The Weekend Economists' Fandango Edition May 1 - 3, 2009

It's SPRING!

What with President Obama's first hundred days under his belt. Not to mention that during the next couple of weeks thousands of Americans will likewise be graduating from one stage of their lives to another.

Here we are... In a week where Chrysler goes Chapter 11, The Senate lets us know who they work for...

I think it's high time to go dig up Dom!

What does Fandango, Dom, and Graduation have to do with Economics?

Well, much, as it turns out...

The Fandango I'm talking about is the movie. Fandango(1985)

http://www.ultimatefandango.com/

Summary: College buddies, facing graduation, marriage, and the draft, skip out of their own graduation party and head to the border for some adventure, a buried secret, and one last go-around at "the privileges of youth".

Near the end of the movie they decide to throw a wedding for one of the 'Groovers' (as they call themselves)... Trouble is, they only have a card table. In how they enlist the help of a village to throw what is probably the most memorable wedding the sleepy little area has ever seen... That is where the intersection with the present day Economy and the story of Stone Soup come together.

"Gardner: We're innocent critters squashed on the highway of life!"

There are also some of the fanciest flying and sky-diving scenes in a movie... Ever!

"Oh, my poor laundry!"



So, please... "GO ON"! Exercise the privilege of youth and join in ranting, raving or constructively criticizing the current state of the Economy and/or the players involved. Point out every flower and spine on the cactus! It's your world, you build it. :)

"Silverton Bank closes, costing the Deposit Insurance Fund an estimated $1.4 billion. Smaller New Jersey and Utah banks also shutter."

"By Catherine Clifford, CNNMoney.com staff writer
Last Updated: May 1, 2009: 8:37 PM ET"

"NEW YORK (CNNMoney.com) -- Three more banks shut their doors Friday, according to the federal government, bringing the total number of failures up to 32 in 2009."

(snip)

Georgia "bankers' bank": The Federal Deposit Insurance Corp. said in a statement that it created a bridge bank to take over the operations of Silverton Bank, National Bank, headquartered in Atlanta.

(snip)

New Jersey: State regulators shut down Citizens Community Bank Friday night, and named the FDIC as the receiver. The Ridgewood, N.J.- based bank had total assets of approximately $45.1 million and total deposits of $43.7 million as of Dec. 31.

(snip)

Utah: On Friday evening the FDIC also became the receiver of America West Bank, after the Utah regulators closed the institution. The Layton, Utah-based bank had total assets of approximately $299.4 million and total deposits of $284.1 million as of Dec. 31.

http://money.cnn.com/2009/05/01/news/companies/bank_failure/?postversion=2009050118

Obligatory movie quote.

They must have had a super-duper housing bubble. They are having fresh water woes, too, now. Sucks to be greedy....

By Linda Sandler and Christopher Scinta

May 2 (Bloomberg) -- Chrysler LLC, the bankrupt automaker, may pay an estimated $200 million to lawyers and other professionals helping it try to create a more viable carmaker in partnership with Italy’s Fiat SpA.

The third-largest U.S. automaker already has paid Jones Day lawyers $18.9 million in retainers since November to avoid, and then prepare for, the company’s Chapter 11 proceeding, according to court documents. Lawyers, bankers and accountants may reap more than 10 times that amount in court-approved fees by the time the case ends, said Stephen Lubben, who teaches bankruptcy- law at Seton Hall University School of Law in Newark, New Jersey, and keeps a database on fees.

More... http://www.bloomberg.com/apps/news?pid=20601103&sid=a6H2Wa0kmZL8&refer=us

GARDNER: "You're drinkin' it."

This is going to be messy.

By Erik Holm and Andrew Frye

May 2 (Bloomberg) -- Billionaire investor Warren Buffett, the chairman and chief executive officer of Berkshire Hathaway Inc., said he’s seen no indication of recovery from the real estate slump that helped cause the U.S. recession.

“There’s no signs of any real bounce at all in anything to do with housing, retailing, all that sort of thing,” said Buffett, 78, in a Bloomberg Television interview before the Omaha, Nebraska-based company’s annual shareholder meeting today. “You never know for sure, even if there’s a leveling off, which way the next move will be.”

Paul Volcker, one of President Barack Obama’s economic advisers, said this week that the economy was “leveling off at a low level” and doesn’t need a second fiscal stimulus package after the $787 billion plan signed by Obama in February. The U.S. economy contracted at a 6.1 percent annual rate in the first quarter, weaker than forecast, making this recession the worst since 1957-1958.

The annual meeting gives Buffett and Vice Chairman Charles Munger a platform to discuss markets, the economy and Berkshire’s businesses. Shareholders were expected to attend in record numbers this year after Berkshire reported five straight quarters of profit declines, ratings companies took away the firm’s top AAA credit grade, and Buffett confessed to an ill- timed investment in oil producer ConocoPhillips.

More... http://www.bloomberg.com/apps/news?pid=20601103&sid=aGH_rFa9KgqY&refer=news

GARDNER: "Oh, the man absolutely thrives on danger."

http://news.yahoo.com/s/nm/20090502/bs_nm/us_berkshire_4

OMAHA, Nebraska (Reuters) – Warren Buffett told a record crowd at a somber annual meeting of his Berkshire Hathaway Inc that first-quarter operating profit fell and the company's book value declined 6 percent, as the recession hurt many of the company's businesses and investments.

Operating profit fell about 12 percent from a year earlier to $1.7 billion, as most of Berkshire's businesses were "basically down," Buffett told an estimated 35,000 people at the meeting in downtown Omaha.

The decline in book value results in part from falling stock prices and higher losses on derivatives contracts, and comes on top of a 9.6 percent decline last year, the biggest drop since Buffett began running the company in 1965.

Buffett acknowledged that Berkshire will probably lose money on derivatives tied to the credit quality of junk bonds, though he still expects to make money on a much larger and longer-term derivatives bet that stock prices will rise.

Berkshire's cash stake fell to about $22.7 billion on March 31 from $25.5 billion at year end, Buffett said. Berkshire expects to report results on May 8.

The outlook punctuated a meeting that had a decidedly more serious and somber tone from years past as many investors expressed worries about the economy, Berkshire's investments, and how long the 78-year-old Buffett plans to stay on the job....

MUCH MORE

Buffett also said that while Berkshire is less nimble than when it was smaller, "our sustainable competitive advantage is we have a culture and business model that people would find very, very difficult to copy."

Munger added that "the stupidity in the management practices of the rest of the corporate world" will likely benefit Berkshire in the future.

http://www.marketwatch.com/news/story/buffett-limit-ceo-pay-through/story.aspx?guid={AE5E4E72-7716-483D-8860-2DE02A677593}&siteid=yahoomy

OMAHA , Neb. (MarketWatch) -- The way to limit excessive executive pay in the U.S. is to embarrass chief executives and compensation directors, rather than imposing more regulations, Berkshire Hathaway Chairman Warren Buffett said Saturday at the company's annual shareholder meeting....


YEAH, THAT WILL WORK. I CAN SEE THEM QUAKING IN THEIR SHOES...FROM LAUGHTER.

What did we tell you? The New York state pension fund scandal is starting to look pretty national. New York AG Andrew Cuomo just issued 100 subpoenas to investment firms in his expanding investigation of pay-to-play schemes that defraud public employee retirement funds, and announced the participation of 100 officials in 36 states' attorney general offices in the probe.

Who are the 14 holdouts? We suspect they're states that already regulate placement agents or ban them altogether, as New York did last week.

Back in 1999 the SEC proposed comprehensive regulation of pension fund placement agents and other potential conflicts-of-interest, but the stock market was in the headiest stretch of an epic bull market and the proposal died on the vine. Not so much the case these days.

http://tpmmuckraker.talkingpointsmemo.com/2009/05/cuomo_subpoenas_100_hedge_funds_enlists_36_states.php


Talkingpointmemo's Muckrakers have another post up today about this pension probe where New Mexico's pension was arm-twisted by Obama's financial team into investing in toxic waste

http://tpmmuckraker.talkingpointsmemo.com/2009/05/did_marc_correra_make_115_million_in_finders_fees.php

and looking to get much bigger.

Thanks for posting, Robbien.

Scary, all these pension funds, at risk.



:hi:

<snip>
Your opinion of Obama's first 100 days depends, of course, on your own vantage point. But we'd argue that as part of his bending over backwards to support the banks and avoid the losers, he has blundered mightily in his choice of economic advisers.
<end snip>

I'll post the rest of the article later.

This is my "I.T.Y.S." moment, not the first, and probably not the last, but the fact that confirmation is now coming from Bill Moyers gives me a great deal of satisfaction.

And I know I'm preaching to the choir here on WEE -- :hi: Thanks, Hugin, for filling in this week-end! -- but I'm gonna do it anyway in hopes that a lurker or two might read it and take note.

Because I saw this catastrophe from the beginning. I was flamed for it, and I knew I would be, and I didn't back down. And since Obama first announced the names of his economic team, back on November 24th, I've been saying the same thing --

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=132&topic_id=7922946

"His economic team is nothing but recycled Greenspan believers. Greenspan and Rubin and Phil "King of Deregulation" Gramm are the ones who got our economy into its present mess."

"While I don't think a blank check to GM is the answer to the auto industry woes, I think blank checks to the Wall Street firms is about as wrong a response as there can be. Yet I hear not a peep from the Obama economic team. not a peep. Oh, wait, they're all tied to Wall Street. Why would they peep?"

"Oh, I know, there will be plenty on DU who are loyal supporters of the president elect, who will support him through thick and thin. There are those who will caution that we wait until he's actually in office and actually has the power to do things.

"And I know many of them will label me a concern troll, I who have been here since 2002 as Tansy Gold and since before that under another name. I don't care. I'm going to speak out."

"If what he's trying to do is keep the stock market from crashing, he's doing little to help the economy. The market and the economy are two different things, and they've become more and more divorced from each other as a direct result of policies implemented by Greenspan, Gramm, and their subordinates, including Robert Rubin and Larry Summers and Timothy Geithner. They're all great supporters of The Markets, but not so much The Economy."

"Geithner has been working with Bernanke and Paulson on the current spate of bailouts. As head of the NY Fed, he has close ties to Wall Street. As a protege of sorts to Rubin -- and Rubin himself is now an Obama appointee -- there are additional ties to Citi. Geithner also has ties to Summers. And since both were Treas Secy under Clinton, with the ties to Gramm and repeal of Glass Steagall, Geithner is hardly free of taint.

"Insiders, insiders, insiders all."


So now Moyers has come out and said the Obama economic team choices were a blunder.

<snip>
Last week, at a hearing of the Congressional Oversight Panel (COP) monitoring the Troubled Asset Relief Program (TARP), Treasury Secretary Timothy Geithner tried to correct AFL-CIO General Counsel Damon Silvers. "I've practiced law and you've been a banker," Silvers said. Never, Geithner replied, "I've only been in public service."

We beg to differ. Read Jo Becker and Gretchen Morgenson's front-page profile of Secretary Geithner in Monday's New York Times, and you'll see how Robert Rubin protege Geithner, during the five years he was running the New York Federal Reserve, fell under the spell of the big barons of banking to whom he would one day help shovel overly generous sums of money at taxpayer expense.

<end snip>

There's more, much more, and all of it damning. Moyers, of course, is not the first. Back in that same 24 November thread, I quoted Bill Greider of The Nation, who also expressed reservations. And I had my supporters then, as well as the flamers.

Indeed, there were some here on DU who have seen the DJIA as the economic barometer. They've seen the slight rise in April not only as a good thing in and of itself (it probably helped their 401k or personal portfolio balance) but also as an indicator that The Economy is also on a rebound. Yet we have Chrysler in bankruptcy and virtually shut down because the suppliers are refusing to ship parts. We have GM going into a 9-week shut down. We have the green technology jobs, which were supposed to be the cornerstone of Obama's job creation policy, already being outsourced to India. We have the mortgage bailout (big bucks) being rejected while the credit card realignment (little bucks) is passed. The Economy is not being addressed, but the markets are being saved. So the lifeboats on the Titanic are put in tip-top shape while the ship they're still attached to sinks.

There are many things wrong with the American economy. There are many things wrong with the global economy. It's not a matter of whether the appointees to the economic team have the skills to fix the problems. It's a matter of whether they have the perspective to recognize how intimately their political/economic policies are vested in the causes of the problems and whether they have the political fortitude to reverse those policies.

I don't think they have either one.

Whether Obama has the political self-confidence to admit a mistake and take the steps to correct it is, of course, the even bigger question.



MORTGAGING THE WHITE HOUSE
Saturday 02 May 2009

by: Bill Moyers and Michael Winship, t r u t h o u t | Perspective


Finally, here we are at the end of this week of a hundred days. As everyone in the Western world probably knows by now, this benchmark for assessing presidencies goes back to Franklin Delano Roosevelt, who arrived at the White House in the depths of the Great Depression.

In his first hundred days, FDR came out swinging. He shut down the banks, threw the money lenders from the temple, cranked out so much legislation so fast he would shout to his secretary, Grace Tully, "Grace, take a law!" Will Rogers said Congress didn't pass bills anymore; it just waved as they went by.

President Obama's been busy, but contrary to many of the pundits, he's no FDR. Our new president got his political education in the world of Chicago ward politics, and seems to have adopted a strategy from the machine of that city's longtime boss, the late Richard J. Daley, father of the current mayor there. "Don't make no waves," one of Daley's henchmen advised, "don't back no losers."

Your opinion of Obama's first 100 days depends, of course, on your own vantage point. But we'd argue that as part of his bending over backwards to support the banks and avoid the losers, he has blundered mightily in his choice of economic advisers.

Last week, at a hearing of the Congressional Oversight Panel (COP) monitoring the Troubled Asset Relief Program (TARP), Treasury Secretary Timothy Geithner tried to correct AFL-CIO General Counsel Damon Silvers. "I've practiced law and you've been a banker," Silvers said. Never, Geithner replied, "I've only been in public service."

We beg to differ. Read Jo Becker and Gretchen Morgenson's front-page profile of Secretary Geithner in Monday's New York Times, and you'll see how Robert Rubin protege Geithner, during the five years he was running the New York Federal Reserve, fell under the spell of the big barons of banking to whom he would one day help shovel overly generous sums of money at taxpayer expense.

During "an era of unbridled and ultimately disastrous risk-taking by the financial industry," the Times reported, "... He forged unusually close relationships with executives of Wall Street's giant financial institutions.

"His actions, as a regulator and later a bailout king, often aligned with the industry's interests and desires, according to interviews with financiers, regulators and analysts and a review of Federal Reserve records."

Wined and dined at the Four Seasons, and in corporate dining rooms and fine homes by the very men whose greed and judgment helped bring on the Great Collapse, Geithner became so much a favorite of the Club that former Citigroup chairman Sandy Weill talked with him about becoming the bank's CEO.

According to Becker and Morgenson, "Even as banks complain that the government has attached too many intrusive strings to its financial assistance, a range of critics - lawmakers, economists and even former Federal Reserve colleagues - say that the bailout Mr. Geithner has played such a central role in fashioning is overly generous to the financial industry at taxpayer expense."

The two reporters write that Geithner "repeatedly missed or overlooked signs" that the financial system was self-destructing. "When he did spot trouble, analysts say, his responses were too measured, or too late."

In choosing a man to manage the bailout of the banks who's so cozy with its players, and then installing as his White House economic adviser Larry Summers, who in the Clinton administration took a laissez-faire attitude toward the financial industry which would later enrich him, the president bought into the old fantasy that what's best for Wall Street is best for America.

With these two as his financial gatekeepers, President Obama's now in the position of Louis XVI being advised by Marie Antoinette to have another piece of cake until that rumble in the streets has passed on by.

In fact, other Wall Street insiders - many of them big contributors to the Obama presidential campaign, and progressive in their concern for the public interest - privately are expressing serious concerns that Geithner, Summers and their associates are leading the president and America's taxpayers down a path toward further economic disaster.

This week, as Senate Majority Whip Richard Durbin of Illinois unsuccessfully fought for a congressional amendment he said would have helped 1.7 million Americans save their homes from foreclosure, the senator told a radio station back home that, "The banks - hard to believe in a time when we're facing a banking crisis that many of the banks created - are still the most powerful lobby on Capitol Hill. And they frankly own the place."

He could say the same of the White House






And so could



Tansy Gold

WAGGENER: (outside the charred remains of Chata Ortegas) "Remember when you were in high school, looking ahead, and how you just knew everything thing was gonna be great... you just knew it... I don't feel like that anymore."

and so do many of the people who commented on his article
http://www.truthout.org/050209Z


All Obama and his team are doing, is trying to instill confidence, for as long as they can, in the system we have been accustomed to. But as you can see, and I can see, Moyers and others can see, that the economy is not on a rebound, and no matter what this team is doing now or in the future to try to keep the status quo, it is not going to prevail.

Too many people are unemployed and hundreds of thousands (millions) more to be unemployed from the shutdown of the auto sector this summer. And while Obama is creating some jobs, it is not near the number of jobs being lost.

The credit (debt) bubble is monsterly huge and deflating. No matter how many trillions of our taxmoney are used to try to re-inflate the bubble, there will never be enough to overcome this economic crisis.

There will come a time, probably sooner than later, when the number of unemployed people who have lost not only their job but also their home/apartment, are pennyless and hungry, that Obama and his team will not be able to instill any further confidence. Then what are they going to do? Maybe they are working on 'Plan B' for when the crash comes?

Spouse says not to worry. Obama will have warehouses of food to feed the hungry and bring out the National Guard to prevent any riots. That may be okay in a few cities, but this meltdown will affect everyone, in every city, town and state.

Whatever befalls us in this country and the world, I still prefer we have Obama, and not McCain.



spelling, oops

The end of the world as we know it.

By Michael D. Intriligator

Many are predicting that the current recession will end soon, by this summer, later this year, or at most next year. We don’t believe this prediction, which we see as largely politically motivated or self-serving and reflecting wishful thinking. Instead, we believe that it will take years for the recession to end unless major reforms are initiated that go well beyond current policy initiatives. Here are some of our reasons:

• The failed attempt to remedy the situation by TARP and its successor, the US Treasury’s private-public partnership plan, making the mistake of trying to fix the economy from the top down, by putting enormous federal funds into major banks and non-bank financial institutions rather than from the bottom up, through funding homeowners and small businesses

• President Obama’s economic stimulation plan, the American Recovery and Reinvestment Act (ARRA), despite doing many useful things for infrastructure, the environment, housing, health, etc. being insufficient to stop the downward economic spiral

• GM, Chrysler, and other major corporations in or near bankruptcy and substantially downsizing, with repercussions on their employees, suppliers, dealers, and local communities

• States, cities, and counties all facing enormous deficits and downsizing with furloughs, layoffs, and reductions in expenditures

…lots more…

http://www.huffingtonpost.com/michael-d-intriligator/it-will-take-years-before_b_195197.html

Last line Intriligator: We believe that the current recession could take 6 or 7 years to recover from its official start in December 2007, meaning another 4 or 5 years before the recovery.


Is recovery back to normal?

Carolyn Baker asks: What is 'Back to Normal'?

Is "Normal" hordes of Walmart shoppers stuffing cars and SUV's full of plastics from China?

Is "Normal" homeowners wearing several tons of house debt on their backs as they travel by car to jobs to maintain mortgage, taxes, insurance, and upkeep?

Is "Normal" parents working 80 hours a week?

Is "Normal" slamming down more McDonalds Happy Meals chased with Red Bull and Prozac?

If all these are "Normal", is that recovery?

4/18/09 ECONOMIC RECOVERY? NO THANK YOU, By Carolyn Baker
http://carolynbaker.net/site/content/view/1066/1/

will look like.

or so says some experts per
http://mortgage.freedomblogging.com/2009/05/02/can-two-data-giants-get-investors-to-buy-mortgages-again/9883/


Which is probably the thinking of Obama's financial team. It is the only desired result which makes all their banking recovery programs make any sense at all.


CDOs and Swaps for everyone!

I took note that the place was loaded with minorities... :sarcasm:

Oh, and another thing... It's very likely that at least one of those people attended on taxpayer provided bailout funding. Given the state of the Mortgage Industry...

So, where's the investigation?





I'm not going to hold my breath.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=385x305934

The results of the Mortgage Banksters' triumph:

http://therealnews.com/t/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=3576

Most people seem to think we are just in a long recession, and will continue to spend and buy like we always have after the recession. But we are not in a recession, it's the beginning of a depression. Except for the very elderly, none of us know what to expect in a depression, so how would we know how we will 'recover'? Somehow, I don't think the recovery will be the same as the past 20 years.

By Henry Blodget

Now that stocks have rallied nearly 30% off their low, pundits agree: It’s a new bull market. So be very afraid.

Market punditry is a lagging indicator, not a leading one. Pundits are excellent at describing what has happened, not what is going to happen.

But doesn’t the 30% rally off the bottom obviously mean that the bears are fools, that it’s finally safe to get back in the water? No. It doesn’t obviously mean anything.

…more…

http://www.businessinsider.com/henry-blodget-stop-thinking-the-30-stock-rally-means-the-bear-market-is-over-2009-5

Also:

Insiders Selling Like Crazy

We're not convinced that insiders are really the smart money everyone assumes them to be. But either way, they're sending one message: head for the door!

Rather than take advantage of stock prices that are still at historically low valuations, insiders are taking advantage of the aggressive run up in stocks and cashing out.

http://www.businessinsider.com/insiders-selling-like-crazy-2009-4

OMQ.

By Joe Nocera

In the month since I last wrote in this space, there has been a surge of financial optimism. Banks that are supposed to be in deep trouble have reported profits (though there were a few too many accounting gimmicks for my taste). Some of them, like Goldman Sachs and JPMorgan Chase, are talking about wanting to give back their government bailout money. Bank stocks, moribund not so long ago, have been rising a bit. Other economic indicators suggest that, if the economy hasn’t exactly turned around, at least the pace of decline is slowing. There has been talk of “green shoots” from the Federal Reserve chairman, Ben Bernanke, and “glimmers of hope” from President Obama.

So perhaps the better question to ask this week is where are we? Can we come out of our financial fallout shelters yet, or are there more economic bombs still to drop? Will the results of the stress tests, due out next week, make things better or worse? Have the Obama administration and the Federal Reserve managed to stop the bleeding? Can we start breathing a little easier?

…more…

http://www.nytimes.com/2009/05/02/business/02nocera.html?_r=1&ref=business

TRUMAN: "But, we're talkin' major malfunction here!".

One of my favorite quotes from the movie "Fandango"... I'll post it here, because I shudder to contemplate the serious financial post I would be tempted to ricochet it off of...

LORNA: "An' then, after she had the baby, they had to remove her utopian tubes."
GARDNER: "No, no, that's 'Fallopian', darlin'."
LORNA: "Fallopian? Those are books in the Bible, silly! 'First and Second Fallopians'..."

I never saw the movie "Fandango". Actually, never even heard of it. I'm so movie-challenged.

Hey, thanks for starting this thread this weekend. Have a great day!

St. Francis House, a private Sioux Falls shelter for homeless people, will break ground Monday on a $1 million expansion to serve families.

A ceremony will begin at 11:30 a.m. for a new four-unit residence east of the center's main building at 1301 E. Austin St.

The agency began a campaign last year to raise donations for the expansion. A $690,000 gift last week from the estate of the late New York billionaire Leona Helmsley brought the drive near its goal.

http://www.argusleader.com/article/20090502/NEWS/905020334/1001


Ha! Appears as if Leona's pissed off grandchildren are getting even with her for disinheriting them when she bequeathed all her money to her dog. Snooty Leona's money going to the "little people" she so disdained.

Excellent job. You almost inspire me to go find a copy of "Fandango" to watch. Almost. I figure you've cover the story and humor well enough that I don't have to!

It's a lovely day. The lilacs shot into bloom in under a week. The crabapples scent the air, along with a bush that smells of carnations, but isn't, and hyacinths. It's a good year for hyacinths.

Greetings from the SEMMantics RG (SE Michigan Mensa's Regional Gathering pronounced arr--gee, not orgy). This annual event was very low-key and rather low attendance. Given the economy in Michigan, understandable. Next year SEMMantics will not be held, because the national AG (Annual Gathering) will be held in the Motor City ( or Dearborn, close enough). Assuming there still is a country and an organization next year, thousands of Mesanas will gather to socialize, proselytize, analyze, and any other kind of eyes (the ayes have it!). If you are coming, thinking of coming, eligible to come, I can find you cheap housing! It will be a blast.

No, seriously, I should run away from home on a regular basis. Actually, I sent the Kid away for the weekend, which permitted some midnight cleaning out of the place. It is impossible to clean when the Kid is home. Turn your back, and it's worse than it was before you started. The Kid tests to destruction. Good thing she has a sweet personality.

You mention changing lives, Hugin. That's what's happening to me, what with becoming Treasurer and losing one of my employers...so I'm going to rearrange it so there's more time and more money, and be grateful if either goal is reached.

hold a Buttercup to Inigo.

Struggling to keep everyone interested enough to post... Yet, at the same time making it miserable enough that everyone will be overjoyed upon your return to the stewardship of the WEE...

And these instructions you left... Whooboy! :freak:

TRUMAN: "...O.K. now you'll be coming out here and you'll be doing a stable fall face down frog modified. Now out here comes the static line 'cause it goes like from this to here see, and then the pilot chute will open and it'll pull the bridle out and then the main canopy will be open see, 'cause they're all connected, and then you'll be down here and you'll be looking up here at the WDI indicator and you'll also going to check for Mae West and if that's not there then you need to check here for 4 panels and a hole. Then when you come down you're gonna find the piece and you're gonna land over here and you're going to get in this position - except you don't wanna do that - because that means you in trouble, so what you want to do is you wanna get right here and then you're gonna come round here and you're gonna fold up and you're gonna do a toggle and jettison and always watch the horizon O.K?.."

http://www.agorafinancial.com/5min/

"We don't take note of the Dow-Gold ratio on a daily basis, but for the record, it stands today at roughly 9:1," writes Addison in today's issue of The 5 Min. Forecast.

"We mention this because Byron King sent along this chart going all the way back to the year Charles Dow created his famous index of blue chips.



"For the uninitiated, let's back up. The chart measures the number of ounces of gold it would take to buy all 30 Dow stocks. So in 1980 for example, when the Dow sat around 800 and gold was $800 an ounce, the ratio was 1:1. At the height of the tech bubble in 1999, it was 44:1.

"Notice where we are now... and where in all likelihood we're going based on what's happened before. 'That last drop of gold, from 9 ounces to the 1-2 ounce range,' says Byron, 'can bring a lot of hurt to the stock market along the way.'

"'One way or another, we'll see, say, $5,000... either $5,000 gold or $5,000 DOW. Even if the DOW stays at the current 8,000, that implies, say, $4,000 gold at a 2-to-1 ratio.'"

Byron believes gold still has a ways to go in its epic run...

http://www.ft.com/cms/s/0/eedb5a5c-35cd-11de-a997-00144feabdc0.html

By Aline van Duyn in New York

Published: April 30 2009 22:53 | Last updated: April 30 2009 22:53

Banks and other investors face a bill of more than $1bn after a large US bond insurer became the first since the credit crisis struck to cease paying out claims, an event expected to trigger payouts on billions of dollars of credit derivatives.

Insurance regulators forced Syncora, the insurer that is better known under its former name SCA, to stop paying claims this week so it could try to negotiate an agreement with banks to reduce its liabilities sufficiently to manage future claims.

Syncora has guaranteed more than $140bn of bonds, mainly municipal debt and structured finance. In spite of the pressures wrought by the credit crisis on the bond insurers, or monolines, such as Ambac and MBIA, no others have so far been forced to cease paying claims.

About $18bn worth of credit default swaps, which provide protection against a company defaulting on its debt, have been written on the debt of Syncora.

Under the rules of these derivatives, the stop on claims payouts by Syncora is considered a default by the company, which could trigger payouts as soon as Friday after a three-day grace period expired on Thursday.

While the total volume of the derivatives is about $18bn, the net exposure, which represents the likely amount of payouts that would be made on the derivatives, is just over $1bn, according to industry data.

Details of buyers or sellers are not known.

Banks, insurance companies and other investors involved in the market put up collateral against their credit derivatives exposures, which means some of the $1bn in payouts will already be in the hands of those due to receive them.

Syncora’s finances turned sour after bonds linked to risky mortgage securities proved much riskier than expected in the credit crisis. If the company is unable to restructure by May 29, New York insurance regulators could take it over and manage its liquidation, which would allow them to prioritise claims.

However, the expected payouts from derivatives written against Syncora could feed into its chances of survival, people involved in the discussions said.

Syncora has been negotiating with banks since last July as it has attempted to write off or “commute” some of the $56bn of guarantees that SCA wrote on collateralised debt obligations.

At least some of the 13 banks involved in the talks could get payouts on the triggered derivatives, which may make them more willing to write off or reduce their other claims.

The Syncora saga highlights how complex and intertwined different parts of the credit and derivatives markets have become. Investors are seeking to find out whether the recent break-up of MBIA, the biggest bond insurer, triggers payments on credit derivatives on the group.

LET'S GUESS: WHO COULD THESE 13 UNRELENTING BANKS BE???

The banks undergoing the 'stress tests'


:crazy:

http://www.motherjones.com/politics/2009/05/who-shredded-our-safety-net

LIKE MOST PEOPLE whose quality of life depends upon the fluctuations of an IRA, 401(k), 403(b), or other acronym-soup retirement account, I was born long before such things existed. It's easy to forget, now that more than half of us have been made shareholders, that until well past the middle of the 20th century, most people had nothing to do with the stock market: Wall Street was for the wealthy and the reckless. It was a world most Americans didn't understand and, after 1929, didn't trust. Some lucky people had pensions, but few had the privilege of even thinking about retirement. They were too busy trying to survive the present—which in my childhood meant the Great Depression and then World War II....

Dueling views of the economic crisis and its cure.

So often discussion of economic policy drifts into “decade talk.” Some argue our problems are the result of the 1980s’ deregulation binge. Others point to our “irrational exuberance,” a term synonymous with the 1990s’ stock market boom. At a New York Review of Books panel on the economic crisis Thursday, financial historian and Harvard Business professor Niall Ferguson and Nobel-prize winning economist and New York Times columnist Paul Krugman sparred over two other decades: the 1970’s and the 1930’s.

To have Ferguson explain crisis management, there are two doctors to call upon in a recession: There’s Dr. Friedman and there’s Dr. Keynes. Unfortunately, to him, one of those docs has medicine that expired long ago.

“It says 1936 on Dr. Keynes’ bottle,” said Ferguson. The global climate is different today-America is no longer an insular economic entity, and protectionist policies don’t have the same applicability that they did 70 years ago, argued Ferguson. “If you want to try the Soviet model, fine,” said Ferguson, meeting gasps and hisses from the Krugman-cheering set. “Where were you in the 1970s’ when all these great regulations were in place? I don’t remember this going too well.”

To Krugman, however, this pill could end up making us sick. Instead, we need New Deal-era boldness and aggressive government action. Krugman is the easy one to cheer for. After all, it certainly feels like the 1930s. Public animosity toward the private financial sector is at an all-time high, and we have a president who’s easy to trust. Big government rarely finds such a welcome audience.

…more…

http://www.thebigmoney.com/blogs/sausage/2009/05/01/krugman-vs-ferguson-battle-decades

Every CEO sought to buy up a stable of unrelated businesses to "diversify". I'm sure it was mostly bought on credit, too, or stock swaps, thus weakening the original business. The multiple challenges of managing diverse divisions also distracted management and spread it too thin.

The Conglomerate was chosen because Anti-trust laws kept the CEO from buying up his competition, or his suppliers (vertical integration). These laws used to be enforced religiously.

The results were on the whole dismal. Some biggies, like GE and Raytheon, got bigger (but not necessarily better), but others, like Transitron, which my own father took for a spin, crashed and burned. Within a decade, conglomerates were disinvesting, spinning off the divisions they couldn't manage or understand or crashed, or stripping them of all assets as cash cows and then letting the workers fend for themselves. There were corporate body parts all over the place.

Then came the oil crisis, the end of Vietnam, Watergate, Carter and his energy program, and Reagan, who brought back the bad old days, in spades.

Ferguson is a con man. Ignore him. He's Friedman in historian's clothing.