STOCK MARKET WATCH, Tuesday March 31

[ozymandius]

Source: du

STOCK MARKET WATCH, Tuesday March 31, 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 30, 2009

Dow... 7,522.02 -254.16 (-3.38%)
Nasdaq... 1,501.80 -43.40 (-2.81%)
S&P 500... 787.53 -28.41 (-3.48%)
Gold future... 917.70 -7.60 (-0.83%)
30-Year Bond 3.60% -0.02 (-0.44%)
10-Yr Bond... 2.71% -0.05 (-1.70%)

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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

Nervousness Sets In
BY RYAN J. PUPLAVA, CMT

With the announcement from President Obama that GM is getting one last chance before bankruptcy, it is completely off of the most actively traded stocks today (top 25 across all US exchanges). Interestingly, there are six financial stocks and four financial ETFs that are on the most actively traded list. Are traders considering the language the President is making towards GM may also be shared with a financial institution or two? Do the financials have one last, limited chance to “fundamentally restructure?” Bear Sterns, Indymac, Washington Mutual, and Lehman Brothers have failed. So where does “too big to fail” fall for Bank of America or Citigroup? The government could already own a 36% stake in Citigroup if they converted the maximum amount of preferred stock.

.....

I believed this because there was a lot of space between March 2nd and 1st quarter earnings for government policy to move the market.

* Starting on March 10th, Citigroup announced that it’s operating at a profit for the first two months of 2009. The S&P 500 rose 40 points and we started a bear market rally.
* March 16th, prompted by a congressional meeting the week before, announced new mark-to-market guidance suggesting the use of Present Value of cash flows (PV) to price illiquid securities and use judgment when valuing assets.
* March 18th Ben Bernanke announced more quantitative easing and a bigger balance sheet for the Fed.
* On March 23rd, Tim Geithner announced the Public-Private Investment Program (or basically TARP II).

It seems that these past weeks since March 10th have been a blur of “what are the best performing sectors” and “the bottom is in.” Rightly so, many technical analysts have pointed toward which sectors have performed the best, and they are the very same that begin to lift at a market bottom such as: cyclicals and technology. Additionally, the financial sector that has been blamed for a majority of the bear market has rebounded strongly off the March lows. This rally has been relentless without any recourse due to the continued rapid-fire moves by the government to flip the financial markets right-side-up. This rally has been engineered thus far, mostly by the government.

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

[ozymandius]

2. Today's Reports

09:00 S&P/Case-Shiller Home Price Index Jan
Briefing.com NA
Consensus -18.6%
Prior -18.55%

09:45 Chicago PMI Mar
Briefing.com 36.0
Consensus 34.4
Prior 34.2

10:00 Consumer Confidence Mar
Briefing.com 28.0
Consensus 28.0
Prior 25.0

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

[ozymandius]

3. Oil stays below $50 in Asia over economic jitters

KUALA LUMPUR, Malaysia – Oil prices edged up Tuesday in Asia but remained below $50 a barrel as fears of a major automaker bankruptcy in the U.S. sparked renewed jitters over the global economy.

Benchmark crude for May delivery rose 69 cents to $49.10 by late afternoon in Asian electronic trading on the New York Mercantile Exchange. The contract fell more than 7.6 percent, or $3.97, to settle at $48.41 on Monday.

.....

Most energy market analysts found no fundamental reason for a rally this month that pushed oil prices from $40 per barrel to more than $50. Crude inventories continue to build even with OPEC cutting production and domestic producers suspending oil projects.

.....

In other Nymex trading, gasoline for April delivery gained 1.31 cents to $1.393 a gallon while heating oil rose 0.75 cents to $1.3501 a gallon. Natural gas for May delivery added 6.2 cents to $3.801 per 1,000 cubic feet.

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

[Demeter]

4. Banks Starting to Walk Away on Foreclosures By SUSAN SAULNY

http://www.nytimes.com/2009/03/30/us/30walkaway.html?_r=1&hpw

SOUTH BEND, Ind. — Mercy James thought she had lost her rental property here to foreclosure. A date for a sheriff’s sale had been set, and notices about the foreclosure process were piling up in her mailbox.

Ms. James had the tenants move out, and soon her white house at the corner of Thomas and Maple Streets fell into the hands of looters and vandals, and then, into disrepair. Dejected and broke, Ms. James said she salvaged but a lesson from her loss.

So imagine her surprise when the City of South Bend contacted her recently, demanding that she resume maintenance on the property. The sheriff’s sale had been canceled at the last minute, leaving the property title — and a world of trouble — in her name.

“I thought, ‘What kind of game is this?’ ” Ms. James, 41, said while picking at trash at the house, now so worthless the city plans to demolish it — another bill for which she will be liable.

City officials and housing advocates here and in cities as varied as Buffalo, Kansas City, Mo., and Jacksonville, Fla., say they are seeing an unsettling development: Banks are quietly declining to take possession of properties at the end of the foreclosure process, most often because the cost of the ordeal — from legal fees to maintenance — exceeds the diminishing value of the real estate.

The so-called bank walkaways rarely mean relief for the property owners, caught unaware months after the fact, and often mean additional financial burdens and bureaucratic headaches. Technically, they still owe on the mortgage, but as a practicality, rarely would a mortgage holder receive any more payments on the loan. The way mortgages are bundled and resold, it can be enormously time-consuming just trying to determine what company holds the loan on a property thought to be in foreclosure.

In Ms. James’s case, the company that was most recently servicing her loan is now defunct. Its parent company filed for bankruptcy and dissolved. And the original bank that sold her the loan said it could not find a record of it.

“It is what some of us think is the next wave of the crisis,” said Kermit Lind, a clinical professor at the Cleveland-Marshall College of Law and an expert on foreclosure law.

For older industrial cities like South Bend, hard times in the mortgage market began before the recent national downturn, as did the problem of bank walkaways. In the case of Ms. James, a home health care administrator, the foreclosure proceedings began in the summer of 2007, when she could not keep up with the adjustable rate on her mortgage.

In Buffalo, where officials said the problem had reached “epidemic” proportions in recent months, the city sued 37 banks last year, claiming they were responsible for the deterioration of at least 57 abandoned homes; the city chose a sampling of houses to include in the lawsuit, even though the banks had walked away from many more foreclosures. So far, five banks have settled.

In Kansas City, Rachel Foley, a lawyer who handles housing cases, said bank walkaways were “a rare occurrence two to three years ago.”

“We’re seeing them dumped more and more at the moment,” she said.

Experts suggest the bank walkaways are most visible in states where foreclosures are processed through the courts and therefore tend to be more transparent. Other states, like Indiana and New York, have court-mandated foreclosures, but roughly half of the states allow foreclosures to proceed without court intervention, making it difficult to accurately count the number of bank walkaways in recent months.

The soft housing market and the vandalism that often occurs when a house sits empty are the two main factors influencing the mortgage holders’ decisions to walk away, said Larry Rothenberg, a lawyer for Weltman, Weinberg & Reis, one of the larger creditors’ rights firms in the country.

“Oftentimes when the foreclosure starts out, it’s a viable property,” Mr. Rothenberg said, “but by the time it gets to a sheriff’s sale, it might not have enough value to justify further expense. We’ve always had cases where property was vandalized or lost value, but they were rare compared to these times.”

The problem seems most acute at the bottom of the market — houses that were inexpensive to begin with — and with investment properties, where investors and banks want speedy closure by writing off bad loans as losses. Banks and investors typically lose 40 percent to 50 percent of their investment on every foreclosure.

Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter, said some properties had become such liabilities for investors that it was not even worth holding on to them to strip valuable fixtures, like kitchen appliances, toilets and hardware.

“The whole purpose of foreclosure is to take title of the property, sell it and recoup what money you can,” Mr. Cecala said. “It’s just a sign of the times that things are so bad no one wants to take possession of the property.”

In South Bend, boarded-up houses for whom no one has stepped forward are dotting the landscape, adding a fresh layer of blight to communities that were already scarred from the area’s industrial decline.

The city is hoping to create a new type of legal mediation process that would bring together the homeowners and the mortgage holders to settle their disputes while allowing the owners to remain in the home — considered crucial to any stabilization effort.

“I’d say in the last three or four months, we’ve seen dozens of these cases,” said Chuck Leone, the South Bend city attorney. “We see it one of two ways. One is that the bank will simply dismiss the foreclosure complaint. The other is that the mortgage holder will follow through and take a judgment of foreclosure, but then not schedule the property for sheriff’s sale.”

In Ms. James’s case, it has been impossible to determine who canceled the sheriff’s sale, since her last mortgage holder went out of business. Even the city clerk’s records did not provide an answer.

“Nobody has any idea who owns what or who’s responsible,” said Judy Fox, Ms. James’s lawyer at the Notre Dame Legal Aid Clinic. “It’s a very common story.”

Mayor Stephen J. Luecke of South Bend added: “It’s just a crime the way it puts people in limbo. They first off have gone through the grief of losing their house, then they move out and find out that they still own it and have responsibility for it.”


THIS IS WHY PEOPLE ARE ADVISED TO SQUAT UNTIL DRAGGED OUT BY THE SHERRIF.

[ozymandius]

7. How could anyone ever think that slicing and repackaging loans was a good idea?

In Ms. James’s case, the company that was most recently servicing her loan is now defunct. Its parent company filed for bankruptcy and dissolved. And the original bank that sold her the loan said it could not find a record of it.

Never did I ever think that banks and mortgage brokers could behave so stupidly. I mean - there is some certification testing, right? There is some method for weeding out the stupid people?

[Demeter]

12. If There Were, GWB Would Be a Drunk on Skid Row

[sendero]

24. I think the risks were understood..

... but the profits so great that they could not resist.

[rfranklin]

26. They made a shitload of money by selling the CMOs...

and the CDOs and the CDSs. It was a way to skim a few percent off of trillions of dollars in mortgages.

[saigon68]

27. They are living Large

What a bunch of crooks. They are trying to say they couldn't see how the bubble would break.
They all belong in hand-cuffs.

The moral is don't shop lift food-- you will go to jail.

[Joe Chi Minh]

9. The occupiers/former occupiers should be given the title to the property, gratis.

[willing dwarf]

19. If we were a socially minded society

the occupiers would be obliged to pay a small fee, maybe one third of the mortgage, into a fund that could then help other mortgage payers who were falling on hard times...or something like that.

We have such a weird fascination with "hitting the jackpot" in this country. It's great that some people are getting lucky and not needing to leave the houses they are living in, but they could probably pay something back and that would be more fair than throwing in the towel all together.

A local effort to redistribute the wealth and poverty could help a lot of people. Instead we wait for the people most removed from the problem (in DC) to come up with solutions.


Of course, I have no basis for complaint. I have never even been to a school board meeting or township meeting, maybe there are already such efforts underway?

[Hugin]

46. This is the thinking behind my "Economic Recovery Bonds".

:sigh: Yet another of my brilliant ideas which will never see the light of day.

[willing dwarf]

49. Do you have a post on this? It sounds like a great idea.

[Hugin]

50. From the Feb 25th SMW...

Of course, it needs work, but, I covered most of the basics.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=3754939#3755075

[Joe Chi Minh]

113. Unfortunately, I don't think a lot of people there or in the UK have a lot of

disposable income these days. And at the present, the prospects for employment don't look rosy - even as wage-slaves.

[tclambert]

29. Wayne County Sheriff declared a moratorium on throwing people out.

http://www.waynecounty.com/sheriff/newsroom/2009/stop-foreclosure.htm

Sheriff Warren Evans of Wayne County, Michigan (Detroit's county), had this to say on February 2nd:

I cannot in clear conscience allow any more families to lose their home through foreclosure sale until I'm satisfied they have been afforded every option they are entitled to under the law to avoid foreclosure.

There is no way to immediately determine which of the approximately 300-400 homes that come up for sale each week in Wayne County are covered by TARP protections and which are not.

As a Constitutional officer & officer of the court, I have both a legal and moral obligation to make sure that all legal remedies have been exhausted before a homeowner loses their home.

Since homeowners lose their rights to a property once a foreclosure sale is complete, the only fair course of action is to halt the foreclosure sales. As a result, the foreclosure sales that have been held every Wednesday and Thursday are being discontinued.

-----

He was sued a week later by Towne Mortgage Company.

[tclambert]

30. By the way, he was running for mayor at the time.

The mortgage company claimed he was just playing politics.

But he said in an interview, "It's just a vacant house that is going to be scavenged. "The copper is going to be taken. It's going to be a blight in the neighborhood. Common sense would tell me that occupying that house by anybody would be better for the structure than the person not being in it."

http://www.crainsdetroit.com/article/20090202/FREE/902020249

Here's another quote from March 16:

“Had I not taken the unprecedented step of stopping these sales, 3,500 families would have lost their ability to apply to their lenders, or Fannie Mae and Freddie Mac, for relief under the President Obama's Homeowner Affordability and Stability Program,” Evans said. “They would have lost all rights to obtain a mortgage modification to try to keep their homes.”

http://www.co.wayne.mi.us/mygovt/sheriff/newsroom/2009/foreclosure_sales_03-16-09.pdf

[happyslug]

39. Given that In some states (Pennsylvania for one) the statute of Limitation is 21 years

And that 21 years starts at the time you made your last payment, NOT when the loan was formed. Thus if you paid for five years, then lost your job, the bank can wait 21 years before starting any foreclosure procedure. Thus banks have no reason to go forward if it would lose money today, whatever rights the bank has stays safe for the entire 21 year period of non-payment.

In fact the property can be sold for taxes and the mortgage will survive even that sale. i.e. you buy the property at a tax sale,you buy it subject to any mortgage or other lien on that property. Now Pennsylvania has a process known as an "Upset" sale that sells the property free of any liens, but those are rare and often take six months to a year to from start to finish (and then only after the property has gone up for regular Tax sale at least twice in most Counties AND any lien holder MUST be informed of the sale, if possible).

Given that situation, why foreclose on a property you can not sell in the next six months? Just wait till the market returns and foreclose then. This appears to be what banks have decided to do, wait, their rights are preserved under present laws, so just wait and leave any ongoing bills on upkeep of the property fall on the present owners NOT the bank.

[ozymandius]

5. Asia stocks mixed amid gloomy growth forecasts

BANGKOK – Asian markets were mixed Tuesday amid low expectations for the summit of G-20 leaders and gloomy forecasts the region would continue to struggle as the global economy flounders. European markets rose in early trade.

Economic fears weighed on investors as the Asian Development Bank slashed its 2009 growth forecast for the region's developing economies due to plunging exports. Meanwhile, an Australia central banker said the country's economy would shrink this year.

.....

Japan's Nikkei 225 stock average reversed early gains to fall 126.55 points, or 1.5 percent, to 8,109.53, while Hong Kong's Hang Seng was up 119.69, or 0.9 percent, to 13576.02 after diving nearly 5 percent on Monday.

In South Korea, where a central bank survey showed manufacturers were becoming less pessimistic, the Kospi was up 0.7 percent. Mainland China's Shanghai index gained 0.6 percent, Australia's index was down 0.6 percent, while Singapore's index rose 1.7 percent. Markets in New Zealand and the Philippines fell.

European markets were higher in morning trade, with Britain's FTSE 100 up 2.2 percent, Germany's DAX adding 0.9 percent and France's CAC-40 gaining 1.2 percent. Stock futures pointed to modest gains Tuesday on Wall Street. Dow futures rose 60 points, or 0.8 percent, to 7,540 and S&P500 futures gained 6.7, or 0.9 percent, to 791.

http://news.yahoo.com/s/ap/20090331/ap_on_bi_ge/world_markets

[Ghost Dog]

55. Japan Stimulus Plan

TOKYO, March 31 (Reuters) - Japanese Prime Minister Taro Aso was expected to outline a new stimulus plan for the world's second-largest economy later on Tuesday, two days before world leaders gather to discuss ways out of the global crisis.

Rising unemployment and falling spending showed Japan was still stuck in its worst recession in 60 years and underlined the parlous health of the global financial system already buffeted this week by the possible bankruptcy of U.S. automakers.

Tuesday's data from Japan showed a worrying trend for an export-driven economy mired in its worst recession since World War Two and for Aso's unpopular government as a slump in external demand feeds into the domestic economy.

Japanese unemployment hit a three-year high of 4.4 percent, and may be headed above 6 percent, some analysts say, while the number of new jobs sank to a six-year low. At the same time household spending slid 3.5 percent from a year earlier, falling for a 12th month in a row .

The Japanese economy may have hit bottom in the first quarter this year but there may be more bad news to come, analysts said, as well as the political realities of a leader with dismally low popularity ratings ahead of a general election which must be held by October.

"Unlike in the United States, where they had a new and popular administration announcing the measures, Prime Minister Aso is unpopular and many will be expressing scepticism about how effective the economic package will be in propping up the ailing economy," said Naoki Iizuka, senior economist at Mizuho Securities.

The yen slipped to 98.22 per dollar <JPY=> following the unemployment and spending data, while stocks .N225 gave up early gains and ended 1 percent lower as investors awaited more details of the new stimulus package.

Aso was expected to map out his government's third stimulus package, which Japanese media said would run for three years and aim to create 60 trillion yen ($612 billion) worth of demand and 2 million jobs.

The latest plan is part of a broader package Aso wants in place by mid-April to bolster 12 trillion yen of earlier measures, a senior ruling party lawmaker told reporters.

/... http://www.reuters.com/article/marketsNews/idINSP42449820090331?rpc=44&pageNumber=2&virtualBrandChannel=0&sp=true

[Demeter]

6. Mike Whitney: Geithner's Hog-wallow

http://www.buzzflash.com/articles/contributors/1940

The banks have zeroed in on Geithner's cash giveaway bonanza, the "Public Private Investment Partnership" (PPIP), for their next big sting. As expected, Bank of America and Citigroup have angled their way to the front of the herd, thrusting their pig-heads into the public trough and extracting whatever morsels they can find amid a din of gurgling and sucking sounds. Here's the story from the New York Post:

"As Treasury Secretary Tim Geithner orchestrated a plan to help the nation's largest banks purge themselves of toxic mortgage assets, Citigroup and Bank of America have been aggressively scooping up those same securities in the secondary market, sources told The Post...

But the banks' purchase of so-called AAA-rated mortgage-backed securities, including some that use alt-A and option ARM as collateral, is raising eyebrows among even the most seasoned traders. Alt-A and option ARM loans have widely been seen as the next mortgage type to see increases in defaults.

One Wall Street trader told The Post that what's been most puzzling about the purchases is how aggressive both banks have been in their buying, sometimes paying higher prices than competing bidders are willing to pay.

Recently, securities rated AAA have changed hands for roughly 30 cents on the dollar, and most of the buyers have been hedge funds acting opportunistically on a bet that prices will rise over time. However, sources said Citi and BofA have trumped those bids." ("Double Dippers; Citi and B of A buy laundered loans at lower rates," Mark DeCambre, New York Post)

Thus begins the next taxpayer-subsidized feeding frenzy featuring all the usual suspects. The race is on to vacuum up as much toxic mortgage paper as possible so it can be dumped on Uncle Sam at a hefty profit. Nice. These are the same miscreants the Obama Administration is so dead-set on rescuing. It's crazy to help people who use the cover of a financial crisis to fatten their own bottom line. Let them sink and be done with it.

How is it that industry rep Geithner couldn't see that his latest round of corporate welfare would create incentives for the bank scoundrels to game the system again? Naturally, if the government goes into the business of buying crap-loans from teetering financial institutions, the speculators and snake oil salesmen will follow. And so they have. Citi and B of A are just the first to respond to Geithner's pigwhistle. Next will be the hedgies and the Private Equity porkers, all nuzzling up to the Treasury's burgeoning feed bin hoping to sink their teeth into whatever tasty nuggets bob to the top of the trough.

OINK

Geithner's plan is a disaster from the get-go. It jacks up the price of garbage assets, rewards the misallocation of capital, invites rampant fraud, and prolongs the recession. Worst of all, it transforms the FDIC into a hedge fund putting individual bank deposits at greater risk. Economist Jeffrey Sachs sums up Geithner's "public-private" boondoggle in his article "Will Geithner and Summers suceed in raiding the FDIC and Fed?":

"Geithner and Summers have now announced their plan to raid the Federal Deposit Insurance Corporation (FDIC) and Federal Reserve (Fed) to subsidize investors to buy toxic assets from the banks at inflated prices. If carried out, the result will be a massive transfer of wealth -- of perhaps hundreds of billions of dollars -- to bank shareholders from the taxpayers (who will absorb losses at the FDIC and Fed)...

The FDIC is lending money at a low interest rate and on a non-recourse basis even though the FDIC is likely to experience a massive default on its loans to the investment funds.... In essence, the FDIC is transferring hundreds of billions of dollars of taxpayer wealth to the banks... The public will not accept overpaying for the toxic assets at taxpayers' expense. Thus, it is very likely that the Administration will attempt to avoid Congressional oversight of the plan, and to count on confusion and the evident "good news" of soaring stock market prices to justify their actions. ....

Other parts of the plan support subsidized loans from the Treasury and, even more, from the Fed. The Fed is already buying up hundreds of billions of dollars of toxic assets with little if any oversight or offsetting appropriations. Since the Federal Reserve profits and losses eventually show up on the budget, the Fed's purchases of toxic assets also should fall under the Federal Credit Reform Act and should be explicitly budgeted. ("Will Geithner and Summers suceed in raiding the FDIC and Fed?", Jeffrey Sachs, Huffington Post)

As Sachs points out, the Fed's liabilities will eventually be shifted onto the taxpayer. But that hasn't stopped Bernanke from writing checks on an account that is overdrawn by $11 trillion. Nor has it compelled Geithner to seek Congressional authorization before he leverages the FDIC up to its eyeballs. These decisions are all being made by a small coterie of bank loyalists who operate independent of any oversight or government supervision. They do what's best for their constituents and let the chips fall where they may.

Earlier this week, Geithner asked Congress for additional powers to take over insolvent non-bank financial institutions. According to The Washington Post:

"The Obama administration is considering asking Congress to give the Treasury secretary unprecedented powers to initiate the seizure of non-bank financial companies, such as large insurers, investment firms and hedge funds, whose collapse would damage the broader economy, according to an administration document."

Geithner must think he's a shoe-in for the new "systemic regulator" post because of the exemplary way he handled the AIG bonus scandal.

Of course, in the bizarro world of Washington -- where failure typically catapults one to higher office -- it's only logical that Geithner would be elevated to Uber-Regulator, not only controlling the public purse, but also using his own peerless grasp of the marketplace to decide which institutions pose a systemic risk and need to be sidelined, and which need stepped-up government support via limitless capital injections (aka "Freebies").

Prediction: If Geithner is granted these special powers by the brain-dead Congress, the country will undergo the greatest period of bank consolidation in its 230-year history. This is a blatant power grab by a shifty character who has risen to his present pay-grade by nosing his way up the political stepladder. Congress had better get its act together and put an end to this nonsense or the nation will continue its fast-paced metamorphosis into a feudal oligarchy run by the Bank Mafia and Wall Street racketeers. The first step is to give Geithner, Summers and any other of the Rubin-clones a full-body bacon-rub followed by a few brisk dunks in the shark tank. Then, hose down the Treasury and bring in a whole new team.

Nobel Prize winning economist Joseph Stiglitz summed up Geithner's "public-private" fiasco like this:

"Quite frankly, this amounts to robbery of the American people. I don't think it's going to work because I think there'll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer."

Geithner's gotta go. Pronto.

[ozymandius]

8. Chrysler and Fiat tie-up faces tough road to reality

MILAN/DETROIT (Reuters) – Fiat (FIA.MI) and Chrysler have a framework for an alliance and a U.S. government blessing and now must race to tie up crucial agreements with debt holders and unions to make it a reality.

Nothing less than Chrysler's future is at stake, with a targeted bankruptcy for the No. 3 U.S. automaker a clear risk after a 30-day deadline for new federal funding has passed.

One possible bankruptcy scenario being discussed would have Chrysler's "good" assets sold off to Fiat, a person familiar with the discussions said on Monday.

.....

Fiat has not been required to contribute cash or assume debt to partner with Chrysler, but the U.S. automaker has said the contributions of small car technology and other benefits would be worth up to $10 billion to Chrysler.

It also has agreed to repay U.S. taxpayers before Fiat could take majority control of Chrysler, officials said. The earlier plan had no such bar to Fiat raising its stake.

http://news.yahoo.com/s/nm/20090331/bs_nm/us_chrysler_fiat

[Demeter]

13. It's a Nightmare

If there is a popular uprising coming, it may well start in Michigan. People cannot believe what they see happening.

I am beginning to wonder if this isn't retribution for Clinton supporters in House and Senate and Governorships--which is stupid since Mich. governor is term-limited.

[tclambert]

32. Fiat gets to sell cars in America again.

They stopped in 1982. They've wanted to get back into the American market, but building a dealership network from scratch is daunting. Pairing up with Chrysler gets them access to Chrysler's dealers. That's a big bonus for Fiat. Chrysler gets to sell Fiats, Alfa Romeos, and FERRARIs! That could bring more customers into Chrysler dealerships. Fiat has quite a line-up of tiny, fuel-efficient cars. Just the technology Chrysler has lacked.

Now, will Americans buy them? Everybody says they want small, efficient cars. What they say and what they do, well . . . sometimes the twain don't meet.

[Hugin]

41. I had heard Hyundai has a hankering...

for the "Jeep" brand.

It just kills me to think something as Mom/Apple Pie/American Flag as "Jeep" will now be associated with Fiat!

Cripes!

Another thing which I find interesting about this whole Car Deal is that EXACTLY the same talking points are coming out as during the AMC failure...

Except, this time they're saying, "We can't afford 3 companies" instead of four.

This is Union Busting pure and simple.

[Demeter]

10. It's a bird...It's a plane...No, it's Spitzer to the Rescue By Mike Whitney

http://informationclearinghouse.info/article22312.htm

March 30, 2009 "Information Clearing House" --- -If Obama is serious about restoring confidence in the markets, he should replace current SEC chief Mary Schapiro with Eliot Spitzer. That would send a message to the world that the president is through messing around. Schapiro is another Wall Street toady who believes that the markets can regulate themselves. As the head of the Financial Industry Regulatory Authority, or Finra, she stood by while the financial giants increased their leverage to unsustainable levels and spread their derivatives-contagion to every part of the system. Schapiro also missed the Madoff scandal, the auction-rate bond fraud, the blow up at Lehman Brothers, and the mortgage meltdown. She was blindsided at every turn. Her dismal performance as a private-sector regulator proves that she's the wrong person for the job. Even the far-right Wall Street Journal has lambasted Schapiro. In an article titled "Obama's pick to head SEC has record of being a Regulator with a Light Touch" the WSJ relays this revealing anecdote:

"The Financial Services Institute, a trade group, was meeting, and Ms. Schapiro addressed the crowd about Finra's efforts to fight frauds aimed at senior citizens. Frank Congemi, a financial adviser, asked what Finra was doing to regulate "packaged products" such as complex mortgage securities. Mr. Congemi says that Ms. Schapiro replied: "We have rating agencies that rate them." The credit-rating agencies, by this time, were being heavily criticized for having given triple-A ratings to mortgage bonds that became unsalable as foreclosures rose.

Mr. Congemi says that at the May 7 meeting he retorted: "What is that going to do to markets and people's trust when these things go to zero?" He says Ms. Schapiro replied that she couldn't answer hypothetical questions." (Wall Street Journal, Obama's pick to head SEC has record of being a Regulator with a Light Touch")

This story sums up Schapiro's laissez faire attitude perfectly; plenty of posturing and rhetoric with zero enforcement, another empty gourd. She's doomed to follow in the footsteps of her feckless predecessor, Christopher Cox, who stuck his head in the sand while the 5 biggest investment banks levered up to 30 to 1 and brought the whole global house of cards crashing to earth. Schapiro will undoubtedly torpedo any effort to police the markets or to bring charges against any of the Wall Street Godfathers.


And what is the SEC up to now? Where are the regulators and what steps have been taken to clean up Wall Street?

Nothing. Just more blabbering. Obama hasn't changed a thing. Treasury is full of bank loyalists and the SEC is loaded with brokerage-friendly flunkies. The only difference is that the SEC's rubber stamp has been passed from laughingstock Cox to lapdog Schapiro. Other than that, it's business as usual.

If Spitzer was running the SEC, the Pinkertons would be swarming the investments houses right now, thumbing through the off-balance sheet paperwork, overturning filing cabinets and tasering bloated banksters as they scuttle away clutching their Armani briefcases stuffed with taxpayer loot.

The public is not in the mood for any more lame excuses or windy oratory from President Inspiration. Just get on with it. Governing is more than just gliding from one teleprompter to the next pointing at rainbows and promising Utopia. There has to be action, accountability, and justice.

What people want is to see a truncheon-wielding cop on every corner of lower Manhattan. They want regulators snooping through e mails and digging through trash cans to uncover any scrap of evidence that will build a case for investor fraud or criminal malfeasance. They want Spitzer-clones--armed with bullwhips and billy-clubs--posted in every boardroom, in every penthouse, on every private jet; breathing down the necks of every CEO, every CFO, and every dodgy, derivatives-peddling scam-artist until the financial typhoon subsides and the culprits, cutthroats and carpetbaggers are dragged in leg-irons to Guantanamo for a few brief dunks on Dick Cheney's waterboard.

This is not the time for namby-pamby, weak-kneed Schapiro. Eliot Spitzer has a proven record of taking on the industry behemoths and organized crime. (He launched an investigation that brought down the Gambino family's control over Manhattan's garment and trucking industries) He's devoted himself to consumer and environmental protection, while taking aim at white collar crime and securities fraud. Until he stepped down, he'd been doing a bang-up job reigning in reckless speculators, predatory lenders, and Wall Street kingpins. He's a bulldog, a corporate dragon-slayer, and the best man for the job. Spitzer's heavy-handed tactics made him big business's most hated man. In fact, in January 2005, the president of the US Chamber of Commerce described Spitzer's approach as "the most egregious and unacceptable form of intimidation we've seen in this country in modern times."

If that isn't a ringing endorsement for SEC chief, than what is?

SPITZER'S HOOKERGATE

In March 2008, Spitzer resigned as Governor of New York when he was caught with a high-priced prostitute named Ashley Dupre. The story made headlines across the country. Spitzer accepted full responsibility for his conduct and did not challenge the allegations even though the information was gathered via a federal wiretap.

The Spitzer case brings up some unsettling questions about Bush's surveillance programs; mainly whether they are really being used to investigate potential terrorists or simply a means of destroying political enemies. Spitzer made a name for himself by sticking it to bigshot business tycoons and Wall Street kleptocrats, the very type of people who fill out Bush's campaign donor list. That's why many people believe that the Bush Justice Department was simply carrying out a vendetta on behalf of Spitzer's many powerful enemies.

Just days before the scandal broke, the Washington Post published an article by Spitzer which linked the Bush administration to the mortgage fiasco. He showed how Bush had blocked all efforts to save loan applicants from being fleeced by mortgage lenders. Spitzer was joined by many other state attorneys general who noticed early on that predatory lending was on the rise and that there was a concerted effort to keep the mortgage swindle going whether applicants had the ability to make their payments or not.

Elliot Spitzer op-ed in the Washington Post:

"Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye....

In 2003, during the height of the predatory lending crisis, the Office of the Comptroller of the Currency (OCC) invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative. The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks. The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks. In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.
Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect. The curbs we sought... would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably. The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits. So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers." (Elliot Spitzer, “Predator Lenders’ Partner in Crime" Washington Post)

If the allegations are true, then the Bush administration was directly and maliciously involved in duping thousands, if not millions, of credulous borrowers into fraudulent loans. Surely, this is a matter that requires congressional investigation. Journalist Greg Palast sums it up like this:


"Spitzer not only took on Countrywide, he took on their predatory enablers in the investment banking community. Behind Countrywide was the Mother Shark, its founder and now owner, Bank of America. Others joined the sharkfest: Goldman Sachs, Merrill Lynch and Citigroup’s Citibank made mortgage usury their major profit centers.....But there were rumblings that the party would soon be over...

The big players knew that unless Spitzer was taken out, he would create enough ruckus to spoil the party. Headlines in the financial press – one was “Wall Street Declares War on Spitzer” - made clear to Bush’s enforcers at Justice who their number one target should be. And it wasn’t Bin Laden.("Eliot's Mess", Greg Palast)

Spitzer gave his enemies all the ammo they needed to put him away for good, and they took full advantage of it. No one expected that he would pop up just a year later.


Last Sunday, Spitzer was interviewed on Fareed Zakaria's GPS on CNN. The ex-Gov showed a better grasp of the details of the financial situation than of any of the 535 members of Congress. Spitzer understands the problems and knows what needs to be done to fix them. Here's a small part of the interview:

Fareed Zakaria: What made you look at AIG and say something is wrong here?

Eliot Spitzer: Their fundamental accounting structure was wrong, and when we prosecuted them we brought a case that they had allegedly manufactured fictitious reinsurance contracts designed to create the appearance of capital on the books which was not there and this was was a structure that had been designed and orchestrated at the very top of the company.

Fareed Zakaria: So they were basically fudging the numbers to make it look like they had a stronger balance sheet than they actually had?

Spitzer: Precisely. That is exactly right. The underlying effort was to create the illusion of financial strength that was not actually there. And as we dug more deeply into the underlying structure and organization and accounting that was ongoing at the company we knew there was a problem. Four people have been convicted in this and the former CEO was called an unindicted co-conspirator in the federal courtroom by the federal prosecutor. So, this was a fundamental effort to alter the facts and lie to the public."


AIG CENTER OF THE WEB

ZAKARIA: So, do you think the problems that AIG got into later on stemmed from some of the same practices that you were trying to get at?

SPITZER: They stemmed from an effort at the very to to gin up returns whenever, wherever possible, and to push the boundaries in a way that would garner returns almost regardless of risk. Back then, I told people that AIG is at the center of the web. The financial tentacles of this company stretched to every major investment bank. The web between AIG and Goldman Sachs is something that should be pursued. And as I've written...

Consider what Spitzer is saying; that the lumbering Goliath, AIG, is at the very center of the gigantic derivatives fraud which took trillion of dollars of undercapitalized credit default swaps (CDS) and sold them (as insurance) to myriad other financial institutions to help them maintain artificially high ratings on complex securities whose real value was always in doubt since the underlying collateral was connected to uncreditworthy borrowers who were more likely to default or go into foreclosure. Whew! These CDS are the paper claims to fictive wealth which greatly inflated the world's biggest speculative bubble. These unregulated swaps are the tissue that holds together the failing shadow banking system which both Geithner and Bernanke are committed to preserve. Spitzer understands how this complex system works and what it will take to bring it under control. This alone should put him at the top of the list of candidates for the SEC.

If the Obama team was serious about defending the little guy and restoring confidence in the markets, then Spitzer would be the logical choice, warts and all. But since the real objective appears to be keeping the same basic power-structure in place at all costs; the present course will do just fine. One unmistakable sign of imperial decline is the inability to make critical changes when the country's future depends on it.

[radfringe]

23. ...couldn't resist

[Demeter]

62. You Get Today's Cuteness Award

Thanks, I NEEDED that!

[ozymandius]

11. OECD sees bleak global outlook, soaring job losses

PARIS (Reuters) – The world economy will shrink at a far faster pace than originally expected this year, sending unemployment soaring and highlighting the need for extra steps to halt the crisis, the OECD said on Tuesday.

The 30-nation Organization for Economic Co-Operation and Development (OECD) said member economies would contract -4.3 percent this year. That was sharply down from the last forecast of -0.4 percent, made in November.

....

The OECD report said that "risks remain firmly tilted to the downside" with the largest danger that of the weakening economy further undermining the health of financial institutions, forcing them to curtail lending beyond what is anticipated.

The recession will lead to a sharp rise in unemployment, with a peak in 2010 or early 2011 and many countries reaching double digit levels for the first time since the early 1990s.

http://news.yahoo.com/s/nm/20090331/ts_nm/us_oecd_forecasts

[ozymandius]

14. GM Must Quickly ‘Do More’ as Bankruptcy Threat Grows (Update1)

March 31 (Bloomberg) -- General Motors Corp. faces a structured bankruptcy managed by the U.S. government if the company can’t meet a deadline to drastically reduce debt in the next 60 days.

GM Chief Executive Officer Fritz Henderson, on his second day running the largest U.S. automaker, said yesterday that a strategic bankruptcy with government backing is less risky than traditional Chapter 11 protection, though it’s still not GM’s preferred method of survival.

.....

If GM entered bankruptcy, it would probably work to create a new company containing its best brands, and find a buyer, while sloughing off liabilities, said a person advising GM who declined to be named because the talks about proposals GM will take to the government are private.

The marketing of the new GM could take months, and creditors would be fighting for their share in the company, prolonging the bankruptcy, the person said.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a1Fq6HpfvYAI&refer=home

[Demeter]

16. Remember The Black Knight in Monty Python's "Search for the Holy Grail"?

http://www.youtube.com/watch?v=2eMkth8FWno

Why does it feel like we are living through this on a daily basis?

[ozymandius]

17. "Milton Friedman ALWAYS triumphs!!!"

I would love to see a dubbed voiceover of that video.

[Karenina]

77. Ozy, quick question you can probably answer off the top

What percentage of the U.S. GDP is FIRE?

[ozymandius]

95. Fire?

Please explain.

[Tansy_Gold]

97. Finance, Insurance, Real Estate. n/t

.

[ozymandius]

99. Thanks Tansy.

Off the top of my head - I do not know because these three items traverse different segments of GDP. As a reminder, GDP is comprised of four categories: Consumer Spending; Investment; Government Spending and Net Exports. Since these four spending areas fluctuate it's difficult for someone like myself to grasp what Finance, Insurance and Real Estate represent. I'm sorry that I cannot provide a clearer answer.

[Tansy_Gold]

102. You're welcome. I learned it from kevin phillips.

There may be something in his book "Bad Money" about how much FIRE is of GDP. I borrowed it, so I can't look it up, but if anyone has the book, check there.

TG

[Demeter]

104. Some Economists Were Saying

that traditionally Finance was 3% of GFP, and then with the Greenspan bubbles, it got to 8% or more...I will look for the quote, as my memory is a sometime thing...

I suppose the Alphabet securities are technically insurance, so they went from nearly nothing to how many trillion world-wide?

And the real estate bubble...well, put together FIRE probably accounted for the half of the paper assets that have disappeared so far...

[Tansy_Gold]

107. Quote from Phillips via wikipedia, etc.

http://en.wikipedia.org/wiki/Kevin_Phillips_(political_commentator)


From American Theocracy (which was the basis for Bad Money)

the underlying Washington strategy… was less to give ordinary Americans direct sums than to create a low-interest-rate boom in real estate, thereby raising the percentage of American home ownership, ballooning the prices of homes, and allowing householders to take out some of that increase through low-cost refinancing. This triple play created new wealth to take the place of that destroyed in the 2000-2002 stock-market crash and simultaneously raised consumer confidence.

Nothing similar had ever been engineered before. Instead of a recovery orchestrated by Congress and the White House and aimed at the middle- and bottom-income segments, this one was directed by an appointed central banker, a man whose principal responsibility was to the banking system. His relief, targeted on financial assets and real estate, was principally achieved by monetary stimulus. This in itself confirmed the massive realignment of preferences and priorities within the American system….

Likewise huge and indisputable but almost never discussed were the powerful political economics lurking behind the stimulus: the massive rate-cut-driven post-2000 bailout of the FIRE (finance, insurance, and real estate) sector, with its ever-climbing share of GDP and proximity to power. No longer would Washington concentrate stimulus on wages or public-works employment. The Fed's policies, however shrewd, were not rooted in an abstraction of the national interest but in pursuit of its statutory mandate to protect the U.S. banking and payments system, now inseparable from the broadly defined financial-services sector.

from a couple of reviews of Bad Money from Amazon:

In the last 30 years financial services have grown from 11% of GDP to 21%, and manufacturing has declined from 25% to 13%. A reversal of roles that Phillips sees as very unhealthy. /

and

Phillips points out that over the last 30 years, financial services have nearly doubled to a record 20% of GDP (and an even greater share of corporate profits - 54% in '04), while manufacturing's share has halved to 13% (10% of profits), greatly imperiling the economy

Just FYI


TG

[Karenina]

111. Thank you all!

This helps a lot. The Phillips citation was what I was searching for! :loveya:

[Karenina]

112. I found another part of what I was looking for

coming out of David Schuster's mouth last night. 0:20-0:35 http://www.youtube.com/watch?v=4P1tGzTSjhU
That 40% "business profits" figure that my debate partner insisted was NOT POSSIBLE; my mind had seized an imprecise acronym to describe it. All the alphabet soup has me so tangled up in red...

[ozymandius]

18. The End of the GM Hummer on Tuesday?

From Calculated Risk

From the NY Times: A Dealer’s Big Bet Is on the Line as the Hummer Falls From Favor

Sales of Hummers over all have fallen so far — 51 percent last year, the worst drop in the industry — that General Motors is trying to find a buyer for the brand. Without one, the company might close Hummer. An announcement about Hummer’s fate may be made Tuesday.

“It’s a brand that represents a lot of what people want to get away from,” said Rebecca Lindland, an analyst with the research firm I.H.S. Global Insight.
...
If Hummer is closed, it would be phased out “rather quickly,” G.M.’s president, Frederick A. Henderson, said last month.

And from: Humbling a Giant

For too long, (GM) sold too many models, under too many brands, in too many markets — with too few customers.
...
The task force ... said Monday that G.M. had to drastically pare the broadest lineup of products offered by any car company.

There is much more in the 2nd article about the downsizing of GM. The Hummer will probably be history tomorrow today.

more at Calculated Risk link...

[DemReadingDU]

25. Why not the banks?

It's like the auto industry is being destroyed, in order to send more of our tax dollars to the banks.

[tclambert]

33. Meanwhile, in a parallel universe . . .

President Obama's economic advisers, all former auto company executives, drew criticism for recommending continued bailouts for auto companies, while pushing for investment banks to go into bankruptcy.

[tclambert]

36. The GM situation confuses me. A few weeks ago, I thought I understood it,

and it didn't seem that bad. It looked like one of two things might happen: 1) GM struggles through this recession, surviving with a little help from the government, and finds itself in great position to capitalize on the inevitable boom market in autos during the recovery. 2) GM files for Chapter 11 bankruptcy, goes through a painful reorganization, but emerges from Chapter 11 in the usual three years leaner and stronger, and ready to capitalize on the boom in the auto market then taking place.

The coming boom in the auto market is a certainty. We need to replace cars at the rate of about 13 to 14 million per year. They're on pace to sell only 9 million this year. After the recession ends, we'll likely see some 15 to 16 million car sale years. Any surviving auto company should do very well in that market. GM has some promising cars in its development pipeline. In two or three years that should bear fruit.

The big variable in that scenario is when the recession ends. Sooner is better, obviously. Two to 2 1/2 more years would be bad, and GM would have trouble surviving that. But any car company that does survive, that finds a way to at least break even in such a disastrous recession, would be poised to prosper hugely when the boom comes.

What confuses me now has to do with the rumors of the government forcing GM into some sort of new double secret form of bankruptcy, the rules of which they are only beginning to make up now. Specifically, what happens to GM's current stockholders? Millions of them. Mostly innocent. Will they be cut off completely, lose their investments? Will they be forced to sell at current depressed prices to new buyers? If the new owners turn out to be Citigroup, AIG, BoA, etc., I will be somewhat disappointed. (Is there a smiley for massive understatement?)

[Hugin]

45. "If the new owners turn out to be Citigroup, AIG, BoA, etc., I will be somewhat disappointed."

With Timmeh and Summers in there... You can 'Bank' on it.

Add Goldman Sachs to the list and it's a sure thing.

[tclambert]

58. Right, I forgot Goldman Sachs.

My nightmare scenario: Instead of temporarily nationalizing the banks, the government temporarily nationalizes GM, cuts off current shareholders, including retirees and pension plans, dissolves Saturn and Hummer, and sells off the Chevy-Cadillac operation to a consortium of big investors--Bernie Madoff, R. Allen Stanford, the Carlyle Group, and Richard Bruce Cheney.

[Demeter]

89. You Know What They Say: Reorganize in Haste, Repent in Leisure

or something like that.

[Demeter]

15. Obama’s Attack on the Middle Class By Paul Craig Roberts

http://informationclearinghouse.info/article22313.htm

...In the United States, government has become expert at manipulating both left-wing and right-wing ideologies. It keeps those on both ends of the spectrum set at each other’s throats in order to ensure the government’s continuing independence from accountability.

Historically, the definition of a free person is a person who owns his own labor. Serfs were not free, because they owed their feudal lords, the government of that time, a maximum of one-third of their labor. Nineteenth century slaves were not free, because their owners could expropriate 50% of their labor.

Today, no American is a free person. The lowest tax rate, not counting state income, property tax and sales tax, is 15% Social Security tax and 15% federal income tax. The “free American” starts off with a 30% tax rate, the position of a medieval serf.

In medieval Europe, when tax rates reached beyond 30%, serfs rebelled and killed their masters.

[Hugin]

47. As I write my check to pay my taxes, I shall think of this article.

:cry:

[Dr.Phool]

61. I'm writing one myself today.

Do I make it out to AIG or Goldman Sachs?

I'm so damned tempted not to write it at all. The only problem is, my wife would shoot my ass for losing the house.

[AnneD]

71. I gleaned this juicy thought from the same article....

"In the United States, government has become expert at manipulating both left-wing and right-wing ideologies. It keeps those on both ends of the spectrum set at each other’s throats in order to ensure the government’s continuing independence from accountability."

more......

Often I say that M$M is like a cat watching the wrong mousehole....For the middle class in America.... this is the CORRECT mouse hole we need to watch and eventually folks will piece it together. We are being divided for a reason. If folks in this country were scaled by political persuasion-ie would be a bell curve. Discard the far right and left nut jobs and you have a nice big batch of middle ground. Once this middle ground discovers this ruse-the party is over for most of these con men in power.

[Demeter]

20. Did Goldman Goose Oil?

http://www.forbes.com/forbes/2009/0413/096-sachs-semgroup-goldman-goose-oil.html

How Goldman Sachs was at the center of the oil trading fiasco that bankrupted pipeline giant Semgroup.

When oil prices spiked last summer to $147 a barrel, the biggest corporate casualty was oil pipeline giant Semgroup Holdings, a $14 billion (sales) private firm in Tulsa, Okla. It had racked up $2.4 billion in trading losses betting that oil prices would go down, including $290 million in accounts personally managed by then chief executive Thomas Kivisto. Its short positions amounted to the equivalent of 20% of the nation's crude oil inventories. With the credit crunch eliminating any hope of meeting a $500 million margin call, Semgroup filed for bankruptcy on July 22.

But now some of the people involved in cleaning up the financial mess are suggesting that Semgroup's collapse was more than just bad judgment and worse timing. There is evidence of a malevolent hand at work: oil price manipulation by traders orchestrating a short squeeze to push up the price of West Texas Intermediate crude to the point that it would generate fatal losses in Semgroup's accounts.

"What transpired at Semgroup was no less than a $500 billion fraud on the people of the world," says John Catsimatidis, the billionaire grocer turned oil refiner who is attempting to reorganize Semgroup in bankruptcy court. The $500 billion is how much the world would have overpaid for crude had a successful scam pushed up oil prices by $50 a barrel for 100 days.

What's the evidence of this? Much is circumstantial. Proving oil-trading manipulation is difficult. But numerous people familiar with the events insist that Citibank, Merrill Lynch and especially Goldman Sachs had knowledge about Semgroup's trading positions from their vetting of an ill-fated $1.5 billion private placement deal last spring. "Nothing's been proven, but if somebody has your book and knows every trade, it would not be difficult to bet against that book and put the company into a tremendous liquidity squeeze," says John Tucker, who is representing Kivisto.

What's known for sure is that Goldman Sachs, through J. Aron & Co., its commodities trading arm, was in prime position to use such data--and profited handsomely from Semgroup's fall. J. Aron was Semgroup's biggest counterparty, trading both physical oil flowing through pipelines and paper oil, in the form of options and futures.

When crude oil peaked in July, Semgroup ran out of cash to meet margin requirements on options contracts it had with Aron, contracts on which it had paper losses of $350 million. Desperate to survive, Semgroup asked Aron to pony up $430 million it owed on physical oil. Aron said no, declared Semgroup in default on its contracts and demanded immediate payment of losses.

Some answers may emerge in late March when former FBI director Louis Freeh releases a report on the trading surrounding Semgroup's demise. He was hired by Semgroup and given subpoena power by the bankruptcy court judge in Delaware. Meanwhile the Securities & Exchange Commission is investigating, and lawyers involved in the bankruptcy say that Manhattan District Attorney Robert Morgenthau's office is looking into the actions of New York firms in the collapse. His office declines to comment.

THERE'S MORE....IF YOU CAN STOMACH IT...AT LINK

[Hugin]

52. Wow, I knew something was up.

Goldman Sachs... Now why wouldn't I have ever suspected them? :eyes:

[Demeter]

21. Populism: Will there be blood?

I'M BEGINNING TO THINK THERE HAS TO BE--I JUST WANT TO BE SURE THE RIGHT BLOOD GETS SPILLED!

http://www.economist.com/world/unitedstates/displayStory.cfm?story_id=13375986&source=hptextfeature


The revival of American populism is partly synthetic, but mostly real

A WEEK or so ago America was seized by a spasm of fury over the bonuses paid to executives at AIG, a troubled insurance company. Across the country Americans were enraged that people who had helped to cause the financial meltdown were being rewarded for their incompetence. And Washington responded in kind.

Congressmen queued up before the television cameras to tell everybody how upset they were. Larry Summers, the president’s chief economic adviser, described the bonuses as “outrageous”. Even Barack Obama tried to drop his ultra-cool persona to say how “angry” he was. The House voted overwhelmingly to impose a 90% tax on such bonuses.

The media responded to the storm of outrage by producing a stream of articles on American populism—the political disposition that damns established institutions, from Wall Street to Washington, and tries to return power to “the people”. Newsweek devoted almost an entire issue to the subject.

But no sooner was the ink dry on these articles than the populist storm seemed to blow itself out. Many of the journalists who had been fanning the flames of anger attended a white-tie Gridiron Dinner in Washington on March 21st to perform silly song-and-dance routines. Wall Street rallied two days later when the treasury secretary, Tim Geithner, published his plan to tackle toxic assets held by banks. Steny Hoyer, the House majority leader, suggests that bonus legislation “may not be necessary” now that 15 of the top 20 “bonus babies” at AIG have agreed to give their bonuses back.

Was the fuss over AIG a sign of a new populist mood in America? Or was it just a storm in a teacup? It is hard to answer this question in a country in which anger is a form of entertainment and where the political parties have turned partisanship into a fine art. Television personalities such as Bill O’Reilly are always angry about something or other. Many of the politicians who proclaimed their outrage at the “malefactors of great wealth” are delighted to take campaign contributions from the very same malefactors.

But, for all that, there are good reasons for taking the resurgence of populism seriously. One is the breadth of the discontent in the country. Left-wingers complain that Mr Obama is selling out his supporters in order to rescue irresponsible financial institutions. Right-wingers worry that he is using taxpayers’ money to save people from the consequences of their own profligacy. This fear has plenty of resonance outside the world of political enthusiasts: a recent Harris poll shows that 85% of Americans believe that big companies have too much influence on politicians and policymakers.

Another factor is the size of the slump. America has lost almost 2m jobs in the past three months. The number of job openings is down 31% from a year ago. Consumer confidence is falling on all fronts. Mortgage delinquencies are at a record high. The future of attempts to stimulate the global economy is also in jeopardy: European leaders have implied that they will oppose pressure from Americans and Chinese to produce their own stimulus programme at the forthcoming G20 meeting.

America may be witnessing the return of an old-fashioned version of populism, driven by economic anxiety and directed at economic interests. The people who gave the name to “populism” in the late 19th and early 20th centuries were worried about a prolonged agricultural depression and furious at the vested interests in Wall Street and Washington who, they thought, were responsible for that depression. Populists accused the elites of turning America into a land of “tramps and millionaires”.

This brand of populism went underground during the boom years, but Franklin Roosevelt revived it during the Depression. In one of his most passionate speeches, in 1936, he attacked the “economic royalists” of big business and the Republican Party.

In the 1960s economic populism was trumped by cultural populism. The Republican Party championed the interests of the “silent majority” against bra-burning feminists, civil-rights activists and effete liberals who were more interested in protecting the rights of criminals than preserving law and order. The Democrats made desultory attempts to revive economic populism in 2000 and in 2004: Al Gore campaigned for “the people against the powerful” and John Kerry denounced outsourcing companies. But this proved to be no match for the Republicans’ cultural populism. Now economic populism is returning to the heart of American politics.

This economic populism is made particularly potent by the long-term decline of faith in American institutions. The General Social Survey has been polling Americans about their confidence in major institutions (among other things) since 1972. The preliminary data for 2008 show a marked drop in confidence in every American institution since 2000 except military ones and education. The proportion of people expressing “a great deal of confidence” fell from 30% in 2000 to 16% in 2008 for big business, from 30% to 19% for banks, from 29% to 20% for organised religion, from 14% to 11% for the executive branch and from 13% to 11% for Congress. It was up, to 52%, for the armed services. These figures are the stuff that nasty movements are made of.

Populism poses serious problems for both political parties, not least because the very institutions which they spend their lives squabbling over are some of the least respected in the country, just above television and the press. The danger for Mr Obama and the ruling Democrats is that the administration is relying heavily on private investors and Wall Street banks to implement its various rescue plans. This inevitably means rewarding some of the people who were responsible for the crisis. The president hopes that his budget will channel destructive anger into support for his policies. But he could also find his administration blown off-course or even swept aside by popular outrage.

[paparush]

59. See the DailyKos article - The Coming Wingnut Revolution

http://tinyurl.com/dd3mlm

[Dr.Phool]

64. Damn, that story line reads just like this season's "24".

A big home-made mercenary army, losing it's contracts, and starting a revolution.

[bain_sidhe]

83. How about a real URL?

I can't access tinyurl links because my spyware program thinks it's a spyware site, and I can't find it on dKOS.

[paparush]

108. Here you go..

http://www.dailykos.com/storyonly/2009/3/30/714583/-The-Impending-Perfect-Wingnut-Hate-Storm

[Demeter]

22. Your Humble Blogger Had a Naive Moment / Ives Smith

http://www.nakedcapitalism.com/2009/03/your-humble-blogger-had-naive-moment.html

Even though I pride myself on being a constitutional cynic, truth be told even I harbor a wee bit of optimism. For instance, even thought I regularly write about how Things Are Going to Hell, Fast, I privately assume I am a pessimist and maybe a bit of a crank too, so things might not really be as bad as I think they are. Then real grownups who've seen Bad Stuff at close range confirm my worst views, so I know things really are dire. Darn.

I had naively assumed that the goosing of government stats practiced by the Bushies might abate, at least temporarily, with Team Obama in charge (I'll confess I got tired of watching the non-farm payrolls birth/death adjustments and the like, and figured I'd leave it for the hard core investment oriented sites like the Big Picture).

But I thought for at least the first year of so of the new Administration we might get more or less truthful government stats (well as truthful as they can be, given the limitations and quirks of their data gathering and models). Why?

Obama has everything to gain by making the economy look like a basket case now. The first six months or so of results can be attributed to Bush. The worse things look, the more impetus for heroic measures, and the lower the baseline against which improvement can be measured.

But weirdly, the Obama crowd (I assume they are nudging the statistician/beancounters) is releasing figures with Bush-beating "seasonal" adjustments that make results look better! If I were in their place, I'd want the numbers tweaked to look grimmer than reality.

[Pale Blue Dot]

28. Obama is turning in to a tragedy of Shakespearian proportions.

I honestly believe that he is a good and brilliant person with the same fatal flaw that infects our entire country right now: massive cognitive dissonance. His eternal optimism and "hope" are blinding him to the punishing realities. He, like the rest of America, will not see what's gone wrong until it's far too late.

If he had been elected in the 80's, he may have gone down as one of our greatest presidents. Now, however, he is the right man elected at the wrong time. Books, plays, and movies will be produced about him long after he's gone - but none of them will have a happy ending.

This sucks.

[DemReadingDU]

35. I think so too

I would like to think that when the crash happens, and it will, that Obama will stop listening to the banksters for more bailouts, and instead use the money to help feed and shelter the people. Otherwise, he will be looking at riots and being a one-term president.

[AnneD]

48. Morning Marketeers.....

:donut: and lurkers. My hubbies friend and band mate is very astute politically and has a tendency to call these things early and accurately. In the last election cycle I remember him saying that-"make no mistake-there is a populist movement afoot. The Dem's and Obama will ride it into the White House -but they better be careful. It isn't about them-it's about change. They will be swept out as easily as they were swept in because they can't control this wave." Now this guy has for years gone to the state Dem convention and is a shrewed judge of folks and their character. He was/is a Dean Kucinich person and tends to run way ahead of the curve. So what we have here is a powder keg waiting for a spark.

The fact that Obama was even elected speaks to the desperation that folks have in their desire for change. Many were hoping he was the spark we could rally around. Now, here in Texas we have a saying "You need to dance with who brung you to the ball"-and Barack seems to be forgetting that simple message. Yes he is the bell of the ball at the moment-but he's forgetting who brought him. He hasn't been in office too long but he is squandering all his good will by courting the exotic Wall Street whores instead the nice plain, hard working girls on Main Street. I pity him if he doesn't come to his senses soon. Bush could claim stupidity-Obama has no excuse and will be held to a higher standard.

Happy hunting and watch out for the bears.

[Dr.Phool]

69. He's not dancing with them that brought him.

He's dancing with them that BOUGHT him.

[Karenina]

76. Bingo!

[Tansy_Gold]

70. "You Got to Dance with Them What Brung You"

by our dear and still much lamented Molly Ivins.

She knew. She knew.



TG

[AnneD]

72. That is an old Texas saying.....

that was well before Molly's time. A simple bit of wisdom that the old timers imparted to those of us that took a few minutes to them.

[Tansy_Gold]

78. Oh, I knew that. I just meant that Molly had let the rest of us know

what was going on a long time ago.

[AnneD]

82. Lot's of us Texas Dem's were trying to warn folks....

not to many folks in the rest of the country were listening though. She also talked about Gov Goodhair but he is being considered as a possible GOP standard bearer. He won't carry his own state in the next election.

[DemReadingDU]

90. Check out Time For Change's thread

3/31/09 President Obama and the Powers Behind the Throne.
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5361126

and

27inCali's thread about the President doesn't run this country, international banks and a handful of super-rich families do.
http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=8299977


They both try to explain that while Obama is President, our country is largely controlled by powerful shadowy figures.

[Demeter]

63. It could Just Be Hubris--in the Kennedy Mold

He's a little too young to have survived the mid-life crisis and had some reality knocked into him.

[Dr.Phool]

68. I'm not cutting him that much slack any more.

He's screwing the middle class, like there's no tomorrow. He's put the worst of the foxes in charge of the hen house.

I remember when he was first elected to the Senate, and he protested when the DLC listed him as a member. I think he had plans, and he didn't want his cover blown. Conservative Dems, and Repukes make up his entire administration. Progressives and liberals are not welcome.

He's another reason that I'm not a Democrat anymore.

[specimenfred1984]

74. Don't take that outside of this forum...

The bots will be on you like flies on shit. The bots don't want to learn anything, hold anyone responsible for crimes or even attempt to recognize that crimes of epic proportions have been committed. They want their kids college paid for by Obama, like Bush gave them $300 and the rest of the world can go to hell. They want corruption to work for them rather than address the seemingly insurmountable culture of corruption. Lazy, greedy, dumbed-down and propagandized: the American dream.

[Dr.Phool]

75. Oh yeah, I've been out there.

Blasphemy is punishable by stoning to death.

Mention the word "Krugman", in a good light, and you'll be burned at the stake.

A woeful lack of critical thinking, and skepticism out there.

[Tansy_Gold]

79. right. And they're gunnin' for boomers, 'cause that's who's REALLY

to blame.

:rolleyes:



TG, boomer

[specimenfred1984]

80. They're gunnin' for anyone who dares speak the truth

It's not surprising, the U.S. has been a fascist country since Reagan and a propagandized country for 100 years. They think by telling the truth we're pooping on their parade, in typical knee jerk reactionary reflex action. The bots come from a culture of pure propaganda from every side of the political spectrum, truth very rarely has ever reached their ears.

[Tansy_Gold]

84. Check out the LBN thread on the differing treatment of banks v. GM

There are some bot heads popping.

And yes, I realize this thread is just as public as the other one, and some of the "bots" probably lurk here, too. But there are some eyes being opened and they don't particularly like what they see.



Tansy Gold

[specimenfred1984]

87. I just posted that a sad economic reckoning lies ahead for the U.S.

because we've given the criminal banks 100s of billions and they are going to prevent moving ahead with energy plans, infrastructure plans, health care plans, etc... So many people just don't understand or care to remedy the amount of corruption that exists.

[Dr.Phool]

88. It reminds me of when I was learning to fly.

My instructor was teaching me to make an emergency landing at night.

The procedure was, establish glide speed. Attempt re-start. If that doesn't work, turn on landing light. If you don't like what you see, turn it off.

[Wednesdays]

103. The killing part is, some on DU think SMW is a fascist thread

I kid you not, on one thread in GD a couple of weeks ago, someone flippantly said that the SMW threads were dominated by fascists. I just about flipped.

[Demeter]

105. Well, I Suppose If You Have No Concept of the Meaning of the Word

then we ARE fascists. Also socialists, capitalists, and any other --ist.

But what we strive to be, and I say this without fear of making a fool of myself, I say,

WE STRIVE TO BE REALISTS AND IDEALISTS!

[Pale Blue Dot]

85. It's really, really depressing.

I only go into GDP anymore if I want to be completely disgusted. GD can sometimes still be tolerable. I've started to use the ignore button on the worst cheerleaders, if only because they bring out that snotty, sarcastic side of me.

[DemReadingDU]

91. and who has the time?

It's all I can do to find time to read the SMW, and a couple other financial blogs.

:eyes:

[Tansy_Gold]

96. And here in SMW and WEE, we LOVE your

snotty sarcastic side!!!

:yourock:


I'll read some headline items over in GDP and/or GD, and I can sometimes be tempted to post, but it is scary over there.

[Dr.Phool]

98. It's more fun if you drink a lot before going there.

[Festivito]

31. Debt: 03/27/2009 11,045,554,110,788.92 (DOWN 693,546,260.56) (Down a little.)

(Down a tiny amount.)

= Held by the Public + Intragovernmental(FICA)
= 6,753,632,237,153.97 + 4,291,921,873,634.95
DOWN 468,145,936.78 + DOWN 225,400,323.78

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 306,054,258 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,090.18.
A family of three owes $108,270.55. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 8,019,505,216.73.
The average for the last 30 days would be 5,613,653,651.71.
The average for the last 28 days would be 6,014,628,912.55.
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$/day.
There were 47 reports in 66 days of Obama's part of FY2009 averaging 0.34B$ per report, 0.35B$/day so far.
There were 122 reports in 178 days of FY2009 averaging 8.37B$ per report, 5.73B$/day.

PROJECTION:
There are 1,395 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 19.4T$.
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)
03/27/2009 11,045,554,110,788.92 BHO (UP 418,677,061,875.84 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: 1,020,829,213,876.50 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********
03/25/2009 +000,059,898,960.86 ------------*******
03/26/2009 +007,175,786,187.90 ------------*********
03/27/2009 -000,468,145,936.78 ---

91,388,262,603.35 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,380,922,307,529.85 in last 190 days.
That's 1,381B$ in 190 days.
More than any year ever, including last year, and it's 136% of that highest year ever only in 190 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 190 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=3806687&mesg_id=3806733

[Festivito]

100. Debt: 03/30/2009 11,043,588,980,678.90 (DOWN 1,965,130,110.02) (Little, mixed.)

(Debt up a tiny amount, FICA down.)

= Held by the Public + Intragovernmental(FICA)
= 6,753,702,140,034.65 + 4,289,886,840,644.25
UP 69,902,880.68 + DOWN 2,035,032,990.70

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 306,072,772 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,081.58.
A family of three owes $108,244.74. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 4,829,699,334.67.
The average for the last 30 days would be 3,380,789,534.27.
The average for the last 28 days would be 3,622,274,501.00.
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$/day.
There were 48 reports in 69 days of Obama's part of FY2009 averaging 0.25B$ per report, 0.25B$/day so far.
There were 123 reports in 181 days of FY2009 averaging 8.28B$ per report, 5.63B$/day.

PROJECTION:
There are 1,392 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 18.9T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/30/2009 11,043,588,980,678.90 BHO (UP 416,711,931,765.82 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: 1,018,864,083,766.50 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon
03/24/2009 +000,222,913,900.31 ------------********
03/25/2009 +000,059,898,960.86 ------------*******
03/26/2009 +007,175,786,187.90 ------------*********
03/27/2009 -000,468,145,936.78 ---
03/30/2009 +000,069,902,880.68 ------------******* Mon

91,497,486,630.57 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,378,957,177,419.83 in last 193 days.
That's 1,379B$ in 193 days.
More than any year ever, including last year, and it's 136% of that highest year ever only in 193 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 193 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=3808202&mesg_id=3808302

[snot]

34. Tansy suggested I re-post this today:

Um, did you see this: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x5359700

I'm really bad with numbers; but isn't 88 trillion an order of magnitude beyond what I thought our worst-case scenario was?

Thanks, all.

[tclambert]

37. "Off-balance-sheet unregulated derivatives"

Speak English, wudja! How can $88 trillion dollars of anything be "off-balance-sheet?" No, check that. How can anything not count on a bank's balance sheet? Aren't there some basic standards of fiduciary responsibility? How could their auditors ever, ever sign off on the corporation's financial soundness if . . .

Sorry, I'm too disgusted to complete that sentence.

[tclambert]

38. I'm good with numbers. Technically, 88 trillion is what we call

a shitload. Here's how to understand it, Festivito-style. There are approximately 300 million Americans. Divide that into 88 trillion and you get 293,333 per person. It's more that a million for a family of 4. If that's dollars, it is a SHITLOAD! The Gross Domestic Product of the United States of America for the year 2008 is estimated at $14.58 trillion (source: CIA World Fact Book). $88 trillion is about 6 times that. Shit Load.

To answer your question, I've heard estimates of bailouts in the trillions, but not as high as ten trillion. So 88 is about one order of magnitude bigger.

(Did I mention that $88 trillion is a shitload of money?)

[snot]

40. So could this possibly be true, or do we have any idea?

[skoalyman]

42. and the fleecing continues

U.S. Markets close in 6 hrs, 19 mins
Symbol Value Change Percentage Change
DJIA 7,574.83 52.81 + 0.70%
NASDAQ 1,524.29 22.49 + 1.50%
S&P 500 793.69 6.16 + 0.78%

[Tansy_Gold]

53. MY idea. . . . . . .

I don't know if I have this right and atthe moment I'm buried under a shitload of work that I have to address, but. . . .

If I sell you a car for $10,000 and you sell it to your brother for $12,000, that counts as $22,000 in sales. Even though it's only one car and it's really only worth the $12,000 your brother paid for it.

The $650 TRILLION or so in derivatives lying out there aren't really worth $650 trillion by themselves, but the various contracts they're tied up in total that number.

Problem is that when there are naked CDSes on those contracts, no one really knows what anything is worth or how the contracts are rlated to each other. hence all the need to retain the assholes who fucked it up so they can unfuck it.


Like that's gonna happen any time soon.


TG

[Hugin]

57. IMHO... That is a correct take on it, Tansy_Gold.

I will only add my suspicion that this HUGH balance was built up during the Mergers and Acquisitions (M&A) craze of the past 20 years or so...

By those same Venture Corporatists largely responsible for the present Auto Manufacturing Meltdown... :cough:like GE-GMAC-Cerberus-Carlyle:cough:

[tclambert]

60. I see we have now dropped the metric standard in favor of the shitload standard

Kilograms, kilometers, kilojoules, bah! Everyone knows what a shitload means.

[Demeter]

65. We'll Surely Know in about 30 years

Maybe sooner, with the internet, if it survives the meltdown.

[Hugin]

43. Also, if they are 'off-balance' sheet... How is it that taxpayers are expected to pick up the tab?

Great! They went to the casino and all I got was this stupid bill. :eyes:



Sorry guys... I have nowhere near $1,000,000 and I never will at this rate.

Have you checked with Dr. Evil?

[antigop]

51. Wow! I'm late to the party today and no one posted this yet? AIG and offshore accounts

http://tpmmuckraker.talkingpointsmemo.com/2009/03/the_feds_are_closing_in_2.php?ref=fp8

The Feds are closing in on a criminal fraud case against Joseph Cassano, reports ABC News, which tracked down the former AIG Financial Products czar wearing blue spandex and a sheepish expression outside his home in London. And before you wonder why a Brooklyn College educated swaps dealer with a name like Joe Cassano lives in London again, the answer is probably "taxes" -- and decimating taxes, it may not shock you to know, is fast emerging as the cornerstone of the AIG business model.

...
And as breathtaking as the sum of taxpayer dollars AIG has managed to put down in its post-crisis nationalized afterlife, the zombie insurer might possibly have indirectly scammed the government out of more money back in its Triple-A days. Today the Wall Street Journal explores AIG's euphemistically-named "tax structuring" business in a story about an IRS battle with Hewlett-Packard over an offshore entity -- or what the IRS terms a "sham that lacked economic substance and a business purpose" -- that AIG set up for the company to collect $132 million in tax credits. AIG's tax business, is "even bigger than the credit-default swaps business that led to the company's meltdown," a person "familiar with the business" tells the Journal. But that might be compartmentalizing things: we are beginning to suspect the credit default swap business and the tax "structuring" business were the same thing -- not just because they served the same end.

An attorney and tax shelter expert we spoke with today says AIG FP was one of the biggest players in the business of engineering offshore tax shelters for corporate and private clients that resembled a multibillion dollar tax evasion scheme called Son of Boss (we don't have time to figure out why) that thousands of corporations and wealthy individuals used to book phony capital gains losses and evade most or all of their income taxes in the late nineties and early 00s. The mind-numbing litany of esoteric loopholes such tax shelters employ to concoct said phony losses is something you don't want to hear about at this hour -- trust us -- but they are generally anchored by a set of exotic unregulated derivative securities whose 'notional value' can help fabricate losses that don't actually exist. Which is where Cassano came in -- only, obviously, the losses existed.

AIG, whose lawyers taxpayers are currently (perversely) paying to sue the IRS for taxes it says it paid unlawfully, was renowned for finangling the tax xode, but our source suggested Cassano went too far -- which might have been another motive for hiding AIG FP's books from the auditor. Developing...

[Demeter]

66. We need Sound Effects--REd Alert! REd Alert! System Overload!

stop and reboot, core implosion.

If we were having a GROSSOUT COMPETITION, you beat me hands down. What's a little house-stripping compared to that?

[spotbird]

44. Mack Warns Morgan Stanley Difficult Year With Recovery Deferred

Morgan Stanley Chief Executive Officer John J. Mack, who will run the largest broker-dealer when the acquisition of Smith Barney from Citigroup Inc. is completed later this year, told employees in a nationwide conference call yesterday that 2009 will be “a difficult year,” mostly because of so many toxic debts that have yet to be cleansed from the bank’s holdings. Among the 529 financial institutions that received loans from American taxpayers, according to data compiled by Bloomberg, Morgan Stanley isn’t yet prepared to pay back the $10 billion it received from the U.S. Treasury in October.




http://www.bloomberg.com/apps/news?pid=20601087&sid=aNqa2y1RGKEA&refer=home

[Ghost Dog]

54. France is threatening G20 walkout

France will walk away from this week's G20 summit if its demands for stricter financial regulation are not met, the finance minister has told the BBC.

Christine Lagarde told Hardtalk that President Nicolas Sarkozy would not sign any agreement if he felt "the deliverables are not there".

Strengthening financial regulation will be one of the key issues at the G20.

France wants a stronger global financial regulator than the US and the UK would like.

If France were to leave the summit, it would be a blow to both UK Prime Minister Gordon Brown and US President Barack Obama.

Both men have spoken of their high hopes for the meeting to stimulate international recovery.

"Leaders meeting in London must supply the oxygen of confidence to today's global economy and give people in all of our countries renewed hope for the future," Mr Brown said.

President Obama is due to arrive in London for the summit later. It will be his first visit to Europe since he became president.

/... http://news.bbc.co.uk/2/hi/business/7974190.stm


Were France to successfully lead such a walkout, then I believe others would follow to the extent that we would see consummated a definitive and world-changing division between the "Anglo-Saxon World" and the Rest.

[antigop]

56. Oh, those crazy French socialists.

Glad you posted this. I heard it on NPR this morning.

[AnneD]

73. Boy, do they have gall...

:evilgrin: Now THEY know how to conduct class warfare.

[Demeter]

93. Anne Darling, It's Spelled "Gaul", Unless It's a Last Name

in which case it's spelled de Gaulle.

:rofl:

[AnneD]

109. I was just trying to be....

Punny. Your talking to someone dat once had de dog named Phideux do don't ask me to spell.:spray:

[Demeter]

110. I Was Trying To Pull Your Leg, Too

[AnneD]

114. I caught it.....

love to work puns in whenever I can.

[Demeter]

67. I Hope They Do. I Hope It Does Happen

That would put a really big spanner in the works, such that maybe we'd get some of these crooks in jail to keep Madoff company.

[specimenfred1984]

81. Whatever you do, DO NOT tell people what their 401ks are invested in

You'll be called every name in the book, be screamed at, slandered and have every motive questioned. Who needs a bunch of socially-conscience investments anyway? LOL.

[AnneD]

86. Failed 1933 London conference a warning for G20

LONDON — Desperate but divided on ways to lift their nations from economic misery, world leaders hold scant hopes of finding a magic-bullet solution at the crisis summit that has brought them hurrying to London.

Even as global leaders were arriving today, the U.S. acknowledged its allies would not go along with a massive burst of stimulus spending, while Europe was forced to backpedal from hopes for tighter financial regulation.

Instead, leaders are trumpeting the limited common ground they could reach, including more money for the International Monetary Fund and closer scrutiny of hedge funds and tax havens. As for the broader issues, they’re hoping for the best — or at least that they will do no harm.

With turbulent world markets watching closely, the stakes are high, especially for America’s new president, stepping onto the world stage for the first time to deal with the economic crisis and to meet face-to-face with many other leaders.

more....

http://www.chron.com/disp/story.mpl/business/6351706.html

deja vu....

[Demeter]

92. I Have a New-Minted Philosophy To Get Me Through These Trying Times

It consists of two statements:

1. It's the end of the world.

This statement has a way of removing all expectations. What can you expect, it's the end of the world! Anything good that comes your way is a gift, be thankful and share with the less gifted, or hoard if that's your bent. Just don't expect any repeats. Unless you've been sharing, of course.

2. At least I'm not in Fargo.

This phrase reminds us that there's no place like home, when the shit hits the fan. People who actually LIVE in Fargo can tell themselves: "At least Sarah Palin isn't governor."

I was sulking for most of March because both in my little world and in the great Outdoors everything was going to hell in a handbasket. But these two simple declarative statements have freed me to rebuild my circumstances, to accept what I cannot change, and to be the best person I can in the Greater Depression.

See if some similar guidelines work for you!

[tclambert]

94. GM down another 28% today.

Closed at $1.94. It closed at $3.62 Friday. 46.4% drop since Friday. It might just be that GM shareholders are not optimistic.

Car sales figures for March will come out in a few days. That could be the final straw.

Baseball, hot dogs, apple pie, and, . . . um, . . . Hyundai?

[ozymandius]

101. Closing numbers and blather - gains for no apparent reason

Dow 7,608.92 Up 86.90 (1.16%)
Nasdaq 1,528.59 Up 26.79 (1.78%)
S&P 500 797.87 Up 10.34 (1.31%)
10-Yr Bond 2.685% Down 0.029
NYSE Volume 7,092,318,500
Nasdaq Volume 2,218,905,750

4:25 pm : Despite a lack of positive catalysts, strength in financial stocks led the broader market to a gain Tuesday. The advance, however, was threatened late in the session as a wave of selling pressure slashed gains.

Stocks spent the entire session in positive territory. Early action was a bit mixed and trading was choppy, but financials showed leadership. Strength in financials was put to the test in the final hour of trading, though, as a broad-based selling effort took the major indices markedly off their session highs. The S&P 500 was up as much as 2.9%, but finished with a 1.3% gain. Financials eased back from an 8.1% advance to close with a 6.7% gain.

Financials were able to put together a 17.6% gain for March. That helped the S&P 500 advance 8.5% during the month, which marks the stock market's first monthly gain in eight months. What's more, that's the stock market's best monthly gain since 2002. However, the S&P 500 concluded the first quarter with a 11.7% loss.

Trading volume on the New York Stock Exchange was in-line with the 50-day moving average as roughly 1.6 billion shares traded hands this session.

Overall news flow was dry this session, but there were a couple of economic reports for participants to chew on. The S&P/Case-Shiller 20-city Composite Home Price Index for January declined 19.0% year-over-year, which was a bit worse than the 18.6% drop that was expected.

Meanwhile, the March Consumer Confidence Index came in at 26.0, which is worse than the expected reading of 28.0. The latest reading marked a moderate increase from February's record low reading of 25.3.

There aren't any market-moving earnings reports due ahead of tomorrow's opening bell. However, the ADP Employment report for March will give participants a glimpse into the government's official jobs report, which is due Friday. The March ISM Manufacturing Index is also due tomorrow morning.DJ30 +86.90 NASDAQ +26.79 NQ100 +1.3% R2K +1.6% SP400 +1.6% SP500 +10.34 NASDAQ Adv/Vol/Dec 1861/2.15 bln/852 NYSE Adv/Vol/Dec 2306/1.64 bln/742

[Demeter]

106. Looks Like a Pump and Dump Day, Esp. With the 100 pt. Loss at the Close

Same shit, different day.