplane!"

They're up. They're down. They're up. They're down.

[specimenfred1984]

128. How about this chart?

http://finance.yahoo.com/q/bc?s=GOE&t=1y

[Renew Deal]

129. 33.00 +58.93%

What the hell is that?

[Ghost Dog]

139. It's an oddity.

http://www.darwinsfinance.com/gold-etn-goe-up-421-in-1-month-what-gives/

[Robbien]

130. Now Hiring: TARP ‘Cops’ Looking For a Few Good Lawyers

There is going to be fraud, lots of it.


Amid all the hemorrhaging of jobs in the legal sector, we bring you a sliver of good news. According to the Journal’s Amir Efrati, reporting from the ABA’s white-collar conference in San Francisco, two high-profile prosecutors are looking for new blood and told white-collar defense lawyers they should expect to see more business soon.

There Will Be (TARP) Fraud: On Thursday, Neil Barofsky, the new special inspector general for the Troubled Asset Relief Program, aka the TARP Cop, practically guaranteed the white-collar bar lots of work in the coming months as the government finishes unloading nearly $3 trillion dollars to the private sector. (Click here for a WSJ story on Barofsky in Friday’s Journal; here for a LB post on his appointment.)

Barofsky, looking straight-up dashing in the attached picture, said up to 10%, or $300 billion, of the total could be vulnerable to fraud by banks, hedge funds, mortgage servicers and others that take funds. The fraud could take several forms, he said, from companies misrepresenting their condition to the Treasury Department in order to get funds or, once they have the money, using it improperly. “Is it good for business? I think it is,” he told a group of several hundred white-collar lawyers. “Fraud is going to hit and we’ll be all over it,” he said.

His office currently has 25 employees but Barofsky said he expects it to grow to between 100 and 125.

http://blogs.wsj.com/law/2009/03/06/now-hiring-tarp-fcpa-cops-looking-for-a-few-good-lawyers/

[Dr.Phool]

131. ArcelorMittal Cleveland closing mill and finishing plant; 990 steelworkers losing jobs

ArcelorMittal Cleveland closing mill and finishing plant; 990 steelworkers losing jobs
Posted by Frank Bentayou/Plain Dealer Reporter March 06, 2009 09:38AM

Updated at 2:10 p.m.

CLEVELAND -- ArcelorMittal Cleveland said Friday that it will halt operations at its mill and finishing plant in the Flats in early May, suspending jobs for about 950 steelworkers and leaving the fates of about 200 salaried employees uncertain.

The plant, which employed more than 1,400 members United Steelworkers of America Local 979 as recently as last summer, will have around 250 employees providing basic fire watch and maintaining the water treatment, boiler and environmental systems, according to a written statement from the facility's spokeswoman.

Local 979 President Mark Granakis said he had expected the company to cut workers further this month or next, "but I never thought there was going to be this severe a reduction. I realize the economy's hurting. I don't think they're laying people off because they want to, but it is hard."

It was unclear Friday how long it might be before the plant begins producing steel again.

Worldwide orders for the flat-rolled steel products the plant makes dried up suddenly last fall. Luxembourg-based ArcelorMittal, is the world's largest steel maker, shut down the two blast furnaces the plant uses to make steel. Only rolled-steel galvanizing and finishing lines continued operating, though only a fraction of their capacity.

By December, the Cleveland plant had laid off 450 union workers and said in late February that it would reassign a third of its 300 salaried workers to other company installations. The company at the time declined to answer questions about what would happen to the remaining 200 salaried employees.

In interviews last month, plant managers as well as union officials said more members of USW Local 979 would get layoff notices in the coming weeks.

"There's not much else they can do," said Granakis said at the time. "We have practically no orders now. We think, we hope, they'll pick up by the end of the year and everybody will be back at work."

http://blog.cleveland.com/business/2009/03/arcelormittal_cleveland_closes.html

Good-bye Cleveland.

I retired out of the railroad down there. Still have friends there.

[UpInArms]

132. Hoenig: 'Too big to fail' has failed

04. Hoenig: Failed banks need overhaul no matter how big
1:00 PM ET, Mar 06, 2009

05. Hoenig: 'Too big to fail' has failed
1:00 PM ET, Mar 06, 2009

06. Hoenig: Big banks have always been alllowed to fail
1:00 PM ET, Mar 06, 2009

07. Hoenig: Govt. 'drifting' on bad banks with no end in sight
1:00 PM ET, Mar 06, 2009

08. KC Fed's Hoenig slams govt. approach to big banks
1:00 PM ET, Mar 06, 2009

[specimenfred1984]

135. Darn it, I thought investing in fraud, charging late fees, inventing fees...

lying to what few regulators there are, lying to Congress, investing in ponzi schemes, outsourcing help lines and raising interest rates to impossible levels was a good business model. LMFAO

[uppityperson]

136. Is there a "how low will it go" pool?

I'll pick "too low".

[Tansy_Gold]

138. Put me in for....

000.000





Tansy Gold, not a betting woman

[ozone_man]

141. They'll probably close it before it gets that low.

Bearing in mind that the low may be several years away, I'll say 5,000 by the end of this year, 3,000 by the end of 2010, and 1,500 by the end of 2011. When it gets to zero, buy it all!

[antigop]

140. TPM has update--response to Robbien's post #113

http://www.talkingpointsmemo.com/archives/2009/03/another_view_1.php

Someone else weighs in...

I beg to differ with GG on two points. First, the subsidiaries of AIG are insurance companies that are by law required to have enough reserves to manage situations like this, thanks to the remnants of Glass Steagall of course. Now, I am not an expert on insurance biz but this claim by GG seems doubtful to me. Second, I have traded derivatives myself and know this much that the market professionals (not the amateurs who think they have info) already have enough info on what AIG owes to whom and they are benefiting immensely by this weired Geithner process. They are getting out calmly and coolly while the rest will be left holding the bag. So, GG's contention that if Geithner releases the names it will have this domino effect doesn't pass the smell test on any count. People who trade derivatives tend to be people who are in the KNOW and by definition know what is owed to whom. Geithner releasing this info won't have any effect because this is already known to the "market" just not to the ordinary citizen who by definition again DOES NOT KNOW and DOES NOT TRADE these instruments. If you don't believe me then ask Prof. Krugman. My claim is that this is just all a hoax to let the wall street buddies get out while the going is good and then let these institutions fail. Outcome will be the same whether the info is released now or later..."controlled-depression."

[Dr.Phool]

142. Ooooh, faeries showed up for work today.

[Demeter]

152. Not Only That, They Came Back After a Late Lunch

[TheWatcher]

143. LOL! Freaky Friday! Yet ANOTHER Official Sector Stick Save Rally in the last half hour.

And this time, they did it with no formal announcement, no BS Cover Story, No Propaganda Placement.

Just Because.

Now all the Sheep can watch The Bachelor for the rest of the weekend and be happy! We're SAVED!

I'm sorry, I don't even think the STAUNCHEST of the Kool-Aid Drinkers is going to buy this nonsense.

Unemployment at 8.1% (Highest Since REAGAN'S first term), and the Economy in "Free-Fall."

And that was with OBVIOUSLY Massaged numbers, and a hilarious downward revision for December. (Please don't tell me anyone bought that)

This is just CHILDISH.

You CAN'T make it this obvious.

Keep doing things this blatant, and even the "True Believers" are going to start catching on.

:puke:

[specimenfred1984]

144. I thought the DOWards would drive it up today

The manipulators didn't want to go into the weekend with another bad day on their propagandizing hands regardless of how bad the "news" was to begin the day which oddly enough (sarcasm) the market temporarily rallied on.

[tclambert]

149. Are you not entertained?

And people think the stock market is boring. What a day.

[UpInArms]

153. end o' the week stuff

ow 6,626.94 32.50 (0.49%)
5.74 (0.44%)
S&P 500 683.38 0.83 (0.12%)
10-Yr Bond 2.828% 0.009

NYSE Volume 8,516,744,000
Nasdaq Volume 2,508,806,750

4:30 pm : The broader market turned in a modest gain, thanks to a late rally effort that overcame steep losses.

Initial gains were broad-based as participants began buying in the wake of the February jobs report, which indicated nonfarm payrolls fell 651,000, in-line with expectations, and unemployment climbed more than expected to a 25-year high of 8.1%. Stocks were up as much as 2.4% in what resembled past trends that saw stocks sell off leading up to the monthly jobs report, but then rally in its wake as traders "bought the bad news."

The advance crumbled, though, as sellers re-entered the fold to push financial stocks into the red. Financials were up 4.0% before falling to a 5.3% loss.

Wells Fargo (WFC 8.66, +0.54) was one of the few financial players to log a gain. The company announced it will cut its quarterly dividend to $0.05 per share from $0.34 per share in order to preserve capital and repay government funds as quickly as possible.

Financials closed with a 1.4% lower.

Weakness in financials undercut the broader market, taking the S&P 500 and the Dow past prior session lows to their worst intraday levels since 1996. The S&P 500 was down as much as 2.3%, while the Dow was down as much as 1.9%.

The Nasdaq fell to its lowest level in six years as large-cap tech stocks buckled. Large-cap tech had actually provided support to the Nasdaq in recent sessions, but the market's downward trend proved too much. The Nasdaq traded with a loss of 2.4% at its session low.

Marvell Tech (MRVL 8.06, +0.54) was one standout in the Nasdaq, though. The company posted better-than-expected earnings and issued upside guidance.

A late rally effort helped stocks finish off their lows. The effort stalled a bit as sellers redoubled their efforts, but the broader market was able to overcome.

Though the Nasdaq finished lower for the 13th time in 15 sessions, the Dow and S&P 500 were each able to close modestly higher. The Dow has finished four of the last 15 sessions higher. The S&P 500 has finished three of the last 15 sessions higher.

The broader market is now down 57% from its 2007 high. At its high, the S&P 500 traded at a price-to-trailing earnings ratio of 17.4. The stock market currently trades at 10.2x trailing earnings.DJ30 +32.50 NASDAQ -5.74 NQ100 -0.9% R2K +0.5% SP400 -0.7% SP500 +0.83 NASDAQ Adv/Vol/Dec 1318/2.15 bln/1377 NYSE Adv/Vol/Dec 1138/1.77 bln/1923

3:30 pm : Crude oil contracts for April delivery priced crude at $45.73 per barrel at the close of pit trading. Crude closed near its session high with a 4.9% gain.

April natural gas contracts finished at $3.98 each, down 2.8%. Natural gas prices traded with weakness for virtually the entire session, registering multiyear lows at $3.92 per contract. Natural gas contracts had not traded at such low levels since late 2002.

Precious metals showed steady strength throughout the session. Gold contracts for April closed with the yellow metal priced 1.6% higher at $942.70 per ounce. Silver contracts for May delivery closed the session with the metal priced 1.6% higher at $13.33 per ounce. DJ30 -109.04 NASDAQ -28.78 SP500 -14.43 NASDAQ Adv/Vol/Dec 910/1.98 bln/1754 NYSE Adv/Vol/Dec 564/1.25 bln/2515

[ozymandius]

154. Thanks UpInArms!

We've had family in town from L.A. since Wednesday. So I appreciate you and others putting the cap on the day's bidness. :hi:

Have a good evening!

[UpInArms]

155. Hey Ozy!

It's been a wild ride this week - on the board and in the house

Gib's b-day is Tuesday, perhaps the world will make more sense then

:grouphug:

[ozymandius]

156. That's wonderful.

Hugs all around! :grouphug:

[cosmicdot]

157. kick

no Friday night bank closings this week??

[UpInArms]

158. link here

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3771616

[cosmicdot]

159. thank-you

I just saw your thread, and had come back here to answer my own question.

:D