STOCK MARKET WATCH, Monday May 24

Source: du

STOCK MARKET WATCH, Monday May 24, 2010

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Euro, Yen, Loonie, Silver and Gold

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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

10:00 Existing Home Sales Apr
Briefing.com 5.7M
Consensus 5.65M
Prior 5.4M

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

SINGAPORE – Oil prices rose to near $71 a barrel Monday in Asia as recovering stock markets bolstered the confidence of crude traders.

Benchmark crude for July delivery was up 87 cents to $70.91 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost 76 cents to settle at $70.04 on Friday.

Crude has fallen about 20 percent from $87.15 earlier this month as investor concern about Europe's debt crisis hammered global stocks and the euro. Oil is up from as low as $64.24 a barrel last week as the euro steadied.

In other Nymex trading in June contracts, heating oil rose 1.34 cent to $1.911 a gallon, and gasoline gained 1.37 cent to $1.975 a gallon. Natural gas was up 1.3 cent at $4.05 per 1,000 cubic feet.

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

(Reuters) - U.S. crude oil rose above $70 a barrel on Monday, recouping some of last week's losses, but analysts said sentiment remained fragile and prices could be again be hit by macroeconomic pessimism.

European stocks rose in early trade, following on from gains in Asia. Oil's gain defied a stronger U.S. dollar, which makes the commodity more expensive for holders of other currencies.

Germany's parliament approved on Friday its portion of a $1 trillion safety net to stabilize the euro as fears swirled that Europe's debt crisis and tougher financial regulation may choke economic recovery.

However, worries persisted that Greece's debt troubles could spread to other indebted nations, weakening Europe's economy and curtailing trade to the United States and Asia.

http://www.reuters.com/article/idUSTRE6142V820100524?type=ousivMolt

What an amazing concept, a platinum-plated phrase! Otherwise known as "Reality"?

:donut: :donut: :donut:
I am sorry to have been on the WEE merely long enough to make a rec (#8, I think) - from being swamped over the weekend with extracurricular school activities. Please post any notable news. Monday morning looks like a slow news day.

Anyway - the last week of school is about to start. So I must leave. Enjoy your day, I hope.

:hi:

School winding down and Hubby's Guru is here. We had a blessing of the sitars and students this weekend. It was good to see everyone, but my weekend was shot. Glad to have a few days off. I will be doing summer school this year so it will be a good year.

of gunk off the beach? How many sand-pails in a barrel? It's probably a lot, huh?

BERLIN/BRUSSELS (Reuters) – Germany's parliament approved on Friday a $1 trillion safety net to stabilize the euro as fears swirled that Europe's debt crisis and tougher financial regulation may choke economic recovery.

European Union finance ministers, meeting in Brussels, backed a German call for tougher sanctions in future against states that flout the bloc's budget rules, to prevent any repeat of Greece's debt crisis, which required a euro zone/IMF bailout.

Worries persisted that Greece's debt troubles would spread to other indebted nations, dragging down Europe's economy and curtailing trade to the United States and Asia.

Merkel said the parliamentary vote was a clear German message of support for Europe. But she failed to secure the broad backing she sought to ease public hostility to bailing out weaker euro zone states, despite unilaterally banning speculative trade in some financial instruments on Wednesday.

The surprise German ban on naked short-selling of sovereign euro bonds and some financial shares sent stocks and the euro plunging this week and drew sharp criticism from EU partners, including close ally France, which were not consulted.

http://news.yahoo.com/s/nm/20100523/bs_nm/us_eurozone

LONDON (Reuters) – World stocks recovered some composure on Monday with emerging markets leading the way after a late Friday rally in banking shares on Wall Street ended what was otherwise a dismal week for equities investors.

The euro gave back some of the gains it managed at the end of last week and was lower against the dollar.

European trading was thin due to a religious holiday, but most markets were open. The FTSEurofirst 300 (.FTEU3) was up 0.8 percent.

"There's some value-searching going on, even before the last correction the market wasn't over-priced, and investors are starting to realize there's some value to be had," said Richard Hunter, head of equities at Hargreaves Lansdown.

Equity markets have been battered recently, first by a fear that some European countries, notably Greece, were heading for a default on their sovereign debt and then about the impact of a debt rescue package on growth prospects.

http://news.yahoo.com/s/nm/20100524/bs_nm/us_markets_global

Jeez, I would hate to see things when they get upset.

the question is when. the sooner it happens, the sooner it can get cleaned up. The longer it takes, the more lingering the pain of going down, unwinding, and climbing back out of the crater.

:donut:

SINGAPORE – Asian stock markets were mostly higher Monday, led by China, as investors took heart from a late rally on Wall Street. European shares were mixed.
As trading got started in Europe, Britain's FTSE 100 fell 0.3 percent, Germany's DAX index lost 0.4 percent amid a renewed dive in the euro while France's CAC-40 advanced 0.4 percent. Futures pointed to modest losses Monday on Wall Street.

Earlier in Asia, China's Shanghai Composite index jumped 3.5 percent to 2,673.42 as jitters of tighter credit policies eased amid mounting hopes for the yuan to appreciate. Australia's S&P/ASX 200 added 2.1 percent to 4,395.40 and Hong Kong's Hang Seng gained 0.6 percent to 19,663.66.

Chinese President Hu Jintao on Monday promised more reforms of his country's fixed yuan exchange rate but gave no timetable. Hu spoke amid a two-day meeting with U.S. officials including Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner.

Japan's Nikkei 225 stock average dropped 26.14 points, or 0.3 percent, to 9,758.40 while Thailand's benchmark index fell 2.3 percent with investors cautious after the worst political violence in the Thai capital in decades last week.

http://news.yahoo.com/s/ap/20100524/ap_on_bi_ge/world_markets

The Senate on Thursday approved a far-reaching financial regulatory bill, 59 to 39. Democratic Congressional leaders and the Obama administration must now reconcile it with the House bill that was passed in December.

http://www.nytimes.com/interactive/2010/05/20/business/20100520-regulation-graphic.html

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This is a really good graphic that shows the differences between the House and Senate bills.

(Up a lot. Have a good morning.)

(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat. I'm stunned over the loss of John Herbst.)
= Held by the Public + Intragovernmental(FICA)
= 8,476,842,609,085.10 + 4,510,980,063,343.92
UP 10,103,129,083.31 + UP 2,427,215,777.74

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 309,307,562 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 $41,989.99.
A family of three owes $125,969.98. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 5,298,500,312.37.
The average for the last 30 days would be 3,885,566,895.74.

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$/day.
There were 159 reports in 232 days of FY2010 averaging 6.78B$ per report, 4.65B$/day.
Above line should be okay

PROJECTION:
There are 976 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
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)
05/20/2010 12,987,822,672,429.02 BHO (UP 2,360,945,623,515.94 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 +1,077,993,668,917.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,695,981,418,770.75 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/29/2010 -019,519,315,418.04 -
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********
05/13/2010 +003,301,759,550.17 ------------*********
05/14/2010 -000,440,383,687.55 ---
05/18/2010 +000,360,533,772.20 ------------******** Tue
05/19/2010 +000,208,812,715.15 ------------********
05/20/2010 +010,103,129,083.31 ------------**********

75,246,338,764.90 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=4391525&mesg_id=4391549

(Up a little. 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)
= 8,477,106,002,143.38 + 4,510,690,839,193.13
UP 263,393,058.28 + DOWN 289,224,150.79

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 309,314,208 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 $41,989.01.
A family of three owes $125,967.02. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 5,558,305,493.17.
The average for the last 30 days would be 4,076,090,694.99.

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$/day.
There were 160 reports in 233 days of FY2010 averaging 6.74B$ per report, 4.63B$/day.
Above line should be okay

PROJECTION:
There are 975 days remaining in this Obama 1st term.
By that time the debt could be between 14.3 and 18.0T$.
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)
05/21/2010 12,987,796,841,336.51 BHO (UP 2,360,919,792,423.43 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 +1,077,967,837,824.80 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof10 +1,688,662,063,545.29 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/30/2010 +098,427,087,705.17 ------------**********
05/03/2010 -004,329,381,263.93 -- Mon
05/04/2010 +000,043,170,775.25 ------------*******
05/05/2010 +000,598,834,211.91 ------------********
05/06/2010 -014,947,673,650.95 -
05/07/2010 +000,000,195,077.74 ------------*****
05/10/2010 +000,804,647,162.22 ------------******** Mon
05/11/2010 -000,148,047,510.67 ---
05/12/2010 +000,782,970,242.92 ------------********
05/13/2010 +003,301,759,550.17 ------------*********
05/14/2010 -000,440,383,687.55 ---
05/18/2010 +000,360,533,772.20 ------------******** Tue
05/19/2010 +000,208,812,715.15 ------------********
05/20/2010 +010,103,129,083.31 ------------**********
05/21/2010 +000,263,393,058.28 ------------********

95,029,047,241.22 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=4395200&mesg_id=4395217

Corporate bond sales are poised for their worst month in a decade, while relative yields are rising the most since Lehman Brothers Holdings Inc.’s collapse, as the response by lawmakers to Europe’s sovereign debt crisis fails to inspire investor confidence.

Companies have issued $47 billion of debt in May, down from $183 billion in April and the least since December 1999, data compiled by Bloomberg show. The extra yield investors demand to hold company debt rather than benchmark government securities is headed for the biggest monthly increase since October 2008, Bank of America Merrill Lynch’s Global Broad Market index shows.

Investors are fleeing all but the safest securities on concern European leaders won’t be able to coordinate a response to rising levels of government debt from Greece to Spain, while U.S. legislation threatens to curb credit and hurt bank profits. The rate banks say they charge each other for three-month loans in dollars has almost doubled since February.

Yields on corporate bonds average 188 basis points more than government debt, up from the low this year of 142 on April 21, Bank of America Merrill Lynch’s index shows. The last time spreads widened faster was October 2008, when they soared 108 basis points, or 1.08 percentage point, to 467.

http://preview.bloomberg.com/news/2010-05-23/libor-shows-strains-sales-evaporate-yield-premiums-soar-credit-markets.html

It was a benchmark rate for US adjustable rate mortgages, so a rise in Libor would boost US mortgage payments and lead to more defaults.

But most of the ARMs should have self-destructed already.

And corporate debt securitization is at a standstill.

Does Libor matter so much to the US?

Libor’s slow grind higher

http://ftalphaville.ft.com/blog/2010/05/24/240876/libors-slow-grind-higher/

The gist is that if financial reform in the US and sovereign debt problems in Europe take the Libor participants out of the "too big to fail" category, then Libor is not close to "risk free" and the rate needs to be higher.

What all of this means is that the nature of assumed government support to the large banks, will become more narrowly interpreted to mean only support for FDIC insured deposits. All other creditors will need to figure out where they stand in the queue in the event of failure at a large firm. This should cause a significant amount of thinking and reassessment at the various lenders to banks (money market funds, other banks etc.), especially about due-diligence, as well as the right price for short-dated credit risk.

This makes a lot of sense -- why should the US taxpayer guarantee a bank's obligations in London.

On Monday, the April Chicago Fed National Activity Index will be released at 8:30 AM. This is a composite index of other data. At 10 AM the National Association for Realtors (NAR) will release the April existing home sales report. The consensus is for an increase to 5.6 million sales in April as a seasonally adjusted annual rate (SAAR). Also on Monday, the DOT will probably release the Vehicle Miles Driven for March. This has been showing declining Year-over-year miles driven.

On Tuesday, the March Case-Shiller house price index will be released at 9:00 AM. The consensus is for a slight decline in the house price index. At 10:00 AM, the Conference Board will release Consumer Confidence for May (consensus is for an increase to 59). Also on Tuesday, the FHFA house price index, and the Richmond Fed survey will be released.

On Wednesday, the April Durable Goods Orders will be released at 8:30 AM.

http://www.calculatedriskblog.com/2010/05/weekly-summary-and-look-ahead_23.html

In all the haste last weekend, I never saw the end of the market's chart on Friday. That's a pretty blatant signal of manipulation.

And all so oil could be pushed above $70, so the Saudis would stop bitching, no doubt.

How many idiots does it take to destroy a world?

Not that many.

How many sane people does it take to stop them?

We don't have enough to find out.


Now THERE'S some economic pessimism for you!

All of that you said. Now I gotta run. :hi:

It's "fools" not Phools. they sound alike, but they aren't.

-Chief Inspector Dreyfus in A Shot in the Dark

www.youtube.com/watch?v=bMMV_RoEMxE

I don't want to set the world on fire
I just want to start a flame in your heart

In my heart I have but one desire
And that one is you
No other will do

I've lost all ambition for worldly acclaim
I just want to be the one you love

And with your admission that you feel the same
I'll have reached the goal I'm dreaming of

Believe me

I don't want to set the world on fire
I just want to start a flame in your heart

you name it. The ones we think will fight keep rolling over on us.

If he does it right? Only one.

China has made progress in rebalancing its economy towards domestic consumption and away from exports even though its currency remains pegged to the dollar, Tim Geithner, US Treasury secretary, said as he prepared for the start of the annual US-China summit
Read more >>
http://link.ft.com/r/H60H77/405FRQ/204L2/0GM9SV/EWY9K9/FW/t



Watch how Timmy's fingers never leave his hand....

The greenback’s continued rise against the euro and other main currencies could take its toll on US-based multinationals’ earnings in spite of efforts to blunt the effects through hedging
Read more >>
http://link.ft.com/r/M2ZOXX/QFHM88/06MUC/EWRG8W/BMXI70/PJ/t


US-based multinationals....the privateers of this century and the scourge of seven seas.

:thumbsup:

The Bank of Spain at the weekend seized control of CajaSur, an ailing savings bank controlled by the Catholic church, after it failed to reach an agreement on a merger with Unicaja, another savings bank
Read more >>
http://link.ft.com/r/M2ZOXX/QFHM88/06MUC/EWRG8W/PRPTJS/PJ/t

Haven't they learned the lesson of Vatican Bank?

http://preview.bloomberg.com/news/2010-05-20/more-americans-unexpectedly-file-claims-for-jobless-benefits.html

More Americans unexpectedly filed applications for unemployment benefits last week, showing firings remain elevated even as employment climbs.

Initial jobless claims rose by 25,000 to 471,000 in the week ended May 15, exceeding the median forecast of economists surveyed by Bloomberg News and the highest level in a month, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance and those getting extended payments fell.

Some companies are trimming payrolls to boost or maintain profits, even as employers have added jobs each month this year. Unemployment may take time to recede as more jobseekers enter the workforce and fail to find work.

“Claims remain uncomfortably high,” Aaron Smith, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “The improvement in continuing claims has slowed noticeably.”

Applications were projected to drop to 440,000 from 444,000 initially reported for the prior week, according to the median forecast of 44 economists in a Bloomberg survey. Estimates ranged from 425,000 to 448,000. The Labor Department revised the prior week’s figure up to 446,000.

There were no special factors behind the jump in claims last week, a Labor Department spokesman said.

The four-week moving average, a less volatile measure than the weekly figures, climbed to 453,500 last week from 450,500, today’s report showed.

Benefit Rolls

The number of people continuing to receive jobless benefits fell by 40,000 in the week ended May 8 to 4.63 million. They were forecast to drop to 4.61 million.

The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 73,000 to 5.34 million in the week ended May 1.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.6 percent in the week ended May 8.

Eighteen states and territories reported a decrease in claims, while 35 reported an increase. These data are reported with a one-week lag.

Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates. That relationship has broken down in recent months as some companies continue to cut staff, while others expand, pointing to an uneven recovery.

Payrolls Jump

Payrolls increased by 290,000 in April, the most in four years, according to figures from the Labor Department this month. Unemployment climbed to 9.9 percent from 9.7 percent as thousands of jobseekers entered the workforce.

Companies such as H&R Block Inc. are cutting jobs. The biggest U.S. tax preparer said yesterday about 400 positions are being eliminated throughout the organization as it realigns its field and corporate support organization. The Kansas City, Missouri-based company has closed about 400 under-performing tax offices out of its network of 11,000 retail tax locations.

Other employers have expanded payrolls on stronger demand. Caterpillar Inc., the world’s biggest construction equipment maker, expects sales to increase this year as exports rebound, Chief Executive Officer Jim Owens said May 5. The company said last month it has added about 1,500 jobs since year-end because of higher production volume, including 600 in the U.S.

http://www.economicpolicyjournal.com/2010/05/32-states-have-borrowed-from-treasury.html

32 states have run out funds to make unemployment benefit payments and that the federal government has been supplying these states with funds so that they can make their payments to the unemployed. In some cases, states have borrowed billions. As of May 20, the total balance outstanding by 32 states (and the Virgin Islands) is $37.8 billion.

The state of California has borrowed $6.9 billion. Michigan has borrowed $3.9 billion, Illinois $2.2 billion.

Below is the full list of the 32 states (and the Virgin Islands) that have borrowed from the federal government to make unemployment payments, and the amounts that remain borrowed as of May 20 .


Alabama $ 283 million
Arkansas 330 million
California 6.9 billion
Colorado 253 million
Connecticut 498 million
Delaware 12 million
Florida 1.6 billion
Georgia 416 million
Idaho 202 million
Illinois 2.2 billion
Indiana 1.7 billion
Kansas 88 million
Kentucky 795 million
Maryland 133 million
Mass. 387 million
Michigan 3.9 billion
Minnesota 477 million
Missouri 722 million
Nevada 397 million
New Jersey 1.7 billion
New York 3.2 billion
N.C. 2.1 billion
Ohio 2.3 billion
Penn. 3.0 billion
R.I. 225 million
S.C. 886 million
S.D. 24 million
Tennessee 21 million
Texas 1.0 billion
Vermont 33 million
Virginia 346 million
Virgin Islands 13 million
Wisconsin 1.4 billion
Total $37.8 billion

http://www.dailykos.com/storyonly/2010/5/18/867517/-A-perfect-storm-for-unemployment-in-June

While there is plenty of talk about the economic recovery, there is barely a whisper about what is just a few weeks ahead. It's not any one thing. It's a combination of three (and possibly four) different events that will deliver devastating body-blows to the economy.

They are all being talked about, but no one that I've seen has put them all together.

That's where I come in, the doom-and-gloomer, with the news that no one wants to think about, but you are better off knowing now rather than later.

Losing the lifeline

It's been well-reported that unemployment benefits can last for 99 weeks (aka the 99'ers). What has been almost completely lacking in the news coverage is that June 2nd is the drop-dead date for unemployment extensions.

On April 12, 2010, Senator Sherrod Brown of Ohio attempted the impossible and "urged an extension on unemployment insurance". At that time, Senator Brown also stated, "Many of my colleagues had no problem giving tax breaks to companies that shipped jobs overseas, but now balk at extending unemployment insurance."

Currently there are four "Tiers" of extended unemployment insurance. If you were laid off early in the recession then you were eligible for the full 99 weeks. But let's say you were laid off in the spring of 2009 and you are on Tier Three of the emergency extended benefits that runs out in July.
If you are in that boat then you are sh*t out of luck. The only way you are eligible for Tier Four is if your benefits expire before the end of May.

This applies to all tiers. Thus if you were laid off only, say, 24 weeks ago, you aren't eligible for any federal unemployment benefits when the state UI expires after 26 weeks. Not even Tier One.
Currently the average duration on unemployment is 8 months. That's going to effect around 7 million people.

This means that literally millions of long-term unemployed are going to be losing their last lifeline in the coming months.

More than 400,000 jobless workers could run down their federal benefits each month over the next several months, even assuming that Congress continues to renew the expanded benefit period now in place.

There is some proposals for moving the deadline out for a few months, but nothing concrete at this time with only a week to go before the clock strikes midnight.

As for those who have actually used up the full 99 weeks of UI, there is almost no hope of a Tier Five being created...

GRAPHIC PORN AT LINK AND MORE DEVELOPMENT OF THE THEME

About 1.2 million jobless workers could be "cut off" from federal unemployment benefits next month if Congress does not pass an extension soon, according to a statement released Monday by the National Employment Law Project

Source http://www.marketwatch.com/story/12-million-unemployed-may-lose-federal-benefits-2010-05-24

Then there is a AP/CBS story: Economists forecast the pace of U.S. growth to pick up in the year ahead as consumers and businesses alike accelerate spending, according to a new survey.

Posted at http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4395546

The truth is they talking heads know what is coming but cannot bring themselves to speak of it.

Because graph porn could be interesting....the other two, not so much.

Monday is the cruelest day....

(similar-sized economies) had to similarly borrow in order to cover unemployment benefits...

the many teachers and school support staff who will be pink-slipped as states, counties, cities, and school districts trim budgets prior to the start of school in the fall. Two schools in my district are closing at the end of this school year (declining enrollment is cited as the cause), and while some teachers may be absorbed into other schools I'm sure they all won't be, along with custodians, aides, secretaries, bus drivers, etc.


Tansy Gold

http://blog.ml-implode.com/2010/05/one-in-ten-mortgage-borrowers-will-lose-their-home-to-the-bank/

About the Author

Michael White is the CEO of The New Mortgage Company. He has seventeen years in real estate as lender, owner, and mortgage originator. He has purchased and sold more than 275 properties for his own account, made hundreds of real estate loans for his portfolio, and originated hundreds of mortgages as a broker.

----------------------------
New Observations is forecasting that a minimum of one in ten homes with a mortgage today will be lost to foreclosure in the next two years and that this loss represents a staggering five-million-unit addition to inventory-for-sale.

A record high 4.63% of mortgages were in foreclosure at the end of March The Mortgage Bankers Association reported Wednesday. Much worse, a mammoth 9.54% of mortgages are 90-days or more past due.

Given cure rates are slim-to-nothing-at-all beyond a 60-day delinquency, in practical terms, all of these seriously-delinquent homes will be lost through a sheriff’s auction, a short sale, a deed-in-lieu passing title from borrower to bank, or some other variant of distressed sale. Amherst Securities Group in a Sept. 2009 report said of the cure rate: “The cure rate on 60+ loans has decreased from 66% in early 2005 to 5% in Q2 2009.”

What is obvious and apparent from the cure-rate chart (see LINK a clear view) is that borrowers who miss a payment are giving up quickly. After two payments are missed, the mortgage is a goner. It’s a new phenomena and adds a serious risk of falling prices for those who currently own homes.

If 50 million homes carry a mortgage, and with 10 percent lost to the bank in the next two years, five million units will be added to the current for-sale inventory. The five million bank-repo homes works out to about 10 months of sales at an average rate. Amherst estimated 7 million liquidations to the bank, but it was unclear over what period of time. The numbers will have even a more exaggerated impact if mortgage-payment performance continues to fall.

Current inventory is at eight months. The recent inventory high was 11 months in April 2008. Our figures already show current supply for-sale at 3.6 million units – which we have estimated is excessive by over 900,000 units



In an average month 500,000 existing homes sell.

In another derogatory sign, purchase applications fell 27 percent to their lowest point since May 1997. A government-paid down-payment program ended April 30th.

The guesstimate that one-in-ten mortgage borrowers will lose their home is not a wild proclamation. It’s basic math based on the cure rate. What is wild is considering what will happen to real estate prices should mortgage failure gain greater momentum. Serious delinquencies are 30% greater today than a year ago.

A crash has the same irrational exuberance as a mania. We have already lost 30 percent of house prices nationwide. There is simply no question that a radical loss in value may still lie ahead. Mortgage performance has gone down hill, and only a strong employment recovery can change the math.

Declaring fiscal insolvency, city officials Wednesday persuaded a Superior Court judge to appoint a receiver to take over municipal finances, a process that could end up with new contracts imposed on the city’s unions and vendors.

Receivership is the state-law version of federal bankruptcy. The court-appointed receiver has the power to approve or reject purchases and payments and, if the court approves, change contracts with unions and vendors and hire and fire municipal employees.

City Solicitor John T. Gannon said the city is in the middle of all its municipal employee union contracts. Mayor Charles D. Moreau has been trying to negotiate concessions, he said, but without success.

Central Falls’ slogan is “A City with a Bright Future,” but the present has been pretty grim. Its high school, where 96 percent of its 800 students live in poverty, was targeted for a state-ordered reorganization because of consistently low scores and graduation rates. The entire teaching staff was threatened with dismissal until the administration and the teachers union reached an agreement last weekend.

In its petition to the court for appointment of the receiver, the city administration said it has an anticipated deficit this fiscal year of $3 million on a city budget of about $18 million and an anticipated deficit $5 million in the budget year beginning July 1. The officials said the shortfall could not be covered by austerity measures.

Beside the budget shortfall, the city’s pension fund for its police and fire retirees has $4 million, way short of its accrued liabilities of $35 million. Gannon said the city pays out $2.2 million a year in pension benefits from the fund.

In addition to unilateral cuts in pay and benefits enacted by the East Providence School Committee in January 2009, the city has also cut benefits for police officers and school custodians, laid off municipal custodians and threatened major changes in the firefighters’ contract. The Fire Department pact is in the midst of what may be a year-long arbitration...

http://www.projo.com/news/content/CENTRAL_FALLS_FINANCES_05-20-10_GQII8I0_v46.8c3a73f.html

http://www.informationclearinghouse.info/article25514.htm

The Obama Administration's move to the right is about to give conservatives a victory they could not have anticipated, even under Bush. HUD, under Obama, submitted legislation called PETRA to Congress that would result in the privatization of all public housing in America.

The new owners would charge ten percent above market rates to impoverished tenants, money that would be mostly paid by the US government (you and me, the taxpayers). To maintain the property, the new owners would take out a mortgage for building repair and maintenance (like a home equity loan), with no cap on interest rates.

With rents set above market rates, the mortgage risk would be attractive to banks. Either they make a huge profit on the mortgages paid for by the government. Or if the government lowers what it will pay for rents, the property goes into foreclosure. The banks get it and can sell it off to developers.

Sooner or later, the housing budget will be cut back and such foreclosures will happen. The structure of the proposal and the realities of Washington make it a virtual certainty.

The banks and developers make a fortune, with the taxpayers paying for it. The public loses its public housing property. The impoverished tenants lose their apartments, or have their rents go way up if they are forced into the private market. Homelessness increases. Government gets smaller. The banks and developers win. It is a Bank Bonanza! The poor and the public lose.

And a precedent is set. The government can privatize any public property: Schools, libraries, national parks, federal buildings -- just as has begun to happen in California, where the right-wing governor has started to auction off state property and has even suggested selling off the Supreme Court building.

The rich will get richer, the poor and public get poorer. And the very idea of the public good withers.

This is central to the conservative dream, in which there is no public good -- only private goods. And it is a nightmare for democracy.

-------------------------------------------

Stop PETRA. This is urgent. There is a hearing next Tuesday, May 25, before the House Financial Services Committee and the Subcommittee on Housing, organized by Rep. Maxine Waters. Phone: 202-225-2201. Fax: 202-225-7854.

see also:

http://www.gopetition.com/petitions/save-public-housing.html to sign a petition

and read further:

http://lacehh.wordpress.com/

http://www.informationclearinghouse.info/article25512.htm

A total of 775 banks, or one-tenth of all U.S. banks, were on the Federal Deposit Insurance Corp.'s list of "problem" institutions in the first quarter, as bad loans in the commercial real-estate market weighed on bank balance sheets.

Poor loan performance in other sectors also continued to hurt banks, with the total number of loans at least three months past due climbing for the 16th consecutive quarter, FDIC officials said in a briefing on Thursday.

"The banking system still has many problems to work through, and we cannot ignore the possibility of more financial market volatility," FDIC Chairman Sheila Bair said.

There were 702 on the FDIC's "problem" bank list at the end of 2009 and 252 at the end of 2008.

FDIC officials said they expected the number of failed banks to peak this year after climbing steadily over the past three years. Regulators have shut 72 banks so far this year, more than double the number closed by this time last year. Ms. Bair said regulators were preparing for a steady pace of additional closures through the end of the year. A total of 237 banks have failed since the beginning of 2008.

The failures continue to strain the FDIC's fund to protect consumer deposits, although officials signaled they were confident they had enough cash on hand to deal with the expected spate of failures, without having to assess new fees on the banking industry. The agency's deposit insurance fund stood at negative-$20.7 billion at the end of the first quarter, a slight improvement from the end of 2009.

"We have the necessary industry-funded resources to complete the cleanup," Ms. Bair said, in a reference to the fees that the agency assesses on banks for insuring their deposits.

Banks, squeezed by problem loans and the continued recession, responded by reducing their lending. The industry's total loan balances grew by 3% during the quarter, but the increase was due to accounting changes that required banks to bring securitized assets back onto their balance sheets. Without taking into account these accounting changes, lending would have declined for the seventh straight quarter, as banks cut back across most major lending categories.

"There is a lot of credit distress still in the mortgage-portfolio area," FDIC Chief Economist Richard Brown said at the FDIC briefing.

FDIC officials said they saw some signs for optimism. The total $18 billion, first-quarter profit reported by U.S. banks and thrifts was the highest since the first three months of 2008 and more than triple the profit recorded in the first quarter of last year. More than half of insured banks reported growth in net income during the quarter—the highest level in more than three years—and firms set aside less money to reserve for future losses.

The FDIC data suggested that the largest U.S. banks were faring better than their smaller rivals. The former enjoyed the largest year-over-year increase in earnings and saw the biggest reduction in loan-loss reserves, or the money they must set aside to account for future, expected losses on loans. Ms. Bair said the rate of decline in lending by larger banks also slowed in each of the past two quarters.

NO, I THINK YOU CAN LAY THIS BASTARD, FOUNDLING CHILD OF A DISASTER ON AMERICA'S DOORSTEP...


http://www.informationclearinghouse.info/article25516.htm

Deficits create demand. Demand generates spending. Spending generates economic activity. Economic activity generates growth. Growth generates jobs, increases government revenues, reduces deficits and ends recessions.

Simple, right?

When consumers have too much debt, they will not spend no matter how low interest rates are. This is not theory, this is fact.

If the government cuts spending at the same time as consumers, then overall spending declines and the economy slips into recession. This is what the deficit hawks want--a return to recession. This is politics, not economics.


KEYNE'S KOAN: Increasing the deficits, lowers the deficits

The deficit hawks say "You can't solve a debt problem by adding more debt". This is a very persuasive argument, but it's wrong. Increasing the deficits, lowers the deficits. This sounds wrong, but its right. Here's proof from a recent article by economist Marshall Auerback:

"Ireland began cutting back deficit spending in 2008, when its banking crisis began to spread and its budget deficit as a percentage of GDP was 7.3 per cent. The economy promptly contracted by 10 per cent and, surprise, surprise, the deficit exploded to 14.3 per cent of GDP." ("The US is not Greece", Marshall Auerback, counterpunch.org)

Ireland is not the exception. Ireland is the rule. A nation cannot starve itself to prosperity nor can it shrink its way to growth. Austerity is fine for monks, but bad for the economy.

Deficit cutting during a downturn creates bigger deficits, higher unemployment, greater economic contraction, and more suffering. Every country that follows the IMF's prescription for belt-tightening, undergoes a mini-Depression. That's because its bad economics (or, rather) politically-driven economics. By weakening the state, private industry and speculators hope to grab public assets on-the-cheap and force privatization of public services. These are the real objectives behind the austerity measures.

When the government is in surplus, the private sector must be in deficit. When the government is in deficit, the private sector must be in surplus. It's that simple. So, when consumers and households must save to make up for lost equity and falling revenue, (such as, after the collapse of the housing bubble) the government MUST increase deficits to keep the economy running, to reduce slack in demand and to lower high levels of unemployment. Without Obama's fiscal stimulus, the economy would not have produced 3 quarters of positive growth. The stimulus (and monetary policy) kept the economy from tipping into a severe recession. Had Obama followed the advice of the deficit hawks (many of who also supported Bush's wars in Iraq and Afghanistan) the country would be mired in another Great Depression. This is worth considering when some Fox bimbo in a plunging-neckline says "The stimulus did nothing."

Sovereign governments whose debts are paid in its own currency, are not like you and me. They are not fiscally constrained or required to balance their checkbook. Nor should they if it weakens the economy or increases unemployment. The government can spend without risk of going broke because the debt is owed to itself. Yes, this can create inflation when unemployment is low and there is too much money chasing too few goods. But that should not deter government from stimulating the economy when unemployment is 10%, underemployment is 20%, manufacturing is slow, housing is in a shambles, core CPI is below 1%, and the economy is teetering towards outright deflation. Deficits should be increased and sustained at a high level until unemployment and overcapacity begin to retreat. Economists know that consumer deleveraging is a long-term project, which means that government stimulus will be required for a very long time. Get used to it.

Last week, economist James Galbraith was interviewed by the Washington Post's Ezra Klein. Klein asked Galbraith if he thought "the danger posed by the long-term deficit is overstated by most economists?" Here's his answer:

James Galbraith:"I think the danger is zero. It's not overstated. It's completely misstated.

Ezra Klein--"Why?"

James Galbraith---"What is the nature of the danger? The only possible answer is that this larger deficit would cause a rise in the interest rate. Well, if the markets thought that was a serious risk, the rate on 20-year treasury bonds wouldn't be 4 percent and change now. If the markets thought that the interest rate would be forced up by funding difficulties 10 year from now, it would show up in the 20-year rate. That rate has actually been coming down in the wake of the European crisis.

So there are two possibilities here. One is the theory is wrong. The other is that the market isn't rational. And if the market isn't rational, there's no point in designing policy to accommodate the markets because you can't accommodate an irrational entity." (Washington Post)


Naturally, Galbraith's answer stirred up controversy at the Fox School of Economics where Andrew Mellon's photo is still proudly on display. But Galbraith is right. If the markets were really worried, then yields on long-term Treasuries would go up. But they're not going up, because the economy is still battling deflation. The 10-year Treasury is presently 3.4%, just as one would expect in a Depression. On Wednesday, core CPI came in at 1%. There is no inflation in the system. The inflation doomsters are discredited alarmists who should be ignored. The economy needs more stimulus, more government spending. Here's Galbraith again:


“To put the point firmly.... the economy is recovering because of the budget deficits. Without these budget deficits, there would be no recovery, because it is the deficits that are helping to put more money into households’ pockets. To talk of recovery but to criticize the deficits is ridiculous. The whole point of this thing is to add to the deficit. The patient is recovering from a deadly illness and yet the press is attacking the medicine....”

"The deficit and the public debt of the U.S. government can, should, must, and will increase in this crisis. They will increase whether the government acts or not. The choice is between an active program, running up debt while creating jobs and rebuilding America, or a passive program, running up debt because revenues collapse, because the population has to be maintained on the dole, and because the Treasury wishes, for no constructive reason, to rescue the big bankers and make them whole.” ("Galbraith: deficits are the solution not the problem", John Hanrahan, Nieman Watchdog)


Not all deficit spending is good. John Maynard Keynes never advocated bailing out underwater financial institutions run by crooks, and yet, that has been the essential Fed policy from Day 1. Keynes believed that markets were fundamentally unstable; that government had a role to play in smoothing out capitalism's excesses, reducing inequality and creating jobs. He also believed that slumps will last much longer than necessary if government does not intervene and stimulate demand.

The value of deficits depends on how the money is spent. The $700 billion TARP was largely wasted on financial institutions that should have been nationalized, broken up, and their toxic assets put up for auction. The $787 billion stimulus, on the other hand, was largely a success, because it provided urgently needed relief for the states, benefits for unemployed workers, tax cuts and infrastructure programs. Experts belief the stimulus increased employment by roughly 2 million workers and raised GDP by 1.5% to 2.5%. Stimulus is not a panacea, and no one ever said it was. It's an emergency blood-transfusion to get a sickly patient through a violent trauma. It did what it was designed to do, and it paid for itself via the uptick in economic activity and growth. Here's how Paul Krugman sums it up:

"...increasing government spending in a slump more or less pays for itself: it leads to higher output not just in the short run but in the long run, and therefore leads to higher revenue that very likely more than offsets the original expense." (Paul Krugman's blog, "The Conscience of a Liberal", New York Times).

Stimulus critics may want to memorize the Krugman quote. Or, maybe, this from the April 2010 IMF World Economic Outlook:

"Fiscal policy provided major support in response to the deep downturn, especially in advanced economies.....Fiscal balances have deteriorated, mainly because of falling revenue resulting from decreased real and financial activity. Fiscal stimulus has played a major role in stabilizing output but has contributed little to increases in public debt, which are especially large in advanced economies." (Found at Billy Blog, Bill Mitchell)

Repeat: Stimulus has "contributed little to increases in public debt." In other words, the giant deficits are not the result of stimulus (or so-called "profligate" public spending) but of "falling revenue" because the economy is still flat on its back. The message is simple; put people back to work, increase demand, restore public confidence, and spend more money. Now.


MELTDOWN IN THE EU: What happens when deficit hawks set policy

Global markets have plunged for more than a month, wiping out more than $5.3 trillion in total market value. Ostensibly, the catalyst was Greece's large deficits, but that's only part of the story. Under the terms of the Maastricht Treaty, (aka--the Treaty on European Union) EU countries are not allowed to exceed the treaty's 3% ceiling on fiscal deficits. The nonsensical treaty basically repeals the business cycle by edict. Are recessions forbidden, too?

Sanctimonious German bureaucrats and heads-of-state have taken up the cause of fiscal probity and turned a thoroughly-manageable matter into a full-blown crisis that could break up the EU and drag the world back into deep recession. Keep in mind, Germany has been the main beneficiary of Greek deficits as reflected in their bulging surpluses. One does not exist without the other; and as Keynes pointed out, surplus countries increase global instability by exerting "negative externality". That hasn't stopped German media from finger-wagging at their "spendthrift" neighbors to the south.

Now markets are in a frenzy; volatility has skyrocketed and gauges of market stress (Libor) are steadily rising. Interbank lending has begun to slow. Greek deficits have uncovered the systemic-rot in the EU banking system which is overloaded with garbage assets and non performing loans, only the EU does not have the fiscal/political infrastructure in place to guarantee the dodgy paper. So the pressure on the banks continues to grow and the prospect of another Lehman crash looms larger by the day.

Meanwhile, in Berlin, embattled politicians--who are 100% certain that the "everyone else is to blame"--are sticking to their Hooverian economics plan; balanced budgets, austerity programs, fiscal straight-jackets all around. This is the deficit hawks remedy, too, the Hoover Solution. Take a good look; this is what the U.S. will look like if the Keynes-bashers, the belt-tighteners, and the deficit gloomsters get their way. Great Depression 2.0. Bet on it.

http://www.informationclearinghouse.info/article25456.htm

Never before has so much debt been imposed on so many people by so few financial operatives—operatives who work from Wall Street, the largest casino in history, and a handful of its junior counterparts around the world, especially Europe.

External sovereign debt, as well as occasional default on such debt, is not unprecedented <1>. What is rather unique in the case of the current global sovereign debt is that it is largely private debt billed as public debt; that is, debt that was accumulated by financial speculators and, then, offloaded onto governments to be paid by taxpayers as national debt. Having thus bailed out the insolvent banksters, many governments have now become insolvent or nearly insolvent themselves, and are asking the public to skimp on their bread and butter in order to service the debt that is not their responsibility.

After transferring trillions of dollars of bad debt or toxic assets from the books of financial speculators to those of governments, global financial moguls, their representatives in the State apparatus and corporate media are now blaming social spending (in effect, the people) as responsible for debt and deficit!

President Obama’s recent motto of “fiscal responsibility” and his frequent grumbles about “out of control government spending” are reflections of this insidious strategy of blaming victims for the crimes of perpetrators. They also reflect the fact that the powerful financial interests that received trillions of taxpayers’ dollars, which saved them from bankruptcy, are now dictating debt-collecting strategies through which governments can recoup those dollars from taxpayers. In effect, governments and multilateral institutions such as the IMF are acting as bailiffs or tax collectors on behalf of banksters and other financial wizards.

Not only is this unfair (it is, indeed, tantamount to robbery, and therefore criminal), it is also recessionary as it can increase unemployment and undermine economic growth. It is reminiscent of President Herbert Hoover’s notorious economic policy of cutting spending during a recession, a contractionary fiscal policy that is bound to worsen the recession. It is, indeed, a recipe for a vicious circle of debt and depression: as spending is cut to pay debt, the economy and (therefore) tax revenues will shrink, which would then increase debt and deficit, and call for more spending cuts!

Spending on national infrastructure, both physical (such as roads and schools) and social infrastructure (such as health and education) is key to the long-term socioeconomic developments. Cutting public spending to pay for the sins of Wall Street gamblers is bound to undermine the long-term health of a society in terms of productivity enhancement and sustained growth.

But the powerful financial interests and their debt collectors seem to be more interested in collecting debt claims than investing in economic recovery, job creation or long-term socioeconomic development. Like most debt-collecting agencies, the IMF and the states serving as banksters’ bailiffs through their austerity programs may shed a few crocodile tears in sympathy with the victims’ of their belt-tightening policies; but, again like any other debt-collecting agents, they seem to be saying: “sorry for the loss of your job or your house, but debt must be collected—regardless”!

A most outrageous aspect of the debt burden that is placed on the taxpayers’ shoulders since 2008 is that most of the underlying debt claims are fictitious and illegitimate: they are largely due to manipulated asset price bubbles, dubious or illegal financial speculations, and scandalous conversion of financial gamblers’ losses into public liability.

As noted earlier, onerous austerity measures to force the public to pay the largely fraudulent external debt is not new. Benignly calling such oppressive measures “Structural Adjustment Programs,” the International Monetary Fund and the World Bank have for decades imposed them on many less developed countries to collect debt on behalf of international financial titans.

To “help” the indebted nations craft debt-servicing arrangements with external creditors, the IMF imposed severe conditions on the way they managed their economies—just as it is now imposing (in collaboration with the European and American bankers) those austerity policies on the debtor nations in Europe. The primary purpose of such restrictive conditions is to divert or transfer national resources from domestic use to external creditors. These include not only belt-tightening measures to cut social spending and/or raise taxes, but also selling-off public enterprises, national industries, and future tax revenues.

Calling such fire-sale privatization deals “briberization,” the ex-World Bank chief economist Joseph Stiglitz revealed (in an interview with the renowned investigative reporter Greg Palast) how finance ministers and other bureaucratic authorities in the debtor countries often carried out the Bank’s demand to sell off their electricity, water, transportation and communication companies in return for some apparently irresistible sweetener. "You could see their eyes widen" at the prospect of 10% commissions paid to Swiss bank accounts for simply shaving a few billions off the sale price of national assets <2>.

The IMF/World Bank/WTO “structural adjustment programs” also include neoliberal policies of “capital-market liberalization.” In theory, capital market deregulation is supposed to lead to the inflow and investment of foreign capital, thereby bringing about industrialization, job creation and economic expansion. In practice, however, financial liberalization often leads to more capital outflow (or capital flight) than inflow. To the extent that there is an inflow of capital it is not so much productive or industrial capital as it is unproductive or speculative capital (also known as “hot money”): massive amounts of capital that is constantly in transit across international borders in pursuit of real estate, currency, or interest rate speculation.

To attract foreign capital to the relatively vulnerable markets of debtor nations, the IMF frequently recommends drastic increases in interest rate. Higher interest rates are, however, both anti-developmental and detrimental to the goal of debt servicing. Higher interest rates tend to destroy property values, divert financial resources away from productive investment, and increase the burden of debt servicing.

For example, in the Philippines, which in 1980 adopted the IMF’s Structural Adjustment Program, “Interest payments as a percentage of total government expenditures went from 7 percent in 1980 to 28 percent in 1994. Capital expenditures, on the other hand, plunged from 26 percent to 16 percent.” By contrast, “the Philippines' Southeast Asian neighbors ignored the IMF's prescriptions. They limited debt servicing while ramping up government capital expenditures in support of growth. Not surprisingly, they grew by 6 to 10 percent from 1985 to 1995. . .while the Philippines barely grew and gained the reputation of a depressed market that repelled investors” <3>.

A major condition of the IMF/World Bank/WTO’s “restructuring program” is trade liberalization. Free trade has always been the bible of the economically strong, self-righteously preached to the weak. It enables the strong to use their market power for economic gains, thereby perpetuating an international division of labor in which the technologically advanced countries would specialize in the production and export of high-tech, high-value added products while less developed countries would be condemned to the supply of less- or un-processed products. It is not surprising, then, that such a lop-sided policy of trade liberalization is sometimes called “free trade imperialism.”

Taking advantage of the so-called Third World debt crisis, the IMF, World Bank and WTO imposed free trade and other “adjustment programs” on 70 developing countries in the course of the 1980s and 1990s. “Because of this trade liberalization,” points out Walden Bello, member of the Philippines House of Representatives and president of the Freedom from Debt Coalition, “gains in economic growth and poverty reduction posted by developing countries in the 1960s and 1970s had disappeared by the 1980s and 1990s. In practically all structurally adjusted countries, trade liberalization wiped out huge swathes of industry, and countries enjoying a surplus in agricultural trade became deficit countries.” Bello further points out, “The number of poor increased in Latin America and the Caribbean, Central and Eastern Europe, the Arab states, and sub-Saharan Africa.” By contrast, in China and East Asia, where the neoliberal free trade and other Structural Adjustment Programs were rejected, significant economic development and considerable poverty reduction took place <3>.

The attitude of the international financial parasites and their collection agencies such as the IMF regarding the disastrous consequences of their “restructuring” conditions is instructive.

An IMF official was quoted as acknowledging that the Fund's austerity packages have often led to debt-collection without economic growth. But he added: "the Fund is a firefighter not a carpenter, and you cannot expect the firefighter to rebuild the house as well as put out the fire." Obviously, what the “firefighter” tries to save from burning are external debt claims, not the economies or livelihoods of the indebted.

Another component of the IMF/World Bank’s “adjustment program” to service external debt is called elimination of “price distortions,” or establishment of “market-based pricing.” These are fancy, obfuscationist terms for raising prices on essential needs such as food, water and utilities. They also include elimination of subsidies on healthcare, education, transportation, housing, and the like; as well as curtailment of wages and benefits for the working class. In essence, these are roundabout ways of taxing the poor to pay the rich, the creditors.

Where such belt-tightening measures have made living conditions for the people intolerable, they have triggered what has come to be known as “the IMF riots.” The IMF riots are “painfully predictable. When a nation is, ‘down and out, the IMF takes advantage and squeezes the last pound of blood out of them. They turn up the heat until, finally, the whole cauldron blows up,’ as when the IMF eliminated food and fuel subsidies for the poor in Indonesia in 1998. Indonesia exploded into riots. . . ” <2>. Other examples of the IMF riots include the Bolivian riots over the rise in water prices and the riots in Ecuador over the rise in cooking gas prices. As the IMF/World Bank riots create an insecure or uncertain economic environment, they often lead to a vicious circle of capital flight, deindustrialization, unemployment, and socio-economic disintegration.

Only when the riots have tended to lead to revolutions, the parasitic mega banks and their debt-collecting bailiffs, the IMF and/or the World Bank, have been forced to accept less onerous debt-servicing conditions, or even debt repudiation. The Argentine people deserve credit for having set a good example of this kind of debt restructuring.

In late 2001 and early 2002, they took to the streets to protest the escalated austerity measures imposed on them at the behest of the IMF and the World Bank. “Political demonstrations and the looting of grocery stores quickly spread across the country. . . . The government declared a state of siege, but police often stood by and watched the looting ‘with their hands behind their backs.’ There was little the government could do. Within a day after the demonstrations began, principal economic minister Domingo Cavallo had resigned; a few days later, President Fernando de la Rua stepped down. . . . In the wake of the resignations, a hastily assembled interim government immediately defaulted on $155 billion of Argentina's foreign debt, the largest debt default in history” <4>.

Argentina also freed its currency (peso) from the US dollar (it had been pegged to dollar in 1991). After defaulting on its external debt and dropping its currency peg to the dollar, Argentina has enjoyed a most robust economic growth in the world. Debt re-structuring a la Argentina, that is, debt repudiation, is what today’s debt-strapped nations in Europe and elsewhere need to do to free themselves from the shackles of debt peonage.

Having subjected many nations in the less-developed countries of the South to their notorious austerity measures, international knights of finance are now busy applying those impoverishing measures to the more developed countries of the North, especially those of Europe. For example, the Greek government has in recent months announced a series of wage and benefit cuts for public workers, a three-year freeze on pensions and a second increase this year in sales taxes, as well as in the price of fuel, alcohol and tobacco in return for a bailout plan promised by the IMF and the European Central Bank.

Debt collectors’ austerity requirements in a number of East European countries (such as Latvia and Lithuania) have been even more draconian. Thomas Landon Jr. of The New York Times recently reported that, threatened with bankruptcy, “Lithuania cut public spending by 30 percent — including slashing public sector wages 20 to 30 percent and reducing pensions by as much as 11 percent. . . . And the government didn’t stop there. It raised taxes on a wide variety of goods, like pharmaceutical products and alcohol. Corporate taxes rose to 20 percent, from 15 percent. The value-added tax rose to 21 percent, from 18 percent” (April 1, 2010).

As these oppressive measures led to the transfer of nine percent of gross domestic product (euphemistically called “national savings”) from domestic needs to debt collectors, they also further aggravated the economic crisis: “Unemployment jumped to a high of 14 percent, from single digits — and an already wobbly economy shrank 15 percent last year” .

In Latvia, another victim of the predatory global finance, the recessionary consequences of creditor-imposed austerity measures have been even more devastating: “Latvia has experienced the worst two-year economic downturn on record, losing more than 25% of GDP. It is projected to shrink further during the first half of this year. . . . With 22% unemployment . . . and cuts to education funding that will cause long-term damage, the social costs of this trajectory are also high” <5>.

While the debt crises of the weaker European economies such as Greece, Latvia, Lithuania, Spain, Portugal and Ireland have reached critical stages of sustainability, the relatively stronger economies of Germany, France, and UK are also in danger of debt and deficit crises. Indeed, according to a recent IMF estimate, even in the more advanced economies of Europe the debt-to-GDP ratio will soon rise to an average of 100% <6>.

Of course, the United States is also burdened by a mountain of debt that is fast approaching the size of its gross domestic product (of nearly $13.5 trillion). A major difference between the United States and other indebted nations is that the US is not as much at the mercy of its creditors or the IMF as are other debtor nations. Therefore, it can reasonably be argued that, on the basis of national or public interests, it could embark on an expansive fiscal policy, that is, a more aggressive stimulus package, that would take advantage of the power of “government as the employer of last resort,” more or less as FDR did, thereby creating jobs, incomes and economic growth. This would also add to government’s tax collection and reduce its debt and deficit.

Judging by the record, as well the budgetary projections, of the Obama administration and the lobby-infested Congress, however, such an expansionary fiscal policy seems very unlikely. Not only has the bulk of the government’s anti-recession assistance been devoted to the rescue of the Wall Street gamblers, but also the relatively small stimulus spending has largely been funneled into the pockets of the private/financial sector—through wasteful and ineffectual programs such as “cash for clunkers,” tax credit for new homebuyers, tax incentives for employers to hire, and the like. This stands in sharp contrast to what FDR did in the earlier years of the Great Depression: creating jobs and incomes directly and immediately by the government itself.

Not only is the administration’s feeble stimulus package soon coming to an end, but the government also recently imposed a three-year spending freeze on all public outlays except for military spending and the so-called entitlements. As their tax revenues, along with their traditional shares of federal assistance, are dwindling many states (especially California, Florida, New York, Arizona, Nevada and New Jersey) are facing serious financial difficulties. And as they curtail or shut down essential services at the libraries, museums, parks, schools, art centers, and hospitals, and give pink slips to their employees, the recessionary conditions are bound to exacerbate.

The wrenching economic hardship in the debt-ridden countries is not so much due to insufficient or lack of resources as it is the result of the lopsided and cruel distribution of those resources. It is increasingly becoming clear that the working majority around the world face a common enemy: an unproductive financial oligarchy that, like parasites, sucks the economic blood out of the working people, simply by trading and/or betting on claims of ownership.

Rectification of this unsavory situation poses stark alternatives: either the powerful financial interests, using the state power, succeed in collecting their debt claims by impoverishing the public; or the public will get tired of the vicious cycle of debt and depression, and will rise in protest—akin to the “IMF riots” in Argentina—to repudiate the largely fictitious and illegitimate debt. This is of course a class war. The real question is when the working people and other victims of the unjust debt burden will grasp the gravity of this challenge, and rise to the critical task of breaking free from the shackles of debt and depression.

While repudiation may cleanse the current toxic debt off the economies of the indebted societies, it would not prevent its recurrence in the future. To fend off such recurrences, it is also necessary to nationalize the banks and other financial intermediaries. It only stands to reason that national savings be placed under democratically controlled public management – not unelected, profit-driven private banks.

Ismael Hossein-zadeh, author of the recently published The Political Economy of U.S. Militarism (Palgrave-Macmillan 2007), teaches economics at Drake University, Des Moines, Iowa.

<1> For a comprehensive account of the history of sovereign debt crises and/or defaults see, for example, Carmen M. Reinhart and Kenneth S. Rogoff, This Time is Different: Eight Centuries of Financial Folly. Princeton, NJ: Princeton University Press, 2009.

<2> Greg Palast, “The Globalizer Who Came In From the Cold,” gregpalast.com, October 10, 2001.

<3> Walden Bello, “The Poverty Trip – Is Corruption the Cause,” Counter Punch, April 30 – May 2, 2010.

<4> Arthur McEwan, “Economic Debacle in Argentina—The IMF Strikes Again,” Dollars & Sense, March-April 2002.

<5> Mark Weisbrot, “Baltic Countries Show What Greece May Look Forward to If It Follows EC/IMF Advice,” The Guardian Unlimited, April 28, 2010.

<6> Nouriel Roubini, “The Debt Death Trap,” Project Syndicate, April 16, 2010.


FROM THE COMMENT SECTION:

On the author's citation that "according to a recent IMF estimate, even in the more advanced economies of Europe the debt-to-GDP ratio will soon rise to an average of 100%", sorry, that is out of date. Here are the real figures for 19 countries plus the USA, the latter being the only one to currently be (barely) under 100%:

Country Name, Gross External Debt, GDP, percentage of external debt vs GDP

1.Ireland – 2.386tr, 188.4b, 1267%
2.Switzerland – 1.338tr, 316.7b, 422.7%
3.UK – 9.087tr, 2.226tr, 408.3%
4.Netherlands – 2.452tr, 672b, 365%
5.Belgium – 1.246tr, 389b, 320.2%
6.Denmark – 607.38b, 203.6b, 298.3%
7.Austria – 832.4b, 329.5b, 252.6%
8.France – 5.021tr, 2.128tr, 236%
9.Portugal - 507b, 236.5b, 214.4%
10.Hong Kong – 631.13b, 306.6b, 205.8%
11.Norway – 548.1b, 275.4b, 199%
12.Sweden – 669.1b, 344.3b, 194.3%
13.Finland – 364.85b, 193.5b, 188.5%
14.Germany – 5.208tr, 2.918tr, 178.5%
15.Spain – 2.409tr, 1.403tr, 171.7%
16.Greece – 552.8b, 343b, 161.1%
17.Italy – 2.31tr, 1.823tr, 126.7%
18.Australia – 891.26b, 800.2b, 111.3%
19.Hungary – 207.92b, 196.6b, 105.7%
20.US – 13.454tr, 14.26tr, 94.3%

AND LET US NOT FORGET CHAVEZ AND THE VALIANT VENEZUELANS!

THIS IS ANOTHER EXCERPT FROM THE POST:

Unhinged: When Concrete Reality No Longer Matters to the Market (and What to Do About It)by Zeus Yiamouyiannis, Ph.D. IT IS FOUND AT:

http://www.oftwominds.com/blogmay10/market-unhinged-from-reality05-10.html

As with any successful “mark” in a con, the initial reaction by the abused is shame and efforts to pretend a scam did not happen. With the American people there is also more than a trace of complicity. People got high on visions of unlimited wealth and got a taste of their skyrocketing wealth, fictional and bubble-driven as it might have been. Some even used their houses as ATM’s.

This stems from a creeping and cleverly warped version of the American Dream, that we all could get wealthy without working if we were lucky or clever enough. In the orgy to get in on a “good thing,” people didn’t ask the serious question about whether this collusion was a morally, socially, and spiritually bad way to live your life, not to mention an abominable way to treat others and future generations.

Turns out the “good thing” is bad for everyone involved, even the crooks. People will begin to wake up to this as more jobs get lost and the fig leaves of fanfare-driven recovery fade into an uncomfortable reality—the United States and the world has been ripped off trillions of dollars, more than can be paid back even on the backs of overworking two-income families.

Rage is beginning to replace shame as the promises of recovery keeping meeting the stubborn reality of high unemployment, frozen lending, plunging commercial and residential real estate, skyrocketing college tuition, and expensive oil. People are beginning to wonder, “Where are the prosecutions; where is the accountability?” Why are citizens being counseled to liquidate their retirements to pay for their upside-down mortgages while corporations walk away from billion dollar real estate busts? Why is public money being used to bail out banks that engaged in purely private, unregulated betting?

Part of the answer is revealed in the case of Bradley Birkenfeld. Birkenfeld was an inside-the-inner-circle employee of the UBS, a Swiss Bank and one of the largest banks in the world. Swiss banks pride themselves on their “discretion” and privacy, a policy that allowed them to hide stolen Nazi wealth for decades.

So it’s clear that we are only talking financial and not moral “discretion.” In fact, Swiss banks continue to be a haven for tax cheats, international arms dealers, and anyone looking to park their ill-gotten gains outside the prying eyes of international law. After counseling clients including American politicians how to divert their money into UBS to avoid taxes, and even acting as a “concierge” to buy expensive objects for clients, Birkenfeld finally blew the whistle on the operation.

In interviews on CBS’s 60 minutes and Amy Goodman’s Democracy Now, Birkenfeld and his lawyer outlined the depth the corruption. From the April 15th, 2010 Democracy Now interview with Stephen Kohn, Birkenfeld’s lawyer:

Nineteen thousand American millionaires and billionaires had these offshore accounts. You had to be very wealthy to set one of these up. The government created an amnesty program, so if you voluntarily turned yourself in, you escaped any prosecution and even public exposure. No one would even know who you were. On the other hand, to Mr. Birkenfeld, who didn’t even have an account, Mr. Birkenfeld, who turned it in, he was sentenced to prison and was not offered immunity. So that’s the dichotomy.

Dichotomy indeed. There existed in UBS tens of billions of dollars of hidden, tax-dodges for the American clients alone, and all those clients got was a slap on the wrist and more “discretion” around their identities from U.S. law enforcement? UBS itself was merely fined 780 million dollars and forced to give over its names, a drop in the bucket for their almost 2 trillion dollar holdings. For all those wanting a progressive resurgence of the level playing field and the rule of law, there is little evidence of accountability to nourish one’s desire for justice. Hopes for real top-down prosecution are fading, but is there another tack the public can take?

TOMORROW (IF I DON'T FORGET OR GET BLOWN UP)...THE CONCLUSION!

I just don't have the stamina for much doom and gloom these days.

Perhaps it's seeing the dire predictions of the past 10 years or so when I started trying to figure out what was going on all coming true, and nobody acting to stop them, even now, and the predictions are getting worse, and I can't fault them, ignore them, or make them go away...

At this rate, the inbox will never be empty. I've come to accept that.

But I can't stand to post anything further today. the pain threshold has been exceeded.

It has far exceeded mine - I go around with Arnold's "Dover Beach" and the awful "Eve of Destruction" playing in my head.

Rest and regroup - you've earned it.

who are extremely worried. It's gotten so stressful for me, I stopped cleaning the house. We cyber buddies gotta stick together, we're the only ones who see what's happening, and support each other. So take a break, get out and enjoy the warm weather.
:hug:

So I missed most of the excitement and insanity Friday and Sat. I spent yesterday being tortured in a yoga class. I thought that stuff was supposed to be relaxing. I did learn that there are at least 10 ways your belly can get in your way.

Today looks like a repeat of Fridays tribulations. Futures are way down again. But, I'm going to miss that today also. I'm going kayaking. I wonder if I'd prefer being eaten alive by an alligator or a bankster. I'll ponder that today.

Stick with it. You'll be glad you did. It will be relaxing when your body realizes you aren't trying to kill it. Which can take a while depending on how long you've been trying to kill it by not doing anything.


I started yoga because I began having RA symptoms about 7 or 8 years ago and knew that the sooner I started working on joint flexibility the better off I'd be in the long run. I've been doing yoga for 6 years and there are poses I still have trouble with. But others I glommed onto right away.

The Spousal Unit recently began complaining of lower back pain, so I convinced him to give it a go. He's the one who started calling it "wrasslin'" all those years ago. Except in Greo-Roman wrestling you at least have the fun of another person.....

He's very tight where most men are tight...through the hips and hamstrings. But he started out being able to do some of the binding poses that I still can't quite get.

If I can offer some pointers....

BREATHE being the most important. Oxygen keeps all that lactic acid from building up and making you sore later. (to that end, try some hydrogen peroxide on the most tired muscles. it does absorb through the skin)

Structure is second most important. Think 8th grade geometry. When you use your bones and tendons as levers and pulleys, they need to be aligned/structured correctly for maximum effect. So consciously consider your body in those terms. "Play" with the pose while you are in it. Do some micro movements and shift a part slightly to see if you get more stretch here or in another part of the limb or torso.

Self-talk is not something I've ever heard an instructor mention, but I know that if I carry on an internal dialog with myself about what I'm experiencing and what I want to experience, it can make things much easier. For instance: pain. Once you've decided that it's not a critical pain, you can decrease it by telling it two things: I know I'm in pain, thanks for making me aware that I might be harming myself, but I've got this one. And describing ways in which you want that particular muscle group to relax. I talk about melting, or being soft like clay or any other analogy that occurs to you. I literally say: It's okay to relax.

Or for balancing poses: Balance. Find your center. I am a pillar.

Yes, it's goofy, but since nobody can hear me, I'd rather find myself goofy than in pain or falling all over the floor.

And to answer the seemingly persistent question: Yes, a lot of farting goes on in Yoga. Try not to ingest anything thats going to "excite" your digestive system before you go to practice.

Have fun.... I do (now)

Capitalism produces Depressions
we need a new system

the only way an economy flourishes is when its people WORK
unemployment doesn't do anything
except cause more crime deficits and misery

its the battle between the haves and have nots

There is no way to handicap for good business sense. Or for guile and cunning. Or for might.

So somebody is going to end up with more "stuff".

The best system I've come across is in the Tribes of the NW American Indians. They have Potlatch.

Periodically (1 year/ 5 years/ 10 years depending on the tribe's system) the richest in the tribe will give away all their stuff. Coup is counted by how generous you are. You gain political power and influence by generosity.

There are also Potlatches with neighboring tribes. Again, he who gives away most, wins.

Our household's version of potlatch usually comes before a move. We take all the stuff we don't want to move and set it aside. We then have a moving party. A farewell party if you will. People take a number as they come in the door. At some point in the proceedings we take our bowl with a corresponding set of numbers and go through the stuff. We set it up, do a little auctioneers talk to get interest up, then draw a number from the bowl.

The rules are:
1. You don't have to keep it, but you can't throw it away or leave it here. Donate it to Goodwill, give it to somebody at the party or to a guy on the street.
2. You can trade with any other person or people for any other item
3. If you leave it here, we will pack it up and send it to you, along with any other things we weren't able to get rid of.


Since we haven't moved in 11 years, we now just send out random boxes of stuff several times a year. And on occasion we'll get interesting boxes filled with completely different stuff back.

But I made the mistake of reading enough postings by people who "JUST DON'T GET IT!"that now, I'm all like:

I just read a great wiki on Cognitive Biases last night.
http://www.scribd.com/doc/30548590/Cognitive-Biases-A-Visual-Study-Guide

Sadly, I recognized many people in quite a number of their examples.

I too see many people in these examples.

This activity can be soul destroying. Occasionally, I welcome the slow news days. Everyone should take a rest from this shit from time to time. :hug:

Based on the latest available data, the Dow Jones industrial average .DJI fell 126.82 points, or 1.24 percent, to end unofficially at 10,066.57. The Standard & Poor's 500 Index .SPX was down 14.04 points, or 1.29 percent, to finish unofficially at 1,073.65. The Nasdaq Composite Index .IXIC was down 15.49 points, or 0.69 percent, to close unofficially at 2,213.55.

/. http://www.reuters.com/article/idUSTRE6341EA20100524

You could have kept in place your original image, RisF.

Imho, a lot of international media reaction to European events is down to ignorance and kneejerks. That many smaller Spanish savings banks are merging is good news (assuming better oversight and sensible economies of scale can be achieved). The bad news is that it took so long (2+ years now).

The Dow lost like 100 points in the 15 minutes right before the market closed.

Anything can happen. I'm sorry for the non-answer answer. But I am just as puzzled as you are. Irrationality has its own reasons.

That's quite a compliment.