STOCK MARKET WATCH, Tuesday March 17

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday March 17, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials Under Indictment = 0
Financial Sector Officials In Prison = 2

AT THE CLOSING BELL ON March 16, 2009

Dow... 7,216.97 -7.01 (-0.10%)
Nasdaq... 1,404.02 -27.48 (-1.92%)
S&P 500... 753.89 -2.66 (-0.35%)
Gold future... 922.00 -8.10 (-0.88%)
30-Year Bond 3.77% +0.09 (+2.53%)
10-Yr Bond... 2.95% +0.07 (+2.29%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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Read more: du

[ozymandius]

1. Market WrapUp

A Golden Lining in a Perfect Storm
Will we ever learn the lessons of history?
BY TONY ALLISON

“Nations are not ruined by one act of violence, but quite often gradually, almost imperceptibly, by the depreciation of their currency, through excessive quantity.”

Nicolaus Copernicus - (1473-1543)
mathematician/astronomer/economist

With the world in a tumult and the global financial system on the brink, there has been one relatively steady beacon in the storm: gold. The gold price ended up 5.5% for 2008 as stock markets plunged around the world and is currently up over 4% in 2009. The S&P 500 finished down 38.5% last year and is currently down 16.5% in 2009. As a safe haven, gold set all-time highs last fall in the Euro, British Sterling, the Australian dollar, the Indian Rupee and the Russian Ruble, among others. The US dollar has also been a safe haven asset, but the longer-term fundamentals of the dollar are no match for gold.

.....

Save us from ourselves

It’s clear that prolonged periods of excessive money creation lead to excessive speculation, debt and finally economic turmoil. It has occurred throughout the ages and is occurring today. Without the disciplining system of a gold standard, it falls on central banks to control money supply. History has shown central banks as independent in name only. They are de facto pawns of government and create whatever amount of currency that government demands.

Unfortunately, the US has squandered its hard-earned status as a creditor nation. We are now the world’s largest debtor nation. Our policies are now, and will continue to be, heavily influenced by our largest creditors, particularly China. None of this would have been possible under a gold standard. The US would have been forced early on to stop deficit-spending and financing wars “off-budget.” Our gold would have all been drained away by our creditors and regular citizens had we continued, which would not have been politically feasible. Politicians would have had the political cover to make the tough choices to stop spending. It would have been “out of their hands,” and thus an easy decision.

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

[Odin2005]

47. We are having deflation and the Libertarian nutjobs are still predicting hyperinflation?

Bunch of idiots. that site is Libertarian BS, not legitimate economics. Sad that many here have fallen for nutty libertarian conspiracy theories involving the Fed.

[Dr.Phool]

52. Nobody has fallen for anything.

It's just a post that goes up every day. They have a couple of decent writers, and a few nut jobs. Like today's gold bug.

[ozymandius]

2. Today's Reports

08:30 Building Permits Feb
Briefing.com 500K
Consensus 500K
Prior 531K

08:30 Housing Starts Feb
Briefing.com 445K
Consensus 450K
Prior 466K

08:30 PPI Feb
Briefing.com 0.3%
Consensus 0.4%
Prior 0.8%

08:30 Core PPI Feb
Briefing.com 0.0%
Consensus 0.1%
Prior 0.4%

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

[Roland99]

43. PPI Feb. +0.1%; Core PPI +0.2%; Housing Starts 583,000 units (Jan revised to 477,000)

Feb year-over-year PPI -1.3%
Core year-over-year +4.0%

[UpInArms]

44. 8:30 reports:

01. U.S. Feb. housing starts jump 22% to 583,000 annual rate
8:30 AM ET, Mar 17, 2009

02. U.S. Feb. building permits rise 3% to 547,000 annual rate
8:30 AM ET, Mar 17, 2009

03. U.S. Feb. single-family permits rise 11% to 373,000
8:30 AM ET, Mar 17, 2009

04. U.S. Feb. PPI up 0.1% vs. 0.4% expected
8:30 AM ET, Mar 17, 2009

05. U.S. Feb. core PPI up 0.2% vs. 0.1% expected
8:30 AM ET, Mar 17, 2009

06. U.S. PPI down 1.3% in past 12 months
8:30 AM ET, Mar 17, 2009

07. U.S. core PPI up 4.0% in past 12 months
8:30 AM ET, Mar 17, 2009

08. U.S. Feb. PPI energy prices up 1.3%
8:30 AM ET, Mar 17, 2009

09. U.S. Feb. PPI food prices down 1.6%
8:30 AM ET, Mar 17, 2009

[ozymandius]

3. Oil dips in Asia amid concerns over global economy

KUALA LUMPUR, Malaysia – Oil prices dipped in Asia on Tuesday as traders weighed OPEC's decision to maintain production levels amid persistent concerns over the global financial crisis.

Benchmark crude for April delivery eased 55 cents to $46.80 a barrel by midmorning in Singapore on the New York Mercantile Exchange. Prices fell as low as $43.62 a barrel Monday but rebounded to close up $1.10 at $47.35.

....

Some analysts said some OPEC producers are beginning to realize that to get long-term demand growth, they have to stimulate the economy with lower prices as opposed to trying to slow it down by raising prices.

....

In other Nymex trading, gasoline for April delivery fell 1 cent to $1.3572 a gallon, while heating oil dropped 1.9 cents to $1.1933 a gallon. Natural gas for April delivery was up 1.4 cents to $3.864 per 1,000 cubic feet.

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

[ozymandius]

4. Most Asian markets extend rally, but Europe falls

HONG KONG – Most Asian stock markets extended their rally Tuesday, with Tokyo's index up more than 3 percent, as investors snapped up banking shares amid easing fears about the world's hard-hit financial system.

But market watchers were skeptical the turnaround would last, and European shares opened lower after robust gains the day before.

....

In Tokyo, the Nikkei 225 stock average jumped 244.98 points, or 3.2 percent, to 7,949.13, on hopes that the Japanese government will take further steps to reinvigorate the Japanese economy, mired in one of its worst slumps since World War II.

....

South Korea's Kospi surged 3.4 percent to 1,156.78, but Hong Kong's Hang Seng index erased afternoon gains to end down 98.62 points, or 0.8 percent, to 12,878.09.

Markets in Australia, China, and Taiwan also rose, while shares in India and Singapore declined.

As Europe opened, Britain's FTSE 100 dipped 0.8 percent to 3,833.85, while Germany's DAX declined 0.9 percent to 4,010, while Frances' CAC 40 dropped 1.4 percent to 2,753.41.

http://news.yahoo.com/s/ap/20090317/ap_on_bi_ge/world_markets

[ozymandius]

5. Housing starts seen at record lows in February

WASHINGTON (Reuters) – The pace of U.S. housing starts probably slipped to yet another record low in February, after plunging nearly 40 percent during the past three months, according to a Reuters poll.

February housing starts are expected to slow to a seasonally adjusted annual rate of 450,000 units, based on a median forecast of 70 analysts. That would be a drop from January's rate of 466,000, which was the lowest since the Commerce Department began keeping records in 1959.

"We've gotten to a point where there's almost no speculative building anyway," said Chris Low, chief economist for FTN Financial, in New York.

http://news.yahoo.com/s/nm/20090317/us_nm/us_usa_economy_housingstarts

[ozymandius]

6. Bernanke May Need to Ramp Up Fed’s Asset Purchases (Update1)

March 17 (Bloomberg) -- Chairman Ben S. Bernanke and Federal Reserve policy makers may have to ramp up their purchases of mortgage securities and other assets after the economy and job market deteriorated further since they last met.

The Federal Open Market Committee, gathering today and tomorrow in Washington, needs to redouble its efforts after the central bank’s balance sheet shrank 17 percent from a $2.3 trillion December peak, Fed watchers said. The retreat came even as Bernanke acknowledged the chance that the unemployment rate will exceed 10 percent for the first time in a quarter century.

.....

This week’s FOMC meeting could mark a shift toward more aggressive monetary expansion to fight deflation after demand waned for many of the Fed’s existing programs. One top consideration is an increase in the pace and size of a $600 billion program to buy bonds issued and backed by U.S. housing agencies such as Fannie Mae, analysts said.

Other measures could include everything from purchases of Treasuries to corporate bonds, Tilton said. The Fed has already agreed to work with the Treasury on implementing a program to revive consumer and business loans, which the Obama administration has said could reach $1 trillion.

http://www.bloomberg.com/apps/news?pid=20601068&sid=awRVFcG2XDew&refer=home

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The capital needed for this venture will merely be printed into existence.

[ozymandius]

7. Auto parts makers show they're suffering, too

While Steven Rattner, lead adviser to President Barack Obama's automotive task force, acknowledged Monday that auto suppliers are in urgent need of aid, the industry's parts companies showed more signs of distress.

....

The supplier industry has requested up to $25.5 billion in aid, primarily guarantees on loans and receivables, as well as direct cash injections to automakers so they can pay their suppliers in 10 days instead of the more typical 45 days.

Without aid, industry experts have warned of a wave of bankruptcies by the end of the month.

http://www.freep.com/article/20090317/BUSINESS01/903170393/1210/BUSINESS/Auto+parts+makers+show+they+re+suffering++too

[Demeter]

9. It's Scandalous, How GM Treated Its Suppliers

If they wanted Just in Time service, they should have provided cash on delivery. It's just plain immoral. I'm beginning to think the government could run the place better.

[Demeter]

8. Morning Ozy and Friends! I'm Beginning to Hope that AIG Will Be Put Out of Our Misery

The pressure to shut them down, sell them out, and jail them is building in the places that matter.

Unlike the Impeachment effort, which could never get a chance above the grassroots level (and places like Vermont never qualify as higher than grassroots), AIG has made some powerful enemies.

The Mutual Assured Destruction gambit isn't going to hold up against their arrogance.
To save themselves, the big banks will sacrifice AIG, instead of hoping to squeeze more juice out of that lemon, and keep a low profile for a bit.

I'm hoping to play the Cassandra role--being accurate in my predictions, even if no one believes me.

[ozymandius]

11. Good morning. The painful fact that emerges throughout all this

is the distilled thoughts here, on this thread, are vastly more often correct than those thoughts of people reported in the news.

AIG has been one of the biggest bogeymen throughout this crisis. Its magnitude in terms of irresponsible scale emerged here when leveraging rules, authored by none other than our dear Bernanke, were found out to allow banks to go 35-1. This garbage heap was ensured by AIG. So this relationship is an established fact.

So to echo your comments, Demeter: shut them down; nationalize the company completely; either re-write or cancel the contracts based on Las Vegas rules; fire the top tiers' managers; replace them with custodial leadership NOT accountable only to the Fed; quickly organize the dismantling of the company, either spinning off or dissolving entities.

Edit to add: explore all avenues of criminality; prosecute

[Demeter]

15. Larry Summers: Stop the AIG Bonuses. Yes You Can. BY Aaron Zelinsky

http://www.huffingtonpost.com/aaron-zelinsky/larry-summers-stop-the-ai_b_175151.html

Larry Summers claims that nothing can be done about the AIG bonuses. As a former Secretary of the Treasury, he should know better.

Treasury Secretary Tim Geithner should direct the Commissioner of Internal Revenue to challenge the AIG bonuses as unreasonable compensation under the Internal Revenue Code. Finding the AIG bonuses to be unreasonable compensation would render them nondeductible for federal tax purposes, and would strengthen potential shareholder derivative suits to recapture The Great AIG Giveaway.

Section 162(a) of the Internal Revenue Code declares:

"There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business, including . . . a reasonable allowance for salaries or other compensation for personal services actually rendered."

In Gordy Tire Co. v. United States (155 Ct. Cl. 759, 1961), the United States Court of Claims declared that determinations of the reasonability, and thus the tax deductibility, of compensation should consider the "foresightedness and business acumen" of the individuals receiving such compensation. AIG's head honchos exhibited about as much foresightedness and business acumen as the captain of the Titanic. Larry Summers himself declared the AIG bonuses to be the "most outrageous" event of the "last 18 months."

If the AIG bonuses are determined to be unreasonable compensation, AIG would be unable to deduct such compensation for federal income tax purposes. The American taxpayers would thereby recoup some of the money they advanced to keep AIG solvent, money which wound up instead in the pockets of AIG's managers. Even if AIG does not owe any federal income tax this year, challenging the bonuses as unreasonable compensation prevents AIG from carrying the deduction forward for use as Net Operating Losses (NOLs) to offset future corporate earnings and thereby reduce AIG's future income taxes.

Determining these bonuses to be unreasonable compensation will also benefit AIG's shareholders. Corporate law allows a shareholder to bring a derivative action against the board of a corporation for recovery of excessive executive compensation. These shareholder claims will be buttressed by an IRS determination that the AIG bonuses are unreasonable.

Ordinarily, we discourage the Secretary of the Treasury (and the Economic Czar) from interfering with the day-to-day functions of the Internal Revenue Service, and the IRS has historically been loathe to examine the compensation packages given to employees of publicly traded corporations. However, these are abnormal times, and the AIG bonuses present extraordinary circumstances. AIG can respond to an IRS challenge in open court. Moreover, an IRS challenge to the reasonability of the AIG bonuses would send a strong message that such executive compensation shenanigans will not be tolerated.

Larry Summers says that the United States government is powerless to stop the unreasonable AIG executive compensation. He should know better. Mr. Summers: Yes you can.

[Demeter]

16. How to Stop AIG's Bonuses (OPTION 2)

http://www.huffingtonpost.com/william-black-tom-ferguson-rob-johnson-walker-todd/how-to-stop-aigs-bonuses_b_175351.html

AIG's decision to pay out at least a hundred and sixty five million dollars in bonuses takes the bank bailout program's abuse of the public trust to a whole new level.

This act simply cannot be allowed to stand. The only question is how to stop it.

"Sanctity of contracts" has for some time been TARP's equivalent of Harry Potter's magic wand, the thing you waved to make difficulties disappear (for financiers, of course; if you are an ordinary worker with a pension contract, by contrast, the magic doesn't work for you). AIG clearly takes the Treasury, the Federal Reserve, and the Obama administration for fools, who can be counted on to roll over yet again at the first whisper of the magic words. There is no reason for agents of the people of the United States, whose money AIG plays with, to be so sheep-like.

Remember that this is a firm that is 79.9% owned by the United States government. It is therefore quite possible to abort this outrage by decisive exercise of public authority. Within existing law, there is more than one way to do it, but a direct solution is readily at hand: Firstly, the US trustees in charge of the firm must immediately instruct the corporate treasurer to make no payments of any bonuses. They also need to order him to issue stop payment orders on any checks that fly out the door at the last minute, as with Merrill Lynch. Then the trustees need to split off the derivatives unit from the rest of the firm and separately incorporate it. This step leaves AIG's other businesses free to operate as usual. If the recipients of the bonuses refuse to waive them, then the derivatives unit should at once be thrown into bankruptcy, terminating all obligations to pay them. Right now, press reports suggest that the firm's top management waited until the last minute to inform the government of what was happening. AIG CEO Edward Liddy, accordingly, should be asked to resign at once, for the sake of public confidence and to send a clear signal that gaming the system is unacceptable. It is also past time for an investigation of the validity of AIG's past accounting and securities disclosures and its executive compensation program by the Office of Thrift Supervision, the Securities and Exchange Commission, and the FBI.

This leaves open the question of how to deal with all other obligations of the derivatives unit, including the notorious credit default swaps. We, like most independent analysts, are mystified by the determination of the Federal Reserve and Treasury to keep paying these off at 100% of their face value. But that's an issue for tomorrow. Today the task is to stop a grotesque abuse before it is too late. The path we outline here would do it, without throwing markets into turmoil. Nothing less than public confidence in the United States government as a whole is now at stake.

[ozymandius]

17. Summers: flirting with unemployability

May I see a show of hands? Who here believes that Summers wishes to keep future job opportunities alive by keeping future potential employers alive? I know - I know - pure speculation. I have not hard data. Just inferences.

We, the taxpayers, will probably lose every bailout penny given to AIG. AIG is paying billions to domestic and overseas banks that too the other side of AIG's bets. Yet, those who placed the bets are reaping boons.

Let's get technical for a moment. If AIG lost less money than it may have lost with anyone else but these execs at the wheel, this is not the same as making money. This is plugging the leak inadequately. That's not meritorious.

Did any one of these execs make any money for AIG? I doubt it. But then let's see the details. Who are they and what did they do to merit this pay? AIG will not say.

Summers would need to get his ass in gear to find this information. But it seems to me that he does not want to upset people who may have his future in their hands.

[Demeter]

19. Summers Is a GWBush Clone

Same miserable failure, different milieu.

[snot]

90. h*ll; excuse me, but it's easy:

first, pass a law criminalizing disposition of amts received as bonuses until further determination.

then, pass a law requiring them to be disgorged (back to us taxpayers).

if contract were so sacrosanct, they couldn't change the rules on SS.

[Demeter]

20. AIG Bonuses – It Gets Worse (ANOTHER DIVISION HEARD FROM)

http://brucekrasting.blogspot.com/2009/03/aig-bonuses-it-gets-worse.html

CLICK ON THE LINK TO SEE THE CUTE EDITORIAL PICTURES!


The level of outrage in America today over AIG's $450 Million in bonus payments is palpable. You can't go to a cocktail party without someone bringing it up. This may be a water-shed issue for the Obama Administration. The line in the sand may just have been crossed. The rapidly growing realization is that the only way to stop this insanity is to stop the money from flowing. The anti-bailout movement has become a mainstream issue these days.

As insulting as the bonuses are, it just gets worse for AIG vs the Taxpayer. This from a Greensboro NC paper:

AIG United Guaranty posted an operating loss of $485 million in the fourth quarter of 2008. For all of 2008, losses at the Greensboro-based private mortgage insurer totaled $2.48 billion.

This division of AIG fleeced the taxpayers for $2.5 Billion last year. Five times the amount of those bonuses that the press is screaming about this evening. That this happened in 2008 is troubling. That it is continuing to happen in March of 2009 is just shameful. An explanation:

Fannie Mae and Freddie Mac have always had terms for a Conforming mortgage. A Conforming mortgage requires 20% equity from the buyer. There has always been an exception to this rule. If a Fannie/Freddie 'approved’ insurance company was willing to take a first loss (“PMI”) on the loan portion that was in excess of 80%, then the Agencies could still buy the mortgages. This simple abuse of good credit policy allowed millions of homes to be sold to borrowers who had no down payment and little chance at maintaining a monthly mortgage. At the heart of America's real estate collapse is the fact that those high prices could not be sustained without 100% financing being available.

Fannie Mae and Freddie Mac bought as much of this 'enhanced' paper that they could. The yields were great and how could they lose if the likes of AIG were going to guarantee the first loss? In 2006 FNM/FRE were trying to build market share in high risk mortgages. They kept the party going.

This has ended very badly. AIG's results are reported above. Fannie and Freddie have very big losses on their enhanced book of business as well. The losses on the enhanced mortgages far exceeded the portion that was insured. The only ones who have made out were the regional banks that originated and sold the risky loans to the Agencies.

FNM recently reported that its default rate on enhanced loans was 5 times larger than on loans that had the traditional 20% down. 22% of Fannie's 2008 business was enhanced. AIG was one of the biggest providers of the PMI coverage.

These questionable standards are business as usual today at Fannie and Freddie. They continue to buy pools of mortgages where the required equity of a borrower has been replaced with an insurance company guarantee. The incredible part is that one of those 'approved’ insurers continues to be AIG.

AIG continues to write first loss insurance on high risk mortgages. With this questionable promise to pay attached, the loans can be sold to another ward of the state, FNM. The taxpayer is being fleeced. Twice. And the numbers are very large.

[Demeter]

21. AIG Posts List of Beneficiaries of Government Largesse Counterparties

http://www.nakedcapitalism.com/2009/03/aig-posts-list-of-beneficiaries-of.html

GO SEE IT--LOTS OF DETAILED PIE CHARTS AND SUCH

[radfringe]

22. AIG became the poster child

I'm not dismissing the serious anger towards AIG nor hinting that the anger is misdirected. AIG is far from being a hapless victim caught in the cross-fire.

AIG, Citi, BoA, and the rest of them don't get it. Wall Street doesn't get it. You don't go buying $1,000 trash cans, take trips to the Bahamas, or pass out bonuses when you're crying for money.

I realize Obama has directed Treasury to stop the AIG bonuses - but will stopping the bonuses stop the abuses and mismanagment?

The whole system needs to be investigated and examined - not just for the sole purpose of holding people accountable, but also to understand how and what happened to get us in this mess.

If you don't know where you have been, if you don't know where you are - then how do you know which way is forward?

[Hugin]

34. Excellent point.

So true... So true...

[ozymandius]

10. American Express credit card figures dent confidence

US stocks fell sharply in late trade, giving up previous gains to finish slightly below Friday's close as American Express announced more people had trouble paying credit card bills in February.

The news prompted a fall in the company's shares, which finished 3.3 per cent down at $12.66. It also dragged down the financial sector, which had enjoyed an early banking-led rally.

Shares in Citigroup surged back above $2, gaining 30.9 per cent to $2.33 as confidence in the banking sector continued to rise after Ben Bernanke, chairman of the Federal Reserve, reassured the public that economic recovery would begin in 2009 if government action worked.

.....

But many investors still feel the rally by financial stocks is flimsy. Terry Morris, senior vice president at National Penn Investors Trust Company, said: "Citi's rise is based on speculative buying that leads to short-covering. The company is not 40 per cent better than it was on Friday."

http://www.ft.com/cms/s/0/c5983464-1294-11de-b816-0000779fd2ac.html

[Demeter]

12. A Stock Market Rebound? By Bill Bonner

http://www.dailyreckoning.com/a-stock-market-rebound/


BILL BONNER PICKS UP ON THE ODYSSEUS THEME FROM WE TWO WEEKENDS AGO!

Gird up your loins, dear reader. Put wax in your ears and lash yourself to the mast. You are about to be tempted.

"Lead us not into temptation," says the famous prayer. The old timers knew we were weak. They knew we couldn't resist. They didn't pray that we would "just say no" to temptation. They knew that wouldn't happen. Instead, they prayed to God to keep temptation away from us.

There's nothing like a little temptation to get the juices flowing. A roulette wheel that seems to stop just where you thought it would...a pretty woman who smiles at you on the cross-town bus...a pastry as big as a sombrero and as rich as El Dorado - oh...Heaven forefend!

But the hardest temptation to resist is the temptation of getting something for nothing.

"Investors begin dipping toes back into stocks," reports a Reuter's article.

"While economies keep contracting, stocks may have already started pricing in the end of recession and the beginning of a recovery."

Last week, the stock market showed a little leg. Yes, prices rose 12% over a 4-day period - teasing us with the prospect of a little fun. Finally - a rebound. Maybe.

The Dow rose again on Friday - up 53 points. The index is still down more than 15% for the year...and down more than 50% from its all time high. It is rare to see such big losses without a major rebound. Our guess is that we're finally ready for one.

On that basis, we have taken down our "Crash Alert" flag. If we're right, we're going to see stocks go up 20% to 50%. And we're going to hear more people talking about the end of the recession...and a new bull market.

GM said it really didn't need an extra $2 billion last week. Two of America's biggest banks said they were running in the black again. Even the retail sales figures were not as bad as people expected.

Houses in some communities - such as Riverside, California and Miami, Florida - are selling for only about half of what they brought three years ago. Surely this is the bottom of the housing slump, right? And sales of existing houses - at bargain prices - rose almost 50% in January, from a year before.

Our advice is to listen politely - but don't take it too seriously. This is a depression. If it follows the form of previous depressions, it will seem for a while that it is not a depression at all...but a recession, and one that is ending.

Many - probably most - people still believe that the crisis is merely a pause in an otherwise healthy economic model. They wait for the bailouts to take effect...and for the U.S. consumer to begin buying again. That is the fondest hope, by the way, of the Chinese government. The Chinese hold $1.4 trillion worth of U.S. dollar assets. They're worried that their stash of cash may lose value. But, so far, it is the only thing that is NOT losing value.

The poor Chinese began spreading their cash around just before Humpty Dumpty fell off the wall. A number of their high-profile deals went bad:

"China loses billions on equities bets ahead of markets' collapse," says an awkward headline in the Financial Times. By the end of June '08, the Chinese held more than $100 billion worth of U.S. equities. Bad timing. But the collapse of the U.S. stock market makes Beijing's other dollar holdings look good. The dollar has gone up. So, the lesson the Chinese have learned is this: the safest thing you can do is to continue lending to your biggest deadbeat customer.

It is a dangerous strategy. But the Chinese think that if they extend enough credit to the U.S. consumer, he'll come back in the shop. And Ben Bernanke, another dreamer, said last week that the recession could end this year.

Stocks will probably rise for a few months. The economic news will be better. The Dow could rise to above 10,000. Then, we will be tempted to think that all the king's horses and all the king's men are actually better at putting things back together than their reputation suggests. We'll be tempted to think that those bailouts and giveaways actually did the job...and that now, rather than turn our backs on temptation...we can safely give in to it.

Be careful, dear reader. Be careful.

[Demeter]

13. ANOTHER BONNER BON MOT

What makes people think that they get better management by paying more money?

In the world at large, the difference in salary levels is shocking. At the top in Japan, the average executive earns only 3 times as much as the average salaryman. In Britain, top executives earn more than 10 times as much as their Japanese counterparts - or 39 times the average guy on the shop floor. And in America, the poor working stiff supports an executive who earns more than 300 times more than he does.

Is the American worth 10 times as much as his British confrere? Is he worth 100 times his Japanese competition? Is his business run better than either of theirs?

Don't make us laugh, dear reader. The only reason American executives earn so much is that they've conned the lumpeninvestoriat into believing that if they are paid more they will produce more. In fact, they're rarely the person actually responsible for output or innovation...and there is no evidence that we've ever seen to suggest that they do better at their jobs when they are paid more.

[54anickel]

69. I partially disagree with blaming the conned "lumpeninvestoriat". Not all investors are stupid,

or greedy enough to buy into that "pay more to produce more" line. Face it, the boards that make the executive compensation decisions are fully of cronies and buddies. They serve on each other's boards and perpetuate the grand theft. Ever notice: 1)How board members tend to serve on an average of 15-20 boards? 2)Drawing a decent salary from each board? 3)While being a member of upper management some corporation of their own?

They want you to believe it's all market based and that a person’s pay reflects their value-add. In reality it's determined by a group of friends and cronies with a special approach to salary negotiations: instead of figuring out how little they can pay and still attract talent, they figure out how much they elevate the average going rate so they could all benefit.

Management learns how to "pad their resumes" with certain paper-only accomplishments through creative use of business statistics, use that to advance a rung on the ladder to the next corporation for a higher salary...lather, rinse, repeat. They just continue their game of leap-frog amongst themselves leaving in their wake of a wave of destroyed companies, investors and lives.

I came across an interesting article in the October 2003 issue of The New Yorker while in the hospital waiting room today. Sort of fun to read in hind-sight...same shit different day. It's entitled The Coup De Grasso. And yes, nearly all the reading material in this "dump" was extremely out-dated, "upper-class" periodicals.

http://www.newyorker.com/archive/2003/10/06/031006ta_talk_surowiecki

The Coup De Grasso by James Surowiecki

At the end of your typical Horatio Alger novel, the plucky hero, having risen from the streets, is allowed to bask in his good fortune. He’s celebrated, not vilified, for the prosperity he has gained. So Dick Grasso, the former chairman of the New York Stock Exchange, a working-class kid from Queens who had made it into the city’s upper echelons, could hardly have anticipated the public furor over his hundred-and-eighty-eight-million-dollar pay package—a sudden fit of populist outrage that, two weeks ago, forced him to resign. Americans love the idea of getting rich. What, then, made them rail against Dick Grasso’s millions?

The answer might have something to do with the “ultimatum game,” a well-known experiment in behavioral economics. The game is simple enough. Take two people. Give them a hundred dollars to split. One person (the proposer) decides, on his own, what the split should be (fifty-fifty, seventy-thirty, or whatever) and makes the other person a take-it-or-leave-it offer. If he accepts the deal, both players get their share of the money. If he rejects it, both players walk away empty-handed.

The rational thing for the second person to do is to accept the offer, whatever it is, since even one dollar is better than nothing. But in practice this rarely happens. Instead, lowball offers are almost always rejected. Apparently, people would rather throw away money than let someone else walk away with too much. Other experiments illustrate the same idea. Essentially, people are willing to pay to punish those they think are free-riding or acting unfairly, even when doing so brings them no material benefits. The economists Samuel Bowles and Herbert Gintis call this the principle of “strong reciprocity.” Strong reciprocity works; it makes the whole system fairer. In the ultimatum game, for instance, the proposer usually ends up offering a relatively equitable split (say, sixty-forty) to insure that the other person accepts.

It so happened that, on the very day Grasso resigned, the primatologists Sarah F. Brosnan and Frans B. M. de Waal released a study showing that female brown capuchin monkeys seem to have a sense of fairness, too. Pairs of capuchins had been trained to give Brosnan pebbles in exchange for slices of cucumber. This idyllic monkey market economy was disrupted, though, when the scientists changed the pay scale, rewarding one monkey with a delicious grape and the other with the same measly old cucumber. Exposed to this injustice, the capuchins who were given cucumbers often refused to eat; forty per cent of the time, they stopped trading entirely. Things got worse when one monkey in each pair was given a grape for doing nothing at all. The other monkeys often responded by tossing away their pebbles; eighty per cent of the time, they stopped trading. The capuchins were willing to forfeit cheap food simply to express their displeasure at their partners’ unearned riches.

more...

[tclambert]

23. And not a word about unemployment.

How can you discuss the economy and depression and not mention jobs? It certainly makes his warning stronger to note the massive job losses still occurring. I won't believe the economy has really turned around until we see a month with job GROWTH rather than loss. I still hope that will happen sooner rather than later. Though there are certainly some jobs that need to be lost at AIG.

[Hugin]

27. It'll be a miraculous recovery*...

*Just like in 2002/2003... A (jobless) miraculous recovery.

:hurl:

[Demeter]

29. Bonner Is Independently Wealthy

He couldn't give a shit about JOBS. Jobs are for the French peasants he employs at his maison.

He is entertaining, and sometimes informative, but in no way perfect.

[Dr.Phool]

38. He didn't make it from investing. He must have inherited it.

Back in the early '90s, I was contemplating jumping into the market, and subscribed to a pricey newsletter he put out.

He picked nothing but losers. I didn't buy any of his stocks, but the rag had a money back guarantee, so after about 6 months, I requested and got a full refund.

[ozymandius]

14. Wall Street Firms Looking to Circumvent TARP Bonus Caps Via Salary Increases

I know one can maintain outrage for only so long, and I find it deeply disturbing to look at the inability to rein financial industry pay in despite horrific results. If these people are so valuable, let them go to boutiques and prove it, where you eat what you kill rather than feed off a big corporate plate. Companies on government life support should not be taking risks with taxpayer money, they should be cleaning up the dreck and focusing on relatively low risk business (even though the incentives are to do the reverse). That posture does not warrant paying up for largely mythical talent.

....

So ping your Congressman, but also send posts that make points you think the media is overlooking to the editorial page editor of your city paper. Other reader suggestions for making the fourth estate aware of the growing unhappiness among the fleeced taxpayer class are welcome.

From the Wall Street Journal:

In response to expected bonus restrictions, officials at Citigroup Inc., Morgan Stanley and other financial institutions that got government aid are discussing increasing base salaries for some executives and other top-producing employees, people familiar with the situation said.....

The discussions are at an early stage, partly because the government hasn't yet issued specific rules on the bonus payments that will be allowed at companies that received TARP aid. The talks also are proceeding cautiously because of the political volatility of pay, bonuses and perks on Wall Street, including outrage over American International Group Inc.'s promise to pay $450 million in bonuses to employees in the insurer's financial-products unit.

....

Yves here. I cannot believe these lobbyists can say this stuff with a straight face. These companies are not surviving with that supposed talent in place! I guess Mr. Talbott is the only person in America who missed all the media report of how the only thing between these firms and bankruptcy is plenty of government checks. So we are supposed to pay up for the people who drove these companies off the cliff so they can have the opportunity to do it all over again?

http://www.nakedcapitalism.com/2009/03/wall-street-firms-looking-to-circumvent.html

[Demeter]

18. Did You Notice No Bank Seizures Occurred Last Weekend?

Think the FDIC ran out of money? They couldn't have run out of insolvent banks!

Hence the bill in Congress to lend FDIC half a trillion....

[Hugin]

24. US HOT STOCKS: Citigroup, AIG, Asbury Automotive, Barclays (WSJ)

http://online.wsj.com/article/BT-CO-20090316-709371.html

"U.S. stocks traded mixed Monday. The Dow Jones Industrial Average rose 1.3% to 7321 and the Standard & Poor's 500 was up 1.5% to 768 but the Nasdaq Composite fell 0.2% to 1429. Among the companies whose shares are actively trading in the session are Citigroup Inc. (C), American International Group Inc. (AIG) and Asbury Automotive Group Inc. (ABG).

Citigroup ($2.33, $0.55, 30.90%) confirmed its quartet of nominees for director slots at next month's annual meeting, with the names including former Philadelphia Fed chief Anthony Santomero. The changes follow months of intensifying pressure from federal officials, who have been pushing new Citigroup Chairman Richard Parsons to oust some longtime directors and recruit new ones. Also Monday, Citigroup said the value of Chief Executive Vikram Pandit's 2008 stocks and options sank to $1.83 million from their grant date value of $37.3 million as the company's stock plummeted.

The rest of the financial sector was also higher Monday. Gainers in the banking sector include Bank of America Corp. (BAC, $6.47, $0.71, 12.33%) and regionals South Financial Group Inc. (TSFG, $1.14, $0.18, 18.54%), Huntington Bancshares Inc. (HBAN, $1.74, $0.18, 11.54%) and Fifth Third Bancorp (FITB, $2.01, $0.26, 14.86%). Best performers among the insurers include American International Group ($0.78, $0.28, 56.20%), Ambac Financial Group Inc. (ABK, $0.73, $0.14, 23.73%) and MetLife Inc. (MET, $20.70, $2.96, 16.69%).

Asbury Automotive Group ($2.91, $0.62, 27.07%) swung to a fourth-quarter net loss on $351 million in net charges and write-downs as the auto retailer and servicer said its accounting firm has expressed worries about its ability to continue as a going concern."
_________________________________________________________
:o

:suckers:

What is odd about this misleadingly titled piece and it's twin over at Forbes is that ALL or most of the companies mentioned are to some degree or another either Insolvent or on a Govt lifeline. Is this the spearhead of Timmy Gunther's "Operation Private Capital"?

[Demeter]

26. Brokers Don't Get Commisions If They Can't Sell Stock

So there's going to be tons of this--it doesn't have to be a governmental conspiracy (but just because we are paranoid doesn't mean our government isn't out to bankrupt us all!)

[Hugin]

32. AIG is in the headline for crying out loud.

As a 'Hot Stock'... I wonder how much the Taxpayers are paying some rarefied air breathing PR firm for this pant load of spin control?

[Demeter]

35. Too Hot to Handle, Maybe?

Who knows? Come the Revolution, if the documents are spared, maybe we will find out.

[Demeter]

25. Bailoutspotting (or The Search For The Great Financial Methadone Clinic)

http://www.nakedcapitalism.com/2009/03/guest-post-bailoutspotting-or-search.html

VERY LONG ARTICLE--A FEW SNIPPETS

Among the various life-support and addiction-enabling systems designed during sleep-deprived brainstorming sessions in some dimly-lit small office in D.C., in the triage that was the post-Lehman financial world, was the FDIC's TLGP (Temporary Liquidity Guarantee Program). The program, which became effective on October 14, 2008 and had an automatic opt-in clause for all participants, had the purpose of facilitating the issuance of senior unsecured debt at a time when credit financial markets had frozen and not a single bank was able to raise debt at reasonable rates. Many have speculated that of all alphabet soups designed to stabilize the financial system, the TLGP (especially in parallel with the other two liquidity-guaranteeing programs, the TAF and CPFF) has had by far the most pronounced positive impact: as banks can only function properly if their cost of capital is lower than the rate at which they lend out funds, finding a means to achieve cheap funding in the term markets was of life or death importance to banks. Furthermore, the TLGP being open only to Bank Holding Companies, was one of the reasons for the demise of the "old model" and the transition of such iconic investment banks as Goldman Sachs into BHCs (see here for a full list of terms of the TLGP). The importance of the TLGP is further underscored by the amount of FDIC-guaranteed debt issuance by financial institutions: over $300 billion of term financing has been raised by banks since the TLGP's inception with only 2 non-TLGP issues having been completed.

The banks' addiction to the TLGP is perfectly understandable as by using the explicit guarantee of the U.S. when issuing debt, banks do not subject themselves to having to compensate investors for taking on objective bank risk (subordinated bank CDS levels imply term interest rates multiples higher than rates at which TLGP issues come to market). However, like every addiction, the longer it continues the higher the likelihood we will all end up with just one more dead, zombied junkie.

It is unclear how credit markets would function (if at all) in the absence of guarantees: the longer liquidity guarantees remain in place, the harder it will be to remove them and the more damage they will do to undermining what little private market discipline remains. And while banks will be happy to suckle on the FDIC teat for ever, the latter is already approaching a degree of distress where even deposit guarantees (as measured by Deposit Insurance Fund reserves) will soon be impossible. It is against this backdrop, that Senate Banking Committee Chairman Chris Dodd is seeking to be the ultimate enabler to the financial system. In a little noticed bill submitted on March 5 entitled the Depositor Protection Act of 2009, Dodd is seeking to increase TLGP-guarantor FDIC's $30 billion Treasury borrowing limit up to $500 billion. While on one hand, this action could be seen as the preparation for an ultimate bank failure, on the other hand, the funds thereby released will make sure that the addiction of the system to cheap money at the expense of market efficiency (and taxpayer cash of course) will persist, and eventually result in the virtually guaranteed overdose by the narcomaniac system.
....

The FDIC would likely be more than happy to perpetuate the image of all being well in its bid to restore systemic confidence (which is after all the heart of the problem), if it weren't for one small snag: the FDIC is on the verge of insolvency. At its heart, the FDIC is an insurer of deposits. It does this not so much with actual cash which would pay off depositors if there were a global run on the bank (which is negligible when compared to the total size of roughly $5 trillion in deposits), but by being a symbol of the U.S. guarantee to protect its depositors. After the money market fund broke the buck in late September, the FDIC had its job cut out for it, yet it did what it could, primarily by increasing the depositor insurance amount from $100,000 to $250,000 until December 31, 2009, to restore some confidence. However, because since then the FDIC's core role has become diluted due to its bank issue guarantees under the TLGP, the actual cash guaranteeing individual deposits has dwindled.


....

Summary

There is nothing that can be done at this point to prevent the administration from leeching every last dollar out of its taxpayers to benefit the terminally addicted and zombied bank system. Using pretexts, subterfuge and lies, the administration's charade triage will only end once there are no more gullible taxpayers to provide their cash, no more demagogue senators and congressmen who will bend reality to make it seem that their actions benefiting a select few are for the benefit of all, and no more naive investors who buy into the promises that U.S. debt is the "safest investment." However, for the scope of this post, I can only hope that Perella Weinberg quickly realizes the futility of the TLGP fee increase, and that the goals of that particular action will be magnified when Dodd's hilariously titled DPA 2009 bill passes, as the negative consequences are likely to substantially surpass any positive ones.

In the grand scheme of things, at this point it doesn't really matter: at best, any FDIC action buys the U.S. financial system a year or so to delay the inevitable moment when the heroin addict decides it is time to seek the help of a methadone clinic before it is too late, only to realize that in its quest to feed the addiction, the administration forgot to provision for any precious methadone... but then again its availability would imply someone actually believes U.S. banks will, at some point, get to a point where detox is even a remote possibility which is obviously not the case (at least for now).

And if the unimaginable does happen, and the administration does comprehend that the wisest and correct thing is to use the cold turkey approach on U.S. financials, Zero Hedge provides some more sage advice from the protagonist of Trainspotting, who succeeded where so many U.S. banks have and will fail:

[tclambert]

28. Okay, I'll ask. Who was indicted and who put in prison?

Friday, the financial crimes scoresheet read 0, 0, and 1. Now it's 2, 0, and 2. What happened.

And I want to propose a new line for the scoresheet: "Financial executives on the lam." Rebecca Parrett makes one. Stanford was temporarily a second.

[DemReadingDU]

75. Parrett - that bird is still on the loose

1/9/09 Fugitive Rebecca Parrett on America's Most Wanted
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3681304&mesg_id=3681404


3/13/09 National Century's Parrett to be sentenced in absentia
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=432784&mesg_id=432889

[readmoreoften]

30. How come one nonsense memo comes out of Citibank and the market skyrockets for over a week?

I'm not a market analyst, but lemme tell you: I know bullshit when I see it.

One memo is leaked to the press about how Citi is--PSYCH--aok after all. Next thing you know, the whole market is breathing a hysterical sigh of relief over every single one of its ills. Suddenly EVERYONE is okay. GM's not so bad. AIG's quite obviously in the pink (or at least its CEOs are in the green. Doesn't an upturn have to come from somewhere? Some real phenomenon? Like we all discovered Bernanke was reading a chart upside down and actually the economy is actually doing fantastic? Or the entire SEC is about to be replaced and with it a stricter rule book that stops naked shorting? Or Glass Steagall comes back into vogue. At LEAST give us the illusion of a new bubble!

This is just pathetic. It's so desperate. It's just gross.

[Demeter]

33. Only One Answer, for Two Scenarios--They Are Lying

Either they are lying that all's well and the alarm is over

or they were lying that there was a crisis in the first place.

Or both.

[Demeter]

31. Bernanke on 60 Minutes

http://www.nakedcapitalism.com/2009/03/bernanke-on-60-minutes.html

YVES' COMMENTARY

Too much corn pone personal story, not enough real interview. But I must say, Bernanke is either an astoundingly self contained man or is on the best meds modern science has to offer.

Paul Kedrosky thinks this appearance is either wildly bullish or wildly bearish, and is somewhat inclined to the former view. I see this as enough of a departure from normal Fed rectitude to be Not a Good Sign, but I do have a nose for trouble.

SEE TWO VIDEOS AT LINK

[Festivito]

36. Debt: 03/13/2009 10,983,750,182,347.25 (UP 200,253,618.51) (Nearly nothing.)

(Many small days, one big day, another small day.)
(I feel a good feeling under Obama that each day when money is borrowed, that money borrowed is being spent on things our country needs, rather than the feeling under * that left me feeling that it might be being stolen under my nose while I watched. jus' say'n.)

= Held by the Public + Intragovernmental(FICA)
= 6,694,182,755,194.09 + 4,289,567,427,153.16
DOWN 13,659,079.13 + UP 213,912,697.64

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: $9.8, ABOUT TEN BUCKS for a 1B$ 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 305,967,858 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $35,898.38.
A family of three owes $107,695.14. (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 11,236,705,034.71.
The average for the last 30 days would be 7,491,136,689.81.
The average for the last 28 days would be 8,026,217,881.94.
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$/day.
There were 37 reports in 52 days of Obama's part of FY2009 averaging 0.53B$ per report, 0.47B$/day so far.
There were 112 reports in 164 days of FY2009 averaging 8.56B$ per report, 5.85B$/day.

PROJECTION:
There are 1,409 days remaining in this Obama 1st term.
By that time the debt could be between 12.9 and 22.3T$.
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)
03/13/2009 10,983,750,182,347.25 BHO (UP 356,873,133,434.17 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: 959,025,285,434.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----

163,836,281,825.72 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,319,118,379,088.18 in last 176 days.
That's 1,319B$ in 176 days.
More than any year ever, including last year, and it's 130% of that highest year ever only in 176 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 176 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=3784764&mesg_id=3784832

[Festivito]

77. Debt: 03/16/2009 11,033,157,578,669.78 (UP 49,407,396,322.53) (Big rise.)

(Many small days, one big day, another small day, now another big day.)

= Held by the Public + Intragovernmental(FICA)
= 6,741,972,565,592.27 + 4,291,185,013,077.51
UP 47,789,810,398.18 + UP 1,617,585,924.35

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: $9.8, ABOUT TEN BUCKS for a 1B$ 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 305,986,372 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,057.68.
A family of three owes $108,173.03. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 13,054,357,000.80.
The average for the last 30 days would be 9,138,049,900.56.
The average for the last 31 days would be 8,843,274,097.32.
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$/day.
There were 38 reports in 55 days of Obama's part of FY2009 averaging 0.89B$ per report, 0.66B$/day so far.
There were 113 reports in 167 days of FY2009 averaging 8.92B$ per report, 6.04B$/day.

PROJECTION:
There are 1,406 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 23.5T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/16/2009 11,033,157,578,669.78 BHO (UP 406,280,529,756.70 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: 1,008,432,681,757.30 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon

212,052,953,437.68 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,368,525,775,410.71 in last 179 days.
That's 1,369B$ in 179 days.
More than any year ever, including last year, and it's 135% of that highest year ever only in 179 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 179 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=3786348&mesg_id=3786491

[Dr.Phool]

37. Good morning, and happy St. Paddy's Day.

May you all be severely sobriety challenged by the end of the day. Don't forget the designated Italian or Englishman to serve as a driver.

If we drink enough today, we'll be serving corned Geitner and cabbage. You have to ingest a lot of Guinness and Jamesons to get past the smell, but us Irish are a tough bunch.

:toast: :beer: :toast:

:party:

Warning: Excessive alcohol consumption can lead to marital bliss. Twelve years ago, we were in Las Vegas, and got married the day after St. Paddy's day. But, that was the purpose of the trip, anyway.

:toast: :party: :party: :toast:

[Demeter]

39. Did that yesterday--Cherry Wine in the Steak au Poivre

Did wonders for my cold, too.

Happy St. Patrick's Day to you, too!

Tonight's a board meeting, so the corned beef is tomorrow's dinner....

[Demeter]

40. Stolen From jefferson_dem CBS POLL: Obama approval at 62% (unchanged), growing # believe country is

CBS POLL: Obama approval at 62% (unchanged), growing # believe country is moving right direction

Poll: Obama Approval Rating At 62 Percent
Posted by Sean Alfano | 1

Amid all the economic uncertainty and controversial government bailouts, President Barack Obama's job approval rating remains at 62 percent and includes a growing number of Americans who believe the country is moving in the right direction, according to a CBS News poll.

Nearly nine out of 10 Americans think the economy is bad and expect it will take time for any real economic progress to occur — 50 percent think it will take anywhere between 1 to 2 years — according to the poll.

A small sign that Americans are gaining a more positive outlook on the economy is the percentage drop in people very concerned about job loss as well as a drop in the percentage who say the economy is getting worse.

http://www.cbsnews.com/blogs/2009/03/17/politics/politi...

THE HOPE BUBBLE INFLATES

[DemReadingDU]

41. THE HOPE BUBBLE INFLATES

Yay!
Power to the People!
Propaganda lives!
:eyes:

[Roland99]

42. oops

[Demeter]

49. You Can't Leave Us in Suspense Like That, Roland

At least say "good morning"!

[Roland99]

64. Good morning!

I'd put the PPI/Housing numbers in the wrong spot.

[UpInArms]

45. dollar watch

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

Last trade 87.069 Change +0.069 (+0.09%)

Greenback Bid Against Yen; Offered Against Others

http://www.dailyfx.com/story/bio2/Greenback_Bid_Against_Yen__Offered_1237288116455.html

The overnight session shows a USD that is bid against the Yen and mildly offered against all other major currencies. Global equities are back under pressure with weakness in the financials and oil driving much of the price action. The release of the more dovish RBA minutes has also weighed on broader investor sentiment after the central bank disclosed that they would still be prepared to cut rates further despite the recent decision to stay on hold. In Japan, the rumor that the BoJ would be buying subordinated debt issues by banks was confirmed, with the measures imposed to stabilize the financial system. Meanwhile in the Eurozone, the much anticipated German ZEW was released, coming in much better than expected at -3.5 after analysts had been looking for a -8.0 print. The ZEW institute went on to say that the bottom of the recession was likely to be reached “this summer.” Also generating a lot of attention overnight were the SNB Roth comments in which the Swiss central banker provided additional color on the recent decision to implement intervention into monetary policy. Roth said the move was intended to protect the economy from entering a deflationary period and not as a means to gain competitiveness. Perhaps more importantly, Roth said that “we have clearly shown what are commitment is and the market has acted accordingly.” In the UK, PM Brown came forward to accept “full responsibility” for his role in the banking crisis and did not rule out the possibility for additional stimulus. Finally, oil news is once again getting a lot of attention after Algeria Energy Minister Khelil warned that OPEC would have to cut production if demand kept falling. He also reiterated the organization’s $70 price point. Looking ahead to the North American calendar, US producer prices (-1.4% expected), housing starts (450k expected) and building permits (500k expected) are due at 12:30GMT, along with Canada manufacturing shipments (-5.8% expected) and labor productivity (0.1% expected). US consumer confidence (-48 expected) comes out later in the day at 21:00GMT.

...more...

Euro Finds Support After Unexpected Increase in Investor Sentiment

http://www.dailyfx.com/story/bio1/Euro_Finds_Support_After_Unexpected_1237287625073.html

The Euro was trading below the 1.300 price level for most of overnight trading on the back of declining equity markets, before an unexpected increase in the German ZEW print sent the EUR/USD to as high as 1.3022. Indeed, investor confidence rose for a second month to -3.5 from -5.8 in March despite ongoing concerns over the banking system and a deepening recession for the country. However, the survey did show a decline in the current assessment as things continue to worsen in the region.

The improvement in sentiment and stabilizing prices will take some of the pressure off of the ECB which has come under scrutiny for not acting aggressive enough. As other central banks have brought their lending rates near zero and have embarked on off balance sheet efforts the ECB remains committed to their measured approach. Many fear that it will extend the length of the regions recession and cause a divide between the stronger and weaker economies which could threaten its existence. Until then the single currency’s status as a high yielder will keep it linked to risk appetite and traders should take a cue from equity markets when trading it.

The Pound fell to an intraday low of 1.4017 as declining risk appetite has pressured the currency. Additionally, the ongoing quantitative easing efforts remain a drag on Sterling. However, if we see 1.400 hold as support then the GBP/USD may look to carve out a new range between 1.4000-1.4500. The pound’s reaction to tomorrow’s U.K. employment report will give us a clue to future price action as it is expected to show the economy lost another 84,000 jobs. Meanwhile, U.K. house price falling another 11.5% according to the DCLG U.K. house price index shows that the central bank will need to remain committed to their efforts in order to stabilize the housing market. Sterling has started to find some support after the better than expected German investor confidence survey

The dollar has remained supported through overnight trading as recent risk appetite has started to wane. Confidence is increasing that the banking sector troubles will start to disappear as the global efforts to reinforce them take hold, but traders remain cautiously optimistic. The consensus is that governments still need to do more in particular the FOMC. Expectations are that the central bank following their two day meeting will announce more aggressive measures to increase monetary expansion. Markets have started to focus on credit card defaults after American Express announced that write offs in February rose 8.7%. These concerns have weighed on European equity markets and could carry over to the U.S. today, which could add further greenback support. Producer prices will cross the wires and is expected to show an annualized decline of 1.4% after a 1.0% drop in January. The drop in factory gate costs will allow the Fed to continue to expand its balance sheet with it concerns of fueling near-term inflation. Meanwhile, housing starts are expected to have fallen to an all-time low of 450,000 as tight credit markets have sunk demand and discourage new construction.

...more...

[Ghost Dog]

50. Central Banks Circling

... U.S. Treasuries were largely steady ahead of a two-day policy meeting of the Federal Reserve that begins on Tuesday. The yield on the benchmark 10-year note has been unable to rise above 3 percent after four attempts in the last few months, with investors wondering if the Fed will soon start buying long-dated Treasuries to drag rates lower in other markets. The yield is currently 2.97 percent.

Goldman Sachs economist Ed McKelvey still believes the Fed will shy away from that option for now because the worst of the consumer retrenchment may have passed, equity markets have improved lately and recent comments from Fed officials have suggested otherwise. He said the outcome of the meeting this week will likely be identical to the January meeting. "While we see several reasons why Treasury purchases make even more sense now than they did then, the FOMC appears disinclined to take this step yet," he said in a note.

The Bank of Japan is expected to discuss whether to raise its purchases of government debt at a two-day meeting ending on Wednesday, but market participants were unsure if the central bank will make such a move at this week's board meeting. June 10-year futures fell 0.33 point to 138.58. The benchmark 10-year yield was largely flat at 1.30 percent.

Outright purchases of government bonds is one of unorthodox policy options some central banks, such as the Bank of England, have resorted to because they have already chopped interest rates down to nearly zero.

The euro edged up against the U.S. dollar, in sight of five-week highs hit the previous day and girding for a clear break above $1.3000. Positive comments from commercial banks have improved confidence among investors and whetted their appetite for risk, though skepticism was endemic.

"Recent rises in share prices are merely led by players unwinding their short-positions and the currency market is merely reacting to the move in stocks," said a trader at a Japanese bank.

After hitting a near three-year high on March 4, the ICE U.S. dollar index (^DXY - News), a measure of its performance against a group of major currencies, has fallen about 3 percent.

/... http://biz.yahoo.com/rb/090317/business_us_markets_global.html?.v=3

[Ghost Dog]

46. LEAP/E2020: Manipulation underway; Geopolitical Breakup in offing

This month, LEAP/E2020 doesn't expect G20 'leaders' to attempt to take what it considers the best course - a multilateralist approach involving new global currency and regulatory regimes. Instead there will be increasing geopolitical dislocation and dissonance.

According to LEAP/E2020, there are only two options left for the G20 leaders who gather next April 2nd in London: either they rebuild a new international monetary system, creating the conditions for a new global system that involves all the main global players, and reducing the crisis to a maximum of 3 to 5 years; or they strive to prolong the current system, thrusting the world into a decade long tragic crisis starting at the end of 2009.

In this 33rd edition of the GEAB, we wish to describe the two ways forward that remain open until summer 2009. Beyond that, our team estimates that the “short-term crisis” option will be obsolete and that the world will be on the path towards global geopolitical dislocation (1), and a deep and decade-long crisis.

For this reason, due to the urgency, LEAP/E2020 has decided to publish next March 24th on a global scale an open letter to all the leaders of the G20. This will be our team’s attempt to divert the system from the long and tragic crisis option.

The situation appears all the more worrying in that tensions are growing on the eve of the April 2nd summit. Indeed a number of thinly disguised threats on the part of some G20 leaders, as well as various attempts to manipulate public opinion on the part of others are to be observed...

LEAP/E2020 provides an illustration of what it calls "Wall Street’s and the City’s attempt to destabilize the EU banking system and the Euro" through media manipulation: an analysis with detailed reasoning to explain why the so-called «Eastern European financial bomb» is one such recent concoction and is not real. The details are also here: http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=433846&mesg_id=433846

[Demeter]

48. I don't know About Any of That, But I Wish We Had Smart and Seasoned Appointees

and elected officials, not a bunch of rank greenhorns and a problem bigger than anyone has ever seen before.

Our only saving grace may be that there aren't any bigger crooks out there--they are all native-born and we can arrest and prosecute ours, if we choose.

there's no good time to have a crisis, but this could be just about the worst.

Of course, without this crisis, we'd be moaning about President McCain.

Life is a cabaret, old chums.

[Ghost Dog]

58. France, Germany say regulation priority for G20

BERLIN, March 17 (Reuters) - France and Germany said the top priority for April's G20 summit should be to draw up a new global financial architecture, stressing the need for regulation rather than more stimulus measures, as sought by Washington.

In a joint letter to the EU presidency released on Tuesday, the leaders of the two countries said the EU should propose all hedge funds and other private investment firms that could pose a systemic risk should be registered, regulated and supervised.

"The top priority is the putting in place of a new global financial architecture," French President Nicolas Sarkozy and German Chancellor Angela Merkel wrote in the letter, released in Berlin and also addressed to European Commission President Jose Manuel Barroso.

/... http://www.reuters.com/article/marketsNews/idINLH62695420090317?rpc=44

This is something, it is apparent, the US & UK do not want...

[Joe Chi Minh]

74. Somebody should wise them up and tell them about the American Dream. Gordon always

wanted it for us.

[Robbien]

60. The US is pushing G20 to go for door number two

The US is asking the IMF to print its own money, billions out of thin air.
http://macedoniaonline.eu/content/view/6010/52/

Senior figures in the US Treasury have been encouraging the Fund to issue hundreds of billions of dollars worth of so-called Special Drawing Rights in the coming months as part of its campaign to prevent the recession from turning into a global depression.

Should the move, which is up for discussion by the summit of G20 finance ministers this weekend, be adopted, it will represent a global equivalent of the Bank of England's plan to pump extra cash into the UK economy.

However, economists warned that the scheme could cause a major swell of inflation around the world as the newly-created money filters through the system. The idea has been suggested by a number of key figures, including billionaire investor George Soros and US Treasury adviser Ted Truman.

Simon Johnson, former chief economist at the IMF, said: "The principle behind it is that everyone would get bonus dollars and instead of the Federal Reserve having to print them, everyone gets them.

[Ghost Dog]

61. U.S. Treasury seen offering systemic risk plan soon

WASHINGTON (Reuters) - The U.S. Treasury is expected to propose within days the creation of a "systemic risk regulator," probably the Federal Reserve, to oversee banking and market problems that could threaten the economy.

On both sides of the Atlantic, "tunnel vision" is out, and the "big picture" is in when it comes to financial regulation which is the next frontier for policy-makers beginning to look beyond rescuing the financial system and toward fixing it.

Some U.S. and EU regulators want to revamp the oversight apparatus so the financial system never again falls to pieces with no clear view in government of the foundations crumbling.

That was the sense on Monday after a 20-nation meeting of finance ministers near London, where British Prime Minister Gordon Brown predicted "massive change" in oversight.

The U.S. Treasury is expected to seek not only a stronger Federal Reserve, but tougher capital standards for banks and better derivative market clearing and settlement mechanisms.

Proposals for better consumer protection and more aggressive oversight of hedge funds and credit rating agencies are anticipated, as are new ways to unwind big companies whose outright failure could do wide-scale economic damage.

The Treasury was unlikely to make proposals on all these topics in one legislative package, congressional aides said.

/... http://biz.yahoo.com/rb/090316/business_us_financial_regulation.html?.v=3

[End Of The Road]

51. Question about AIG and pension plans

Does AIG insure many pension plans? Apart from PBGC, that is, through CDSs, or the like?

You smart money people are going to have to try to figure out what I'm asking, because I'm not really sure myself.

I guess, bottom line, is how many pensions will be affected directly if AIG "goes under"?

[DemReadingDU]

62. Good Question

I have no idea the answer.

Here is the AIG list of counterparties. Don't see that AIG insured pensions directly, but maybe indirectly thru banks and states?
http://firedoglake.com/wp-content/uploads/AIG-counterparty-release.pdf

[antigop]

70. antigop briefly checking into SMW -- here is some info for you

The following excerpt talks about CalPERS--the largest U.S. pension fund. IF CalPERS was looking at doing this, then how many others were considering it?

Credit default swaps could have been sold to protect pension funds' bond holdings against default or the funds could buy derivatives without holding the bonds they cover:
http://articles.latimes.com/2007/jun/14/business/fi-wrap14.3

The pension agency would start with a pilot program in which the derivatives, known as credit-default swaps, would be limited to a small fraction of its $49-billion fixed-income portfolio, according to a report prepared for the agency's investment committee.

If successful after a year, CalPERS should consider expanding the program, the report said.

CalPERS currently gains from its recognition of "overvalued" bonds only by not investing in them, the report says. The new program would provide another way of profiting "from a decline in the price of an issuer or instrument."

Credit-default swaps, which act like insurance, are bought by bondholders to protect themselves from default. The market value of the swaps rises as the bond issuer's financial health declines.

CalPERS, however, would be buying the derivatives without holding the bonds they cover, so it would profit from a decline in the market value of the bonds.

CalPERS, with $240 billion under management, is looking at generating greater returns as the cost of covering retirement and healthcare benefits for public workers grows.

Another article on how this could work...
http://www.huffingtonpost.com/david-paul/credit-default-swaps-the_b_133891.html

Sorry...don't have much time to elaborate. But I think the two links should give you a good idea on how pension funds could use CDS.

<edit to add> I am assuming you are referring to defined benefit pension plans, not 401(k) plans. I have posted before on the SMW about securities lending programs in 401(k)'s. One of the articles posted on DU -- I think it was the NY Times "House of Cards" article--talked about how AIG had a
securities lending program. I haven't found any link between its securities lending program and its use by 401(k)'s. I"m still looking to see if there is a connection there.

Sorry...typing quickly..have to go.

Post any questions and I will check in later tonight.

[End Of The Road]

72. Thanks - I'll read the links tonight

I'm at work and supposed to be working (ha), not reading SMW. And yes, you were right, I did mean DB plans.

Thank you for the info, I'm sure I'll have a coupla questions --

Best,
EOTR

[DemReadingDU]

76. Thanks!

You are good finding these old links!


Edit: I'm assuming AIG could have insured pension plans.

Would they be reimbursed with our taxmoney during the bailouts? If AIG ultimately goes down, then pension plans would be worthless if insured by AIG?

[End Of The Road]

85. And what about people who have purchased annuities

for retirement -- both those who are currently receiving annuity payments, and those who will receive them in the future? I'm wondering if they are more at risk than the DB plans.

[Dr.Phool]

53. Grassley comes up with best AIG solution I've heard yet! Japanese style!

Senator on AIG execs: Quit or commit suicide
Aide later says he doesn't want them to kill selves, but wants apologies



updated 19 minutes ago

IOWA CITY, Iowa - Iowa Sen. Charles Grassley suggested on Monday that AIG executives should take a Japanese approach toward accepting responsibility for the collapse of the insurance giant by resigning or killing themselves.

The Republican lawmaker's harsh comments came during an interview with Cedar Rapids, Iowa, radio station WMT. They echo remarks he has made in the past about corporate executives and public apologies, but went further in suggesting suicide.

"I suggest, you know, obviously, maybe they ought to be removed," Grassley said. "But I would suggest the first thing that would make me feel a little bit better toward them if they'd follow the Japanese example and come before the American people and take that deep bow and say, I'm sorry, and then either do one of two things: resign or go commit suicide."
Story continues below ↓

http://www.msnbc.msn.com/id/29733519/

[DemReadingDU]

63. Sounds like good plan to me, n/t

[Demeter]

84. I'd Make Them An Offer They Can't Refuse

any bonus exceeding 10% of base salary shall include a pink slip. Said Employee has the option of accepting both or rejecting both. No parachutes, no pensions, no benefits apply. No either/or.

[Robbien]

54. Replacing Blackwater (with Dyncorp)

The decision not to renew the Iraq security contract of Blackwater Worldwide, now known as Xe, when it expires in early May has left the State Department scrambling to fill a protection gap for U.S. diplomats and civilian officials there. DynCorp International of Falls Church and Triple Canopy of Herndon, which have far smaller presences in Iraq, have been asked to replace the ousted company, according to State Department and company officials. To meet time, training and security-clearance pressures, officials said, one or both of the firms are likely to undertake the task by rehiring some personnel now working for Blackwater.

Meanwhile, fallout from a shooting by Blackwater employees has led both the Pentagon and the State Department to create new categories of "full-time, temporary" federal jobs to handle some tasks currently done by contractors.

http://voices.washingtonpost.com/washbizblog/2009/03/early_briefing_replacing_black.html

As evil as Blackwater is, they are just babes in arms compared to Dyncorp.

[Tansy_Gold]

55. "federal jobs to handle some tasks currently done by contractors."

Isn't this what our military used to do?

I always have to interject into conversations about the number of "troops" in Iraq compared to the numbers from Vietnam that in the 2003-2009 operation, much of what used to be done by "troops" is now outsourced to private contractors, and that if the numbers were combined, we might have a better picture of how the comparison really matches up. when the difference is between a $3000/month "troop" and a $30,000/month "contractor" the costs just in dollars might make a few people rethink their attitudes.




Tansy Gold, who doesn't make anything even close to $3000/month but isn't in Iraq, either.

[Robbien]

57. The sad part about this is that there is a "temporary"

in front of the job category.

We will temporarily replace Blackwater personnel with reasonably paid government personnel until such time as Dyncorp can hire on sufficient personnel. Then we will go back to paying the higher price for privatized service.

[Marie26]

56. Because Dyncorp is *so* much more reputable

Jeez.

[Tansy_Gold]

59. Oh yeah, riiiiiiiight.

And they'll be even MORE reputable when they've hired all those laid-off Blackwater mercen- er employees.

:puke:

[Demeter]

65. Send In the Marines!

Didn't that used to be their job? I bet they'd like it back, too.

[Robbien]

66. Natural gas drillers are idling rigs at the fastest pace since 2002 due to low prices

setting the stage for this year’s worst commodity to almost double as supplies drop faster than demand.

About 45 percent of U.S. rigs have been shut since September, which means fourth-quarter gas production will tumble 5.2 percent, faster than the 1.9 percent decline in use, the Energy Department forecast. Prices will rise to $7 per million British thermal units by January from $3.824 today on the New York Mercantile Exchange, according to a Bloomberg News survey of 20 analysts. The gain would be the largest since the first half of 2008.

The last time drillers stopped rigs at this pace was seven years ago, when futures advanced 86 percent. The world’s biggest hedge funds have already started to close bets on a drop in prices, government data show. Natural gas tumbled 30 percent this year, the worst start since 2006, as sales weakened with the recession.

My comment: I have been following with great interest the drilling rig data that is available on the Baker Hughes website. As drilling comes off and the effects of depletion kick in we should see a nice rebound in prices for natural gas. I would suggest watching the charts of natural gas and some of the bigger producers who will benefit from a price rise. Encana, Devon, XTO are some names. I think an aggressive strategy of buying some long dated call LEAPS could payoff nicely by next winter. Like I said I will be watching the rig count, natural gas in storage and the chart action on these stocks as the smart money will be moving in well before the natural gas price begins to seriously climb.

http://jutiagroup.com/2009/03/17/natural-gas-drilling-shutting-down-due-to-low-prices/



Uh-oh

[Dr.Phool]

67. Kudlow makes it official! Time to BUY! BUY! BUY! BUY!....

Via TPM


On CNBC just now, Larry Kudlow just predicting the coming historic rally in bank and financial stocks now that the "jack boot" of regulatory oversight was being lifted.

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

[Tansy_Gold]

68. Why is this man not in an institution for the seriously mentally ill?

with no disrespect meant to the SIM population, but really, they shouldn't be offering investment :puke: advice and neither should Kudlow. Or his former/ex partner in slime and crime, Cramer.

wankers.



TG

[Marie26]

81. It's a bottom!!

LOL.

[CatholicEdHead]

86. He always says that

:crazy:

He probably gets his market tips from above, aka Tom Monaghan, who he helps out with Ave Maria Mutual Funds and his cozy group of millionaires (at least they were before last fall).

[specimenfred1984]

71. Goody goody, inflation is up even though nobody has any money

It must be supply and demand, LOL. The USA is corrupt, fascist and lawless. I laughed at the politico who said yesterday "We're a nation of laws".

[DemReadingDU]

80. Nation of laws

Ha!


If we were a nation of laws, we wouldn't be in this mess today.

[alterfurz]

82. "The law is like a spider's web--

--the small are caught and the great tear it up." -- Solon of Athens

[specimenfred1984]

73. CAT laying of 2454 workers in 3 states, you know what that means...

Time to buy the stock, it's a great company that's shrinking, becoming leaner and meaner, getting rid of the fluff, becoming more efficient, blah blah blah...vomit.

[radfringe]

78. lean and mean... heh

there's lean and mean.... and then there's anorexia

[radfringe]

79. lean and mean... heh

there's lean and mean.... and then there's anorexia

[Kolesar]

88. ...infrastructure spending in the "stimulus bill" was not big enough...eom

[Robbien]

83. Potential new head of the FDA told FDA scientists to STFU

Interim FDA Commissioner Frank Torti (photo) wants his employees to zip their lips. According to In Vivo, Torti sent out a memo last Friday telling FDAers that they need to keep proprietary information to themselves. Trade secrets, confidential commercial information, personal privacy data, law enforcement info and privileged intra-agency and inter-agency communications such as email, memos and letters--they all have to be kept within the FDA cone of silence, Torti wrote.

Of course, the FDA is committed to "the principles of open government," the memo states (as quoted by In Vivo). But FDA employees have to make sure the agency keeps up with "its obligations to keep certain information in its possession confidential." Given the long list of to-be-kept-secret-information, it sounds to us like "certain information" really means "99.5 percent of our information."

You'll recall that the FDA has found itself red-faced a few times this year already, after the media picked up on internal dissent within the device division over the approval of a certain knee device and over at CDER after an advisory committee barred a member at the last minute for "intellectual bias." Plus, FDA scientists have made headlines with a protest against what they see as a "corruption" of the approvals process, particularly for devices.

In Vivo's Ed Silverman points out one final irony: He managed to get a copy of the memo prohibiting the leakage of memos. Oh, the calamity.

http://www.fiercepharma.com/story/fdas-torti-shut-your-flapping-traps-stat/2009-03-17

[UpInArms]

87. seeing green on St. Patrick's Day - end o' day numbers

Dow 7,395.70 178.73 (2.48%)
Nasdaq 1,462.11 58.09 (4.14%)
S&P 500 778.12 24.23 (3.21%)
10-Yr Bond 3.003% 0.052

NYSE Volume 7,063,784,000
Nasdaq Volume 2,126,583,250

4:15 pm : A rebound in financial stocks provided leadership to the broader market, helping stocks climb steadily and close at session highs.

Stocks began the session in mixed fashion. Trading was choppy in the absence of a clear leader. Given the weak close to the prior session, it appeared stocks would extend their losses as financials fell to a 2.5% loss in the first few minutes of trading.

The downturn was short-lived, though, as financials rebounded to spend the rest of the session staging an advance. As has been the case in recent weeks, financials have been a key determinant in the direction of the broader market. Financials closed with a 6.6% gain at session this. All three major indices also closed at session highs.

The Nasdaq logged the best performance of the headline indices. Its gain was underpinned by strength in large-cap tech shares. However, the strength in large cap tech didn't preclude small-cap stocks from putting together a solid advance; the Russell 2000 Small-Cap Index outperformed all the broader indices with an 4.5% advance.

Nonetheless, gains were widespread. Every major sector in the S&P 500 closed the session higher. Even materials stocks (+0.4%) logged a gain after spending all but the last 10 minutes of the session in the red. Materials had been down more than 2% at their session low.

The sector's relative weakness followed news Nucor (NUE 33.55, -3.40) and Dow component Alcoa (AA 5.59, -0.53) expect to post losses for the first quarter. Alcoa also stated it will slash its quarterly dividend to $0.03 per share from $0.17 per share. Diversified metals company Rio Tinto (RTP 112.58, -3.82) issued pessimistic comments of its own, citing continued weakness in commodities.

Despite the pickup in the materials sector, steel stocks still closed with a 7.4% loss.

Economic data had little impact on trading. The Producer Price Index (PPI) for February increased 0.1% after a 0.8% increase the month before. The PPI was expected to increase 0.4% in February. Core PPI increased 0.2% after a 0.4% increase in the prior reading. The consensus called for a 0.1% increase in February.

February housing starts hit an annualized rate of 583,000, up from record lows and above the rate of 450,000 starts that was expected. Meanwhile, February building permits hit an annualized rate of 547,000, which is above the 500,000 that was expected. The prior reading showed 531,000 permits. Given the glut of unsold homes on the market, there is concern an increase in starts and permits could retard inventory reduction, which would prolong a recovery in the housing market.DJ30 +178.73 NASDAQ +58.09 NQ100 +4.1% R2K +4.5% SP400 +3.7% SP500 +24.23 NASDAQ Adv/Vol/Dec 2069/2.10 bln/598 NYSE Adv/Vol/Dec 2415/1.49 bln/643

3:30 pm : The equity markets recently pushed to fresh session highs. The broadest market indicator, the S&P 500, is now up 2.2%.

On the other hand, commodites are trading with mixed results.

April crude oil enjoyed a strong session as it attempted to push the $50 level. The futures contracts finished up 3.8% to $49.14 per barrel.

April natural gas traded in the red for almost the entire pit session. After hitting lows of $3.76; natural gas closed at $3.82 per contract, down less than 1%.

Gold futures traded a relatively quiet session today. The April futures contracts closed at $916.80 per ounce, down less than 1%.

Silver prices also saw a modest decline. The May silver contracts closed at $12.67 per ounce, down 1.7%, just above the session low of $12.63 per ounce.DJ30 +119.39 NASDAQ +39.75 SP500 +16.59 NASDAQ Adv/Vol/Dec 1881/1.7 bln/759 NYSE Adv/Vol/Dec 2233/1.0 bln/803

[skoalyman]

89. Joseph Goebbels could have only dreamed of ever pulling off

propaganda of this magnitude,I don't think this bubble can last too long specially when all we may have left is burger flipping jobs they best put a fast food joint on every corner if they wish for everyone to have a job and be able to afford to eat at those places.