STOCK MARKET WATCH, Tuesday April 27

Source: du

STOCK MARKET WATCH, Tuesday April 27, 2010

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Euro, Yen, Loonie, Silver and Gold

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Handy Links - Market Data and News:Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance    Google Finance    Bank Tracker    
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Handy Links - Government Issues:
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Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman
    William Black: This Economic Disaster    Bill Moyers with Kevin Drum and David Corn

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 11

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

09:00 Case-Shiller 20-city Index (y/y) Feb
Briefing.com 0.7%
Consensus 1.1%
Prior -0.7%

10:00 Consumer Confidence Apr
Briefing.com 54.0
Consensus 53.5
Prior 52.5

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

Home Prices Post Year-to-Year Gain
http://online.wsj.com/article/SB10001424052748704471204575209910893712840.html?mod=WSJ_PersonalFinance_RealEstate




Maybe I picked the right time to finally jump back into the market?

A surge in wholesale gasoline prices should push pump prices to an 18-month high and put drivers in many parts of the country on the cusp of having to pay $3 per gallon for gasoline.

Pump prices have been mostly flat for the past week. But wholesale prices jumped 5 cents Friday.

In one sense, drivers actually have been getting a break at the gas pump. Oil prices of $80 a barrel, about the average cost for crude so far this year, typically mean a pump price of about $2.90 per gallon, said oil analyst and trader Stephen Schork.

The reason the hasn't gone that high yet is because demand for gasoline continues to be weak, he said. Gas prices have surpassed the $3 mark in 9 states, including California and New York, according to AAA.

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

gushing out of a busted pipe under 5,000 feet water off the La. coast. The slick is estimated to be about the size of Delaware and growing. The winds will decide where the oil makes landfall..The threat extends from the Florida panhandle to the bayou's of Louisiana.

How does that get priced in?

Texas is rich in estuaries, esp Lagoona Madre. These are the sea's nurseries. Just makes us sick with grief.

Hong Kong is about 400 square miles. Delaware is about 2400 square miles. Skipped right past Rhode Island.

Prediction: As big as Connecticut is next, within a day or two.

but I went to Rhode Island. You can skip past it.

How's that "Drill, baby, drill" thing workin' out for ya?

we love the energy we get but we are well aware of the price we pay. Many here were pissed about the attitude some in the NE had toward Texas during the Arab Oil Embargo. Some folks expected us to give the gas away to the NE for next to nothing.

We pay a heavy price for that 'cheap oil'. We have high incidences of certain types of cancer related to the refinery industry in a very wide corridor along the Gulf coast. And then there is the Gulf. We fish and shrimp and crab from the waters.

And then there are those that die in the process of bringing the oil out. I have a lot of empathy with the coal miners of the Virginia's and Pennsylvania. We share many of the same problems. There is no such thing as cheap energy and we must be wise in it's use.

http://network.nationalpost.com/np/blogs/francis/archive/2009/09/16/oil-prices-mean-perpetual-recession.aspx

“The US has experienced six recessions since 1972. At least five of these were associated with oil prices. In every case, when oil consumption in the US reached 4% percent of GDP, the U.S. went into recession. Right now, 4% of GDP is US$80 a barrel oil. So my current view is that if the oil price exceeds US$80, then expect the U.S. to fall back into recession,” wrote Steven Kopits, managing director for U.K.-based energy-consulting and -research firm Douglas-Westwood LLC in New York...

about speculation do not seem to give a shit.

Fact: Recessions never end when consumer prices continue to rise.

Another remarkable job, ozymandius! :yourock:

I may have looked at five cartoons before spotting this one and maybe a dozen more afterwards. This one had something special.

Good morning. :donut: :donut: :donut:

It certainly stopped me in my tracks and made me take a deep breath. Thanks so much for sharing that with us and for all your hard work... :fistbump:

They're always good ones, but this one was an award winner... :applause:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4358100

Australia shelves key emissions trading scheme

and link: http://news.bbc.co.uk/2/hi/asia-pacific/8645767.stm




Hard choices with the future in the balance, indeed...

:thumbsup:

WASHINGTON – Even as he touts his efforts to put more Americans to work, President Barack Obama faces a public increasingly skeptical of his ability to bring jobs back to Main Street.

During stops in Iowa, Illinois and Missouri, Obama will try to convince voters that his economic policies are working, despite an unemployment rate that's expected to remain at painfully high levels for months if not years.

The latest economic forecasts do show signs of progress: The nation added jobs at the fastest pace in three years last month; the manufacturing industry is growing at a steady pace; and new claims for jobless benefits have declined.

But the unemployment rate - it may be the most recognizable economic indicator - has held steady at 9.7 percent for the past three months, and 15 million Americans remain out of work. By the White House's own estimates, as well as those of many independent economists, that rate isn't expected to fluctuate more than a few tenths of a percent through the end of 2010.

A more telling sign of the impact the stimulus and other job creation programs have had is the number of jobs gained or lost each month, according to administration officials. As Obama is quick to point out, the economy was losing 700,000 jobs a month when he took office. That number has steadily declined, and in March, there were 162,000 jobs created, the most in nearly three years.

http://news.yahoo.com/s/ap/20100427/ap_on_re_us/us_obama

and why he isn't going to get a clue any time in the near future, given the advisors he's surrounded himself with.

HONG KONG – Most global stock markets dropped Tuesday as worries about Greece's rescue plan and China's measures to slow its economy held investors back.

European shares opened modestly lower after Chinese stocks led Asia's decline with a 2 percent loss. The dollar weakened against the yen and rose against the euro, while oil prices traded below $84 a barrel.

Initially cheered by this week's news of Greece's bailout, investors were once again fretting about the country's debt crisis after Germany insisted Athens push through more austerity measures before receiving any financial help.

As trading started in Europe, Britain's FTSE 100 fell 0.5 percent, Germany's DAX was down 0.2 percent and France's CAC-40 dropped 0.7 percent. Futures suggested Wall Street was headed for a mediocre open on Tuesday.

In Asia, Hong Kong's Hang Seng index dropped 1.5 percent to 21,261.79 and China's main Shanghai benchmark tumbled 2.1 percent to 2,907.93.

In Japan, the Nikkei 225 index reversed early losses to add 46.87 points, or 0.4 percent, to 11,212.66.

http://news.yahoo.com/s/ap/20100427/ap_on_bi_ge/world_markets

German Chancellor Angela Merkel hit the campaign trail with a warning to Greece and the rest of the euro region that a bailout of the debt-stricken nation isn’t a done deal.

Greece is paying the price for Merkel’s bid to keep her coalition in control of Germany’s most populous state and ease voters’ anger about having to help fund a $60 billion bailout. Greek bonds plunged yesterday as Germany’s reluctance to guarantee funds stoked concern that a rescue package co-financed by the euro region and the International Monetary Fund could still fall apart.

Greece has 8.5 billion euros ($11.4 billion) of bonds coming due next month after the state election and the extra yield that investors demand to hold its 10-year bonds over German bunds jumped 93 basis points to 652 basis points yesterday. Yields stayed near the highest since at least 1998 today amid mounting concern Greece will ask investors to accept delayed or reduced payments on its debt.

Greek Finance Minister George Papaconstantinou was negotiating terms of the aid during a meeting of counterparts from the world’s biggest nations in Washington. With Greece facing 8.5 billion euros of bonds maturing in May, with the first redemption due May 19, finance ministers yesterday sought a swift resolution of the talks amid concern any delay may trigger a further sell-off and spread to other markets.

http://preview.bloomberg.com/news/2010-04-26/merkel-hits-campaign-trail-warning-that-greek-bailout-not-yet-guaranteed.html

Her intransigence empowers and encourages the short-sellers. The Euro still has too many skeptics and naysayers to take this kind of abuse.

WASHINGTON – Democrats planned to keep up the pressure on Republicans after an expected setback put the brakes on Senate consideration of financial regulations.

But their task got slightly more complicated by the defection — at least for now — of one Democrat, Sen. Ben Nelson of Nebraska.

Nelson voted with Republicans on Monday to deny Democrats the 60 votes they needed to advance the legislation to a floor debate. Democrats were expected to try again Tuesday, and yet again the day after if necessary.

The legislation would require derivatives — previously unregulated exotic securities — to be traded in open exchanges and cleared through a third party that would guarantee the contracts. An agreement Monday between Dodd and Agriculture Committee Chairwoman Blanche Lincoln, D-Ark., would exempt existing derivatives from the clearing requirements.

Lincoln's proposal also would have exempted existing derivatives contracts from margin requirements, or collateral. Dodd succeeded in eliminating the collateral exception. That would potentially add significant costs to companies with derivatives portfolios, such as Buffett's Berkshire Hathaway Inc.

http://news.yahoo.com/s/ap/20100427/ap_on_bi_ge/us_financial_overhaul

Goldman Sachs Group Inc., Wall Street’s most profitable firm, will face off against a U.S. Senate subcommittee today in a pivotal hearing that could have repercussions for the future of the financial industry.

Carl Levin, a Michigan Democrat who leads the Senate’s Permanent Subcommittee on Investigations, released documents that he said showed the company “put its own interest and profit ahead of the interests of its clients,” a conflict he called on Congress to end. Lloyd Blankfein, Goldman Sachs’s chairman and chief executive officer, will dispute that assertion and argue the firm was merely managing its own risk.

The hearing, set to begin at 10 a.m. in Washington, will start with questioning of Tourre; Michael Swenson, a managing director in the structured-products group; Joshua Birnbaum, a former managing director in the same group; and Daniel Sparks, a former partner who ran the mortgage department.

Later in the day, the subcommittee will hear from David Viniar, the firm’s chief financial officer, and Craig Broderick, the chief risk officer. Blankfein, 55, will be the final witness, facing the panel alone at the end of the hearing.

Yesterday U.S. Senate Republicans blocked Democrats from advancing their plan to overhaul Wall Street regulation as the two sides debate provisions including consumer protections and derivatives. Both parties are trying to tap into voter anger at Wall Street and the bank bailouts that took place as Americans grappled with record home foreclosures and rising unemployment.

Goldman Sachs would probably be hardest hit among large U.S. banks if Congress bans firms from trading for their own account. Viniar, the CFO who’s scheduled to testify today, estimated in January that approximately 10 percent of the company’s revenue derives from trading that has no connection with customer business. That would have been about $4.5 billion last year.

http://preview.bloomberg.com/news/2010-04-27/goldman-sachs-to-face-senate-s-levin-in-post-crisis-reckoning.html

From Naked Capitalism:

As Goldman and the Senate Committee on Investigations are duking out The Battle of the E-Mails, with each side claiming the other has painted a misleading picture, it is becoming pretty clear that Goldman, contrary to its sanctimonious twattle about putting clients first, actually puts its fees first.

....

So it is predictable that an e-mail dump would unearth some less than savory conduct. For instance, the Wall Street Journal highlights that Goldman worked with some crappy lenders:

Washington Mutual Inc. and its Long Beach Mortgage Co. subprime-lending unit rang up one of the worst failures in U.S. history. Left in the wake were billions of dollars of soured loans and questionable lending practices…

Recently released emails and other documents, including securities filings, show how Goldman, considered one of Wall Street’s most elite banks, built its mortgage business by closely working with lenders such as Washington Mutual and Long Beach, two firms that “polluted the financial system” with souring loans, according to a Senate review of Washington Mutual on April 13.

Yves here. There is a little problem with this account. Anyone who was in the subprime business would have dealt with some crappy lenders. So while Goldman is fair game for criticism here, why aren’t the other major firms also being raked over the coals?

More revealing is Goldman’s role in a particularly bad deal, Timberwolf. a $1 billion CDO.

click through the link to see the e-mail exchanges between GS employees as they discussed selling Timberwolf garbage

Note that these exchanges don’t simply suggest that Timberwolf was a bad transaction; they depict it as a singularly wretched monstrosity. And that in turn implies that there were less ostentatiously awful deals that Goldman also trafficked in. A “routine” bad deal might not merit comment (I’ve seen enough of these back as far as the more prim and proper 1980s as to be highly confident that that pattern is even more deeply entrenched now), which might make it harder for investigators to ferret out, since it would be unlikely to provoke the sort of comments that are persuasive to a jury or judge.

I doubt that we will see another e-mail dump from GS. Pity that. But it is probably unnecessary given the amount of treasure the firm has given the public with this sloppy offering.

was with Wamu in 2002 when we purchased the house. In '04 we refinanced online when the rates were at their lowest. Wamu bought us back with 3 months. Then in '06 sold us to Wells Fargo who bought Wachovia where our checking was. Have never seen anything like it.

If you have access, tune into C-Span for this round.
:donut: good morning!

Gr8 toon...And never forget our troops in the Middle East doing the sacrifice for XOM/etc

while appearing before Congress wearing a pointy black hat, carrying a gnarly broomstick, and wearing just a hint of make-up that fails to conceal the hairy wart on their nose.

Still, their sorcery is powerful. I fully expect they will pay a penalty, perhaps millions of dollars. Meanwhile, they will continue to make billions upon billions.

Sorry, Demeter, but I can't go along with a FRSP on this one. I want piles of firewood for a more Joan of Arc ending. "Throw another banker on the barbie!"

And bring Altoids. Besides, I'm pretty sure burning bankers smell like bacon. All that pork fat, don'tcha know.

Engineers are a generally pragmatic bunch---whatever gets the job done--quicker and cheaper is better, of course. But not having big messes to clean up after is also a consideration.

Enron and other execs who "couldn't recall" what was going on.

There comes a time when someone has to confront these greedy bastards and look them in the eyes and tell them --

YOU ARE SICK, GREEDY BASTARDS WHO HAVE DRIVEN MILLIONS OF PEOPLE INTO POVERTY, DESPAIR, AND EVEN DEATH. HOW MUCH FUCKING MONEY DO YOU NEED? WHEN IS IT ENOUGH? WHEN? 'CAUSE IN THE END YOU'RE STILL DEAD, RICH OR POOR, AND SO FAR NO ONE HAS BEEN ABLE TO TAKE IT WITH THEM.

AND NO, YOU'RE NOT DOING GOD'S WORK. SHE TOLD ME SO LAST NIGHT.





Tansy Gold

:popcorn:

:popcorn: :beer:

http://www.c-span.org/Watch/C-SPAN3.aspx

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8224506

Investors Were Not Duped, Goldman Tells Senators
http://www.nytimes.com/2010/04/28/business/28goldman.html?src=busln

From The Big Picture:

-see chart-

Have Americans suddenly found their credit cards en masse? Have banks suddenly loosened their record tight credit standards? Is all the money that’s been sitting on their balance sheets about to flood into the economy?

Hardly.

Whenever I come across highly aberrational economic news data series, I always try to discover if anything is haunting the underlying data series.

In the case above, the ghost in the credit machine was a FASB related change in the way accounting now gets reported, thanks to FASB 166/167. The Fed announced, in Notes released on April 9, certain accounting changes to this data set.

With regard to the specific series in question, the Fed wrote:

As of the week ending March 31, 2010, domestically chartered banks and foreign-related institutions had consolidated onto their balance sheets the following assets and liabilities of off-balance-sheet vehicles owing to the adoption of FASB’s Financial Accounting Statements No. 166 (FAS 166), Accounting for Transfers of Financial Assets, and No. 167 (FAS 167), Amendments to FASB Interpretation No. 46(R). Domestically chartered commercial banks consolidated $377.8 billion in assets and liabilities.

…consumer loans, credit cards and other revolving plans, $323.9; consumer loans, other consumer loans, $41.3;

The moral of the story is we must always look twice at aberrational data series. This includes economic news that is either too bad or too good or simply too strange.

One must always look twice at anything that is unusual.

ozy here: I have seen this information reported in news items without close attention being paid to the aggregate data. Heck - I may have made that mistake of not looking too closely. I, for one, am glad that we have seasoned professionals to bring the hidden details into the light.

From Calculated Risk:

Q1 2010: Homeownership Rate Lowest Since Q1 2000

The Census Bureau reported the homeownership and vacancy rates for Q1 2010 this morning. Here are a few graphs ... (see at link...)

The homeownership rate declined to 67.1%. This is the lowest level since Q1 2000.

Note: graph starts at 60% to better show the change.

The homeownership rate increased in the '90s and early '00s because of changes in demographics and "innovations" in mortgage lending. The increase due to demographics (older population) will probably stick, so I've been expecting the rate to decline to the 66% to 67% range - and not all the way back to 64% to 65%.

A normal rate for recent years appears to be about 1.7%.

This leaves the homeowner vacancy rate about 0.9% above normal. This data is not perfect, but based on the approximately 75 million homeowner occupied homes, we can estimate that there are close to 675 thousand excess vacant homes.

Bush and his wrecking crew gave us eight years on the road to nowhere. Thanks a heap, asshole.

I'm not gonna like the answer to this one, I can tell. Tent camps? What do we call what used to be called Hoover-villes? Bush-villes? Cheney canps?

Remember when people were worried we might have an economic "lost decade" like Japan did?

eight units had 9 tenants. As of yesterday, those 9 tenants have 12 "guests" with no place to go, for a total of 21 people living there. Fire marshal is going to get me, so we're trying to find reasonable places for those folks, with little luck. Too many landlords around here are sitting on 70-75% occupancy, sure that they don't need to cut rates, because big demand is just around the corner.

We have around 10% unemployment here, which I know isn't nearly as bad as some parts of the country, but part of it is the huge cut in wages. 3 years ago, roughnecks and roustabouts started at $18/hour; now, they're advertising in Panhandle newspapers for ex-farmhands to come down here and work for minimum wage. In addition, trip time to and from location is now not paid, and company trucks are not provided to the crew chief, just reimbursement of gasoline or diesel, so all wear and tear is on the chief, who may be making $10 now.

Saw a 25 year old driller yesterday at a cafe I like. There's no such thing. When I was in the field in the 70's and early 80's, no one would dream of making a driller before they had around 20 years experience in all jobs on the rig. Bad accidents are beginning to pick up, and they will get worse.

the economic numbers that are released showing improvement in the economy. If sales of existing homes were up to a 27 year high, how come the vacancy rate did not drop? In the sickening piece in the NY Times were everything is getting better, they said how much retail sales had improved and people were shopping til they dropped. If this was the case, wouldn't the Baltic Dry Index numbers be soaring? After all, most of the stuff we buy is made elsewhere. An increase in one aspect of the economy should show a corresponding increase in a supporting industry. At least one would think so anyway.

Good day to everyone!

BTW, the BDI chart is over at http://www.bloomberg.com/apps/cbuilder?ticker1=BDIY%3AIND if you are interested.

Those of us who read the Internets, know the economy is not recovering.

Those who have lost their job and can't find another, know the economy is not recovering.

Perhaps the reports are being spinned (spun?) for the wealthy, so they don't have to worry that their status quo could be in jeopardy?

Perhaps for J6P who only hear the upbeat headlines, and continue buying the newest electronic gadgets, cars, homes, taking vacations.

Reminds me of Stein's Law...

"If something cannot go on forever, it will stop."
It is often rephrased as: "Trends that can't continue, won't."
http://en.wikipedia.org/wiki/Herbert_Stein

is being reported. For example, the number of mortgages that are delinquent is soaring. How much newscast time is used reporting this aspect of the economy? Maybe a short blurb here and there. Retail spending is going through the roof. This turns out to be the lead story on every newscast and is reported with great fanfare. News like this only goes to prove the recession is over. Next come the talking heads to tell us what this all means and put their positive spin on the picture. Never mind that WE as a nation borrowed around (IIRC) 2.5 billion dollars to keep our government operating for TODAY.

Has anyone (except on the blogs) brought up the question that maybe, just maybe consumer spending is increased on flat screened TVs, cars and other goods cause folks aren't making their house payments? Naw, that would require some research and might get the proles to start critically thinking about what the information they are receiving from our leaders. Can't have that now, can we?

To hear these upbeat headlines, the recession is over and economy is recovering. It's all, good!

and one day, it will implode, then GOV will tell us...no one saw it coming.

:eyes:

because the mortgage money is gone.

Before
HIS income -- 2,500
HER income -- 2,500
Mortgage -- (2,000)

Net disposable 3,000

After
HIS income -- -0-
HER income -- 2,500

Net disposable 2,500

Obviously, that net disposable has to cover existing debt, utilities, groceries, clothes, etc. And these are nice round numbers. But even if HIS income goes up to $500 on unemployment and he picks up another $500 selling stuff on craigslist, the loss of the mortgage payment still doesn't translate to extra spending money.

More than likely, Tansy Gold suspects in her infinite wisdom, people who still had incomes but were being cautious as the economy tanked are now loosening their pursestrings a bit. They're buying some of the things they denied themselves until they saw how their personal situations were going to play out. Others who lost jobs and had to cut back drastically may have found alternative living arrangments -- bunking with parents/friends, bringing in a roommate, whatever -- and are living more frugally but still have to spend something just to live.

The government stats don't tell us much, but because they don't give details, anyone can fill in his or her own version of the details at will. Some may be correct, many will undoubtedly be wrong. People will tend to believe that which resonates most with their own outlook, since few of them will hve any solid evidence to back up any of the explanations.


Tansy Gold, who has no evidence of her own either

4/27/10 Why the "Nascent Recovery" Won't Last
Charles Hugh Smith

The "nascent recovery" continues to be nascent a year later. Why? Because it's constructed on sand and hyped by smoke and mirrors.

The "nascent recovery" will soon be revealed as "failed" rather than "nascent." How long can "nascent" be deployed as cover for a "recovery" constructed of propaganda, manipulated statistics and "confidence-building" spin?

As my esteemed blogging colleague Mish pointed out not long ago, "nascent" continues to be the word of choice in the MSM, as if no one dares declare the "recovery" real for fear that such a claim will be easily revealed as utterly false. So to keep the spin machine intact, the "recovery" will remain "nascent" as cover for the less rosy reality.

Let's run through the fundamental reasons the recovery is bogus, not nascent.

1. Propaganda and "confidence-building" are constantly substituted for reality. The problem, we are repeatedly told, is a "lack of confidence." Consumers' and corporations' accounts are bulging with idle trillions awaiting "renewed confidence" to gush back into the economy, creating millions of new jobs and trillions in new wealth.

2. Tax/borrow and spend is alive and well. States and local governments gorged on the housing/stock bubbles in the last decade, adding billions to their annual tax revenues and spending in just a few years. California went from collecting $76 billion in 2001 to $96 billion in 2008--a 26% increase of $20 billion.

3. The demographic time bomb is still ticking. The aging of the 78 million-strong Baby Boom means that the number of citizens sucking up Medicare expenses (roughly $400-$500,000 each under many projections based on current costs) will rise by 50% to 67 million in a few years.

4. U.S. GDP and personal income has been propped up by unprecedented Federal borrowing. The private-sector GDP plummeted by $1.5 trillion, so the Federal government borrows $1.5 trillion to backfill the decline. And for good measure, it also socialized the entire U.S. mortgage market, buying or guaranteeding 99% of all the mortgages issued in the past year.

5. The fundamentals of housing are dismal for decades to come. The family house, long viewed as the foundation of middle-class wealth, is now a moneypit, a black hole which sucks up wealth.


lots more at the link, including charts and graphs...
http://www.oftwominds.com/blogapr10/recovery-is-bogus04-10.html

ordinary folks are sitting this one out--or they are buying into my condo association--which is to our benefit, and theirs. Best place to live within the city limits, and mass transportation available. Also close enough to walk or bicycle to many useful spots....

Or perhaps people are doing what I'm trying to do: turn IRA into REIT and buy the Younger kid a home of her own...

better hope it's not a century.

around here.

Time to get out the door.

:hi: :donut:

(Down a small amount. Good day.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,354,793,450,103.36 + 4,522,402,472,271.55
DOWN 156,047,055.50 + UP 4,750,698,565.97

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 309-Million person America.
If every American, man, woman and child puts in $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,128,116 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,656.5.
A family of three owes $124,969.51. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 31 days.
The average for the last 24 reports is 8,595,839,236.90.
The average for the last 30 days would be 6,876,671,389.52.
The average for the last 31 days would be 6,654,843,280.18.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 141 reports in 205 days of FY2010 averaging 6.86B$ per report, 4.72B$/day.
Above line should be okay

PROJECTION:
There are 1,003 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 19.6T$.
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)
04/23/2010 12,877,195,922,374.91 BHO (UP 2,250,318,873,461.83 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,967,366,918,863.20 ------------* * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,722,385,001,878.38 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/05/2010 +021,628,544,775.26 ------------********** Mon
04/06/2010 +000,246,106,716.91 ------------********
04/07/2010 +000,926,408,143.83 ------------********
04/08/2010 +030,863,719,709.59 ------------**********
04/09/2010 -000,215,194,285.06 ---
04/12/2010 -000,193,173,374.30 --- Mon
04/13/2010 -000,086,542,536.22 ----
04/14/2010 +000,857,281,039.39 ------------********
04/15/2010 +039,328,943,525.65 ------------**********
04/16/2010 -000,121,400,113.90 ---
04/19/2010 -017,215,897,730.16 - Mon
04/20/2010 +000,349,194,756.21 ------------********
04/21/2010 +000,180,306,016.37 ------------********
04/22/2010 -015,686,359,446.12 -
04/23/2010 -000,156,047,055.50 ---

60,705,890,141.95 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(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=4357024&mesg_id=4357071

(Down a small amount. Good day.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 8,354,812,455,514.62 + 4,525,551,552,891.34
UP 19,005,411.26 + UP 3,149,080,619.79

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 309-Million person America.
If every American, man, woman and child puts in $3.23 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.7, ABOUT TEN BUCKS for a 1B$ 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 13 seconds we net gain another American, so at the end of the workday of the report, there should be 309,148,054 people in America.
http://www.census.gov/population/www/popclockus.html ON 04/09/2010 15:49 -> 309,034,742
Currently, each of these Americans owe $41,664.06.
A family of three owes $124,992.19. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 8,839,558,390.92.
The average for the last 30 days would be 6,482,342,820.01.
The average for the last 31 days would be 6,273,234,987.10.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 142 reports in 208 days of FY2010 averaging 6.83B$ per report, 4.67B$/day.
Above line should be okay

PROJECTION:
There are 1,000 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 19.2T$.
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)
04/26/2010 12,880,364,008,405.96 BHO (UP 2,253,486,959,492.88 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,970,535,004,894.20 ------------* * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,703,102,292,242.23 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/06/2010 +000,246,106,716.91 ------------********
04/07/2010 +000,926,408,143.83 ------------********
04/08/2010 +030,863,719,709.59 ------------**********
04/09/2010 -000,215,194,285.06 ---
04/12/2010 -000,193,173,374.30 --- Mon
04/13/2010 -000,086,542,536.22 ----
04/14/2010 +000,857,281,039.39 ------------********
04/15/2010 +039,328,943,525.65 ------------**********
04/16/2010 -000,121,400,113.90 ---
04/19/2010 -017,215,897,730.16 - Mon
04/20/2010 +000,349,194,756.21 ------------********
04/21/2010 +000,180,306,016.37 ------------********
04/22/2010 -015,686,359,446.12 -
04/23/2010 -000,156,047,055.50 ---
04/26/2010 +000,019,005,411.26 ------------******* Mon

39,096,350,777.95 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock
http://www.usdebtclock.org/
DUer primer on National debt

(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=4358087&mesg_id=4358119

Ford today said it earned $2.08 billion, or 50 cents per share, during the first quarter of the year, providing more evidence that the Dearborn automaker’s turnaround plan is on track.

Ford’s profit also eclipsed its loss of $1.43 billion, or 60 cents per share, for the same January through March period last year.

Ford also easily beat Wall Street’s expectations. Before special charges, Ford earned $1.76 billion, or 46 cents per share.

Analysts surveyed by Thomson One Analytics expected Ford to report income, excluding special charges, of 31 cents per share, or nearly $1 billion.

Revenue during the first quarter increased by $3.7 billion to $28.1 billion as industry sales increased in the U.S., Europe, South America and Asia. The automaker’s resurgence is due, in part, to new products such as the Ford Fusion and Ford Taurus in the U.S. and the Ford Fiesta in Europe and Asia.

Ford CFO Lewis Booth said it was Ford’s best quarterly performance in six years and said Ford now expects the company will be “solidly profitable” this year. Until now, Ford had only said it expected to report a profit in 2010.

Booth said Ford’s gains in market share in the U.S. in Europe, fueled by new product introductions, as well as a reduced cost structure are all contributing to Ford’s performance.

From: http://www.freep.com/article/20100427/BUSINESS0102/100427010/Ford-reports-2.08-billion-profit
_____________________________

The article doesn't mention Toyota's recall problems, but that had to help, too.

Made them look smarter than the average car company

That an American car company is once again profitable is good news, for sure.
However, if they continue to move the production facilities away from this country, the net gain for the U.S. is negative.
These profits deserve to be shared with an American workforce and not just the upper management.
I would certanily like to see a "solidly profitable" venture here, but I would also like see Ford, and the AAWU, work towards creating more opportunites for American workers.
Will Ford take a lead in restoring American production or will Ford join the ranks of so many other "American" companies that have made their fortunes on the backs of laid-off AMerican workers and low-paid foreign substitutes?
The American workforce as a whole owes plenty to the AAWU and other once-thriving unions. That message needs to be reinforced before we're all working seven days plus with no benefits.

In a quick search for Ford facilities, I came across this Wiki listing which should put to rest any notion of truly "buying American".
http://en.wikipedia.org/wiki/List_of_Ford_factories

I blame the Fabulous Fab.

At the risk of beating a dead horse, let me reiterate my central thesis with respect to currency valuation: just as it is always better to be rich than to be poor, it is always better to have a strong currency than a weak one. Although this simple maxim puts me into conflict with much of the economic establishment, I hold its truth to be...well...self-evident.

While I attended an economic conference last week in Shanghai, I found it notable - but not surprising - that two former Secretaries of the Treasury, John Snow and Hank Paulson, as well as current Treasury Secretary Tim Geither, and former President George W. Bush were then in the country at the same time. The fact that so many key American power brokers were in China simultaneously was no coincidence. In an overly indebted world, the $2.5 trillion that China holds in foreign reserves is acting as a center of economic gravity, inexorably pulling all market participants into its orbit.

The effect of current Chinese currency policy (which, despite Beijing's protests to the contrary, is manipulation pure and simple) is to make the US dollar more valuable and the yuan less valuable. As a result, the benefits of manipulation accrue to Americans, not the Chinese. We get pay raises; they get pay cuts. Americans use their stronger dollars to buy products they would otherwise not have been able to afford. On the flip side, the Chinese people do without products that they otherwise would have been able to afford had their government not transferred their purchasing power to us.

The same effect is experienced with interest rates. In order to manipulate the dollar's value higher, the Chinese government has gobbled up more than $1 trillion of them. The Chinese then loan the dollars back to the US through purchases of government and mortgage- backed debt, which reduces the cost of servicing our massive liabilities.

By the same token, if China were to stop manipulating the dollar higher, it would remove the props currently supporting our dysfunctional economy. American interest rates and consumer prices would soar, and our economy would suffer...perhaps dramatically so. Meanwhile, China would experience the opposite effect. Chinese consumer prices would fall, immediately raising living standards for average Chinese workers, whose higher real wages would finally allow them to fully enjoy the fruits of their labor.

What strikes me as particularly dangerous is that no one, not even the Chinese, appear to understand these fundamental dynamics. All of the Shanghainese with whom I spoke last week were unaware that a stronger yuan would be in their own best interest. The way most people see it, a stronger currency is a bullet that China must be prepared to take in order to save the rest of the world from further pain.

And so we watch the strange spectacle of China stubbornly resisting actions from which it would immediately and substantially benefit. In reality, an appreciating yuan is the bitter medicine Americans must swallow if our sick economy is ever to regain its health. (An allegorical explanation of this is contained in my new illustrated book, How an Economy Grows and Why it Crashes.)

When Beijing finally comes to it senses, the transition will be unavoidably disruptive. For China, the long-term growth would far outweigh the short-term shock. America, however, would face a much less certain outcome. There is no question that, for Americans, the immediate effects would be very painful, with the gains only developing with time and prudent decision-making. Still, that does not mean we should resist the process. For the longer it is delayed, the more severe the pain and the longer the road back to prosperity.

If you think China is important today, just wait a few years. For example, while the Chinese automobile market is now the largest in the world, 90% of Chinese car buyers pay cash. In contrast, only 15% of American car buyers do so. In other words, Chinese consumers can actually afford their cars, while most Americans cannot. Without huge car payments, Chinese consumers are in much better shape not only to trade up to newer cars in the future, but to purchase other products as well. This suggests huge future growth, not only in automobiles but also in other consumer products as well.

This eruption of consumer demand, made possible by pent-up savings, is creating historic opportunities for investors. When the Chinese start using their wealth to expand their own economy rather than to subsidize ours, infrastructure may well be a primary beneficiary.

Whenever the Chinese government decides to end the peg, the Chinese economy will benefit as a result. While as citizens we can hope that US leaders respond with the right policies to enable our economy to regain its former glory, as investors we should position ourselves to benefit from the more certain outcome.

Peter Schiff
for The Daily Reckoning: http://dailyreckoning.com/to-peg-or-not-to-peg/

kthxbai

Tansy is a regular correspondent--she's nobody's fool!

http://dailyreckoning.com/why-it-would-take-9-years-to-clear-the-current-housing-backlog/

At this point there are so many bank-owned foreclosed homes that it would take almost nine years to clear out the housing inventory. That time frame doesn’t even begin to take into consideration the additional homes that are likely to also enter the backlog while the current inventory of foreclosed homes gets cleared out.

According to The Wall Street Journal:

“How much should we worry about a new leg down in the housing market? If the number of foreclosed homes piling up at banks is any indication, there’s ample reason for concern.



“As of March, banks had an inventory of about 1.1 million foreclosed homes, up 20% from a year earlier, according to estimates from LPS Applied Analytics. Another 4.8 million mortgage holders were at least 60 days behind on their payments or in the foreclosure process, meaning their homes were well on their way to the inventory pile. That “shadow inventory” was up 30% from a year earlier.

“Based on the rate at which banks have been selling those foreclosed homes over the past few months, all that inventory, real and shadow, would take 103 months to unload. That’s nearly nine years.”

As we already know, this predicament already includes the government programs at work to artificially improve the situation. For example, the Home Affordable Modification Program, or HAMP, was shown a recent report from the Special Inspector General for the Troubled Asset Relief Program to be operating because, “supporting home prices is an explicit policy goal of the Government.” When this support slows down, and stops altogether, the foreclosed inventory could end up taking a lot longer than nine years to clear out.

See more details in The Wall Street Journal’s coverage of the 103 months it will take to clear housing inventory:

http://blogs.wsj.com/economics/2010/04/24/number-of-the-week-103-months-to-clear-housing-inventory/

http://dailyreckoning.com/greek-debt-crisis-worse-and-getting-worser/



Greek short-term financing costs have nearly doubled in the last week alone, and they’re still soaring today… The 2-year note is up to 14% as we write.

Pakistan can sell its debt for a lower rate than the Greeks (12.2% this morning).

“This will be the biggest story of 2010,” notes our macro adviser Rob Parenteau, “but Wall Street economists and investment analysts will be the last to really get it. The European Monetary Union had several design flaws from the get-go.

“We presume the path of least resistance will be a maxi-depreciation of the euro, on the order of another 20-30% decline in the exchange rate of the euro.”

Say again: A 20-30% euro crash.

“It begins, but does not end, with Greece (actually, it began with Latvia and Ireland, but that is another story). Band-Aids to save Greece, no matter how graciously offered by the legitimately concerned German politicians, cannot and will not paper over the cracks in the rest of the peripheral eurozone nations – which we will refer to as the GIIPS, since that seems to be the more politically correct version of the more porcine moniker.

“The math of the fiscal balances in the GIIPS is such that partial default or partial public debt renegotiation is all but inevitable. We would not touch GIIPS’ public debt until this becomes evident to more professional investors and until the potential haircuts (principal reductions) can be plausibly quantified.

“All else on the way to public debt default is shadowboxing, mostly for public political consumption only. IMF or eurozone loans or fiscal assistance only accomplish the extend-and-pretend wash/rinse/repeat cycle we have seen policymakers turn to one too many times during the recent financial and economic crisis.”

http://us1.institutionalriskanalytics.com/pub/IRAMain.asp


"A speculator is a man who observes the future and acts before it occurs."

Bernard Baruch
The Public Years
Holt, Reinhart and Winston (1960)

Last week, as the media feeding frenzy surrounding the disclosures about Goldman Sachs (GS) and Paulson & Co reached a fever pitch, we started to reflect on how the confluence of politics and finance often produces some very strange results. In particular, we saw once again how the efforts in the 1980s and 1990s to deregulate Wall Street created extraordinary risks for all concerned, bankers, traders and investors.

We all seem to suffer from a common, self-inflicted wound that can be summed up simply as a lack of trust. The lack of trust, in our view, stems from the breakdown in the rules which once governed and also limited the actors in the world of finance, particularly the rules regarding the creation and sale of securities. Banks, funds and the rating agencies all share the blame, but none more than the politicians in Washington and in the Congress who enabled this mess. Remember that as you watch the hearings before the Senate Permanent Subcommittee on Investigations this week.

One senior media maven asked us if we thought that the disclosure about GS selling securities to one client while enabling another, namely Paulson & Co, to sell the same securities short would damage the ability of Buy Side clients to trust GS. Our initial response was no.

In our experience, Buy Side investors today don't do business with GS or the other major Sell Side firms because they trust them. They do business with firms like GS because they believe that the firm has better access to information than do the other dealers in the marketplace. The sad fact is that the trust that once made firms like GS and the old JP Morgan & Co special has long since been lost, leaving the marketplace that remains a hideous, barbaric place that is bereft of honor -- and a source of infinite risk to the participants.

The reputation of GS as a firm for being smarter and better informed that the larger firms on Wall Street goes back many decades, to the turn of the last century when Wall Street was run by the white shoe securities firms in Boston, Philadelphia and New York. In those days, firms like GS and others which occupied the lower rungs of the Wall Street food chain had to be smarter than everyone else as a basic matter of survival. And in those days, GS protected and nurtured each client relationship because the trust that these clients put in the firm were considered to be a precious asset.

Through the 20th Century, GS grew and it gained a reputation not as a trading firm first and foremost, but as trusted investment advisers and bankers. The best example of this was Sidney J. Weinberg, the great GS partner who earned the label of "Mr. Wall Street" and was the successor to the mantle of Bernard Baruch, the self described speculator who helped the US manage the logistics of fighting two world wars. Weinberg served on dozens of corporate boards and was a confidant of political and business leaders all over the world. Known for his diligence and attention to detail, Weinberg made his clients' interests his own, and on that basis won their trust and their enduring friendship.

Weinberg knew how to give clients good advice and how to keep secrets. If you were a banking client of Sidney Weinberg, there was no question about whether the entire firm was working in your best interests -- including the trading desk. The esteem and trust that Weinberg held on and off Wall Street was such that he could operate in any venue, any office or corporate suite, and never be seen as a source of risk or potential scandal. GS CEO Lloyd Blankfein should ponder that example on the way to Washington this week...

http://www.angrybearblog.com/2009/09/norman-borlaug-michael-jackson-and.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+blogspot%2FHzoh+%28Angry+Bear%29

FROM AUGUST


When Adam Smith described the concept of laissez-faire capitalism, he argued that it was not just efficient but moral. As long as everyone acted in their own self-interest and the government did not interfere, the Invisible Hand would guide market forces toward the best possible outcome for society. Its generally accepted that this doesn't always work in the presence of externalities; someone (i.e., government) has to be there to ensure that people don't exercise their right to swing their fist beyond the start of other people's noses.

But there is another problem which seems to be less highly recognized, namely that the whole concept of the Invisible Hand itself is bull$#^&. As an example, I'm writing this a few minutes after reading about the death of Norman Borlaug. He was a Nobel Laureate who developed disease-resistant and fast growing crops. Depending on who you ask, his work saved the lives of somewhere between a quarter of a billion and a billion people. So far. If we don't all die in some sort of cataclysm in the next fifteen minutes, that number will only grow.

Now consider another person recently deceased - Michael Jackson. I believe Jackson was finally buried some time last week. Aside from being known the world over, Jackson was very wealthy, despite his clear incompetence with money. He probably made at least one dollar for every life saved by Norman Borlaug, so far. Norman Borlaug, on the other hand, to the best of my knowledge, did not. Furthermore, this discrepancy in income is very, very, very hard to attribute to government interference.

Which means, there are two possible alternatives:

1. Michael Jackson did more positive things for the world than Norman Borlaug.
2. Michael Jackson did less positive things for the world than Norman Borlaug.

There is no third option. None. Now, I think very, very few people, even die-hard Michael Jackson fans, when presented with numbers like "a quarter of a billion lives saved so far" would agree with option 1. Which leaves option 2. And if option 2, then the Invisible Hand is bull$#^&. Which means capitalism doesn't work or is immoral. That does not imply any other philosophical system would work better, mind you, but trusting the market to do its thing provides perverse results.

If the author had named someone who had promoted the opportunity for women to take control of their own fertility, then I would say there's an argument to be made.

But there's a reason we have long debated what we now call in shorthand: The Prime Directive.

When you actively change a dynamic system to the tune of one quarter of a billion added stressors, the system will compensate somewhere along the line. That's an undeniable fact. In this case, Borlaug's intervention has lead to more consumption, more pollution, corroded resources and so on. It may have improved the quality of life for some but, in the end, the piper will still need to be paid. Borlaug simply forestalled the inevitable. And in the process created the potential for more extreme suffering for even more people.

A parallel can be drawn between his "achievement" and what the Government is trying to do with our economy. Introducing artificial props that keep this quarters markets "healthy" while ignoring the potential for creating more complicated and intractable damage to the economy at large.

Sociology and Anthropology are rife with examples of the Law of Unintended Consequences.

Feeding people is good. Saving people is good. Doing those things to the point where they will ultimately become unsustainable and ultimately compound the damage? Not Good.

But I make no claims as to the wisdom of choosing any action. Or in refusing to choose, still making a choice.

http://www.nakedcapitalism.com/2009/09/financial-reform-not-happening-but-the-need-is-clear.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

...You have just come from your annual medical checkup, where your doctor assures you that you are in robust health.

Walking jauntily down the street, you bump into a practitioner of alternative medicine. He takes one look at you and declares “You have a serious tumour! It must be removed or you will die”.

You ignore him as you always have, and continue your merry way down the street. One day later, a stabbing pain suddenly cripples you, and you collapse to the pavement.

In agony, your call your doctor, who initially refuses to send an ambulance because he knows you are well.

When you lapse into a coma and stop talking mid-sentence, your doctor concludes that perhaps something is wrong, and sends an ambulance to take you to hospital.

Initially the doctor waits for you to revive spontaneously, because he still knows there’s nothing really wrong with you. But as your pulse starts to weaken, he reluctantly calls a retired doctor who had experience of a similar inexplicable malady in the distant past.

She prescribes massive doses of tranquilisers, painkillers, vitamins, and oxygen—all substances that had been removed from the medical panoply due to recent advances in medical theory. Reluctantly, your doctor follows his retired colleague’s advice—and miraculously, you start to revive.

After a year of expensive medical treatment, you return to the same robust health you displayed before your inexplicable illness. Triumphant, if somewhat puzzled, your doctor declares you well once more, and releases you from intensive care.

As you stride confidently away from the hospital, you have the misfortune to once again bump into the practitioner of alternative medicine.

“But they haven’t removed the tumour!”, he declares.

…

One shouldn’t have to spell out the details of such an analogy, but in times of widespread denial, one has to:

* You are the economy;
* The tumour is a massive accumulation of private debt;
* Your doctor is Neoclassical Economics, and the retired colleague is a so-called “Keynesian” Economist — who doesn’t know it, since her medical textbooks were poorly written, but he’s actually following another economist called Paul Samuelson, not Keynes (and your doctor’s textbooks are so bad they don’t warrant discussion)

For the End of this story:

http://www.debtdeflation.com/blogs/2009/09/15/it%E2%80%99s-hard-being-a-bear-part-four-good-economic-theory/

who cheer every blip and P.R. release claiming "recovery" is here. So far what I've seen is like putting a Barney Bandaid over a festering gangrenous infection and declaring it's "all better."

Giant deep sea jellyfish filmed in Gulf of Mexico
http://news.bbc.co.uk/earth/hi/earth_news/newsid_8638000/8638527.stm


;-)

maybe that will put an end to the oil speculation "summer driving spree price spike to $4/gal." meme and business plan.

Like what happened last time, ahem, "financial regulation" was, ahem, under formal discussion.

Frontrunning algorithms also able to be switched so as to drive prices down?