STOCK MARKET WATCH, Tuesday March 24

Source: du

STOCK MARKET WATCH, Tuesday March 24, 2009

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

AT THE CLOSING BELL ON March 23, 2009

Dow... 7,775.86 +497.48 (+6.40%)
Nasdaq... 1,555.77 +98.50 (+6.76%)
S&P 500... 822.92 +54.38 (+7.08%)
Gold future... 952.50 -3.70 (-0.39%)
30-Year Bond 3.69% +0.04 (+1.07%)
10-Yr Bond... 2.66% +0.04 (+1.33%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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Read more: du

A Date That Shall Live In Infamy
BY ROB KIRBY

Mark it on your calendar folks – Wednesday, March 18, 2009, the demarcation point - the date that the U.S. Federal Reserve publicly acknowledged that they will monetize the nation’s debt. While we suspect that the Fed has been doing so for quite some time – on the ‘Pirates of the Caribbean sly’ – the public disclosure that the Fed is resorting to quantitative easing has signaled a clear shift to the long predicted hyper inflationary end-game gyrations which historically have manifested themselves in virtually ALL irredeemable fiat money systems.

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

Much talk about Zimbabwe dollars in this one...

So it is time to reenter the stock/equity market. Right?

Too many companies are riding the thin edge of going out of business.

At least that is my take on it.

Back in the 1990s, several "way overvalued" "tech" stocks were added to the S&P 500 Index. That meant that other companies had to be removed from the index. Fund managers were compelled to buy these tech companies at wild overvaluations. When the tech bubble burst, the S&P 500 Index funds were bursted with it. That hurt.

This makes a case for Mr. Bogle's Vanguard funds that are not index funds, but are managed to minimize trades to keep expenses down.

KUALA LUMPUR, Malaysia – Oil prices eased Tuesday in Asia but stayed above $53 a barrel on hopes that the U.S. government's move to purge ailing banks of up to $1 trillion of toxic assets could speed up economic recovery.

Benchmark crude for May delivery fell 53 cents to $53.27 a barrel by midafternoon in electronic trading on the New York Mercantile Exchange. The contract climbed as high as $54.05 on Monday before settling at $53.80, up $1.73.

.....

Better-than-expected U.S. housing news on Monday also supported oil prices. The National Association of Realtors said sales of existing homes rose from January to February. But the median sales price plunged to $165,400, down 15.5 percent from $195,800 a year earlier. That was the second-largest drop on record.

.....

In other Nymex trading, gasoline for April delivery fell 0.8 cent to $1.4800 a gallon, while heating oil dipped 1.8 cents to $1.4525 a gallon. But natural gas for April delivery gained 1.7 cents to $4.311 per 1,000 cubic feet.

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

WASHINGTON – Treasury Secretary Timothy Geithner said Monday that the severe banking crisis shows the U.S. financial system failed a major test and is in need of an overhaul.

Geithner told a Washington conference that the Obama administration plans to work with Congress to put in place a stronger, more stable system with a modernized government regulatory structure.

....

The administration will urge Congress to grant it the authority to take over major troubled instutions whose collapse is judged to pose a threat to the entire financial systmem.

The administration would have the power to limit payments to creditors and to break contracts for executive bonuses, the issue that raised the furor with AIG.

http://news.yahoo.com/s/ap/20090324/ap_on_bi_ge/geithner_regulations

March 24 (Bloomberg) -- Treasury Secretary Timothy Geithner’s plan to remove banks’ distressed assets cleared its first hurdle, triggering the fourth-best day for U.S. stocks since the 1930s. The next hurdle: showing results soon enough to convince a skeptical Congress to approve more money.

With regulators scheduled to complete their review of banks’ capital needs by the end of next month, the Treasury may need to seek $750 billion or more to offset writedowns on the loans and securities, analysts say. The Obama administration’s task will become even more difficult if the Geithner plan isn’t perceived to be working by then.

....

By employing private investors, the administration is betting it can avoid the strategy advocated by Nobel laureate Paul Krugman and ex-Treasury Secretary James Baker of the government taking over banks loaded with toxic debt. At the same time, Geithner is seeking to address the devalued assets, rather than leave them on balance sheets as authorities in Japan did in the 1990s at the cost of economic stagnation.

http://www.bloomberg.com/apps/news?pid=20601068&sid=aleTA7vzVA2k&refer=economy

which somehow or other doesn't seem to be a whole lot different from AIGFP's plan, except not as profitable.

AIGFP fell apart basically because it couldn't cover its bets, to the tune of $500B. Right? While it was doing this, however, it was "making" enough money to pay and/or at least promise huge bonuses to its execs.

If the govt. is now going to cover those bets, sans bonuses, what's the diff? We don't have half a trill lyin' around either.

I still don't see this thing workin' out well.

We need a torch smiley and a pitchfork smiley. :grr: and :nuke: just don't quite get it.


Tansy Gold

talk about a slippery slope!

I thought the Treasury wanted power to control failed banks, not the FDIC. What did I mis-understand?

and everybody says the govt. hasn't got the right to do so. See post below.

As to why he doesn't do banks--anybody's guess! I don't think the Big Banks have taken on enough "non-bank" aspects so that the rules don't apply to them....

Remember Shock Doctrine...
They have driven the economy to the edge of the cliff by NOT enforcing the regulations, and now want to use the ensuing "crisis" to grab total control over the monetary rules.
This is very very dangerous for what is left of our economy and government.

HONG KONG – Asian stock markets extended their rally Tuesday after Wall Street surged on hopes a U.S. plan to rid banks of festering debts at the heart of the financial crisis will revive growth in the world's largest economy.

The gains were somewhat muted compared to those in the U.S., where leading benchmarks jumped around 7 percent or more, Asian shares climbed ahead of Monday's announcement about the government's latest measure to heal the banking industry. Financial firms across the region once again helped lead the gains, while a sliding yen buoyed Japanese exporters.

.....

In Japan, the Nikkei 225 stock average gained 272.77, or 3.3 percent, to 8,488.30, and Hong Kong's Hang Seng index was up 464.35points, or 3.5 percent, at 13,911.77. South Korea's Kospi gained 1.9 percent to 1,221.70.

Elsewhere, Shanghai's index rose 0.6 percent, Australia's stock measure added 0.8 percent and Taiwan's benchmark was up 2.3 percent. India's Sensex traded 1.3 percent higher at 9,542.33.

http://news.yahoo.com/s/ap/20090324/ap_on_bi_ge/world_markets

Tue Mar 24, 2009 6:16am EDT FRANKFURT, March 24 (Reuters) - European stocks dipped early on Tuesday, weighed down by commodity shares and breaking a three-day winning streak after euro zone and UK macro data showed job losses and higher inflation.

At 1005 GMT, the pan-European FTSEurofirst 300 .FTEU3 index was down 0.1 percent at 738.76 points. The index is down about 11 percent this year, but has recovered about 14.8 percent since falling to a record low on March 9.

Commodity shares tracked weakness in oil and metal prices.

Anglo American (AAL.L), Rio Tinto (RIO.L) and BHP Billiton (BLT.L) were all down 4.5 to 5.9 percent as copper fell more than 2 percent, while Royal Dutch Shell (RDSa.L) fell 2.3 percent.

...

However in Europe banks gave up early gains, with Credit Suisse (CSGN.VX) down 2.6 percent after it said it would ask shareholders for the option to raise equity capital. HSBC (HSBA.L) fell 6 percent on worries about Asian growth.

...

British consumer price inflation rose unexpectedly to 3.2 percent in February, while key figures from euro zone services and manufacturing activity showed the economy's contraction eased a bit, while companies continue to slash jobs.

Across Europe, the FTSE 100 .FTSE index was down 1.2 percent, Germany's DAX .GDAXI was up 0.1 percent and France's CAC 40 .FCHI lost 0.2 percent.

Analysts sounded a cautionary note on the U.S. plan.

"It is every policy maker's dream that the private sector will realise that assets are mis-priced and pour in capital to correct such a mis-pricing," Credit Suisse said in a global equity strategy note on Geithner's plan.

"In reality, the private sector is shell-shocked, ultra cautious and at the very least such an allocation of capital will take some time to implement," Credit Suisse said.

/... http://www.reuters.com/article/marketsNews/idCALO23150620090324?rpc=44&sp=true

Tue, Mar 24 2009, 09:28 GMT LONDON (Dow Jones)--The German economy continued to contract in March, but at a less rapid pace than the series low reported in February, as manufacturers and service providers reported an improvement in activity, data showed Tuesday.

According to the Markit Economics purchasing managers index, the preliminary estimate of the Purchasing Managers Index for Germany's manufacturing sector rose to 32.4 in March from 32.1 in February, while the PMI for the services sector rose to 41.7 from 41.3 a month earlier.

...

A reading above 50.0 indicates the sector is expanding, while a reading below 50.0 indicates it is contracting.

The gains in the manufacturing and services PMI came as a surprise. Economists surveyed by Dow Jones Newswires last week had forecast the manufacturing index would fall to 31.9, while the services index would fall to 40.7.

The composite index for private sector activity also increased in March to 37.7 from 36.3 in February.

...

Despite the gains, however, the flash survey reports companies are continuing to make further "downward adjustments to their workforce levels," Markit Economics said.

March was the sixth straight month in which businesses reduced staff, with the rate at which jobs were cut in the manufacturing sector rising to a new survey record. For the services sector "jobs losses were only modest," Markit Economics said.

Markit Economics also reported that incoming new business remained weak as this measure contracted for the eighth straight month in March. Although, as with the total manufacturing and services measures, the pace of that contraction eased from the survey low recorded in February.

/.. http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=f15e54cd-3785-45b3-96ed-2796cee0929e

WASHINGTON (Reuters) – The Obama administration on Monday offered a raft of incentives for private investors to help rid banks of up to $1 trillion in toxic assets that plunged the world economy into crisis.

....

Analysts cautioned that success would depend on whether banks are prepared to sell assets cheaply or want to wait in the hope of getting a better price when the economy recovers.

....

Nobel Prize-winning economist and New York Times columnist Paul Krugman slammed Geithner's plan.

In his Monday column, Krugman said it was a rehash of a "cash-for-trash" proposal the Bush administration floated last fall, and that the incentives meant investors could profit if asset values increase but "walk away" if they fall.

http://news.yahoo.com/s/nm/20090323/bs_nm/us_financial_usa_bailout_15

My apologies, UpInArms, for stepping on your subject with this post about such a weighty issue.

China's central bank has called for a new global reserve currency run by the International Monetary Fund to replace the US dollar.

Central bank governor Zhou Xiaochuan did not explicitly mention the dollar, but said the crisis showed the dangers of relying on one currency.

With the world's largest currency reserves of $2tn, China is the biggest holder of dollar assets.

....

On Tuesday, the dollar weakened against most major currencies following the announcement of a US plan to buy up toxic debt.

http://news.bbc.co.uk/2/hi/business/7960620.stm

Mon Mar 23, 2009 3:00pm EDT By Sebastian Tong and Peter Apps - Analysis

LONDON (Reuters) - A push by the world's leading emerging economies to dislodge the dollar as the dominant global reserve currency appears to be gaining momentum even as a weakening greenback adds further urgency to the discussion.

/Read on... http://www.reuters.com/article/wtUSInvestingNews/idUSTRE52M5UZ20090323?sp=true

FACTBOX-The appeal of the IMF's Special Drawing Rights: http://www.reuters.com/article/marketsNews/idUKLO18987920090324?rpc=44&sp=true

However, meanwhile (related?):

Japan finmin says to use reserves for fx stability

Tue Mar 24, 2009 12:48am EDT TOKYO, March 24 (Reuters) - Japanese Finance Minister Kaoru Yosano said on Tuesday it was important to use the nation's foreign reserves for currency market stability amid the financial crisis.

Yosano's comments came after Washington unveiled a plan on Monday to take on huge sums in toxic assets and China vowed to keep buying U.S. government debt, with about two-thirds of its nearly $2 trillion worth of reserves seen in dollar assets.

...

"The appropriate level of reserves is an important issue, but there's no international consensus," Yosano told a financial committee of the upper house of parliament when asked how Japan should manage its currency reserves amid the financial crisis.

"In Japan's case, we'll continue to use our reserves to promote currency market stability," he said.

Japan's foreign exchange reserves totalled $1.009 trillion at the end of February, the second-largest in the world after China.

/... http://www.reuters.com/article/marketsNews/idINT31615420090324?rpc=44&sp=true

Get the feeling they have a revolving door for economic policy wonks?

bend over to get screwed while holding a shitload of debased US currency. They'll soon have no choice but to break their peg to the dollar and there's no way they want to see a strong yuan at this stage of the game. They don't want to play the role of Japan in the last go around with the Plaza Accord.

This will be my last post for a few days Marketeers. My partner has urged me to take a break from all this stuff, and to be honest, she is right. I'm suffering from severe outrage fatigue, and even DU is far too poisonous with delusion and willful ignorance for me to deal with right now. I need to take some time. We are getting a new Kitten today, and this is the perfect time to heal the soul and the mind.

Now back to The Great Disintegration, Already In progress.....

Well, we have officially moved into the territory of true Economic Terrorism.

Last night, as they have done every night since this whole nonsense began, the Futures immediately dove off a cliff to -60, and were VERY quickly deteriorating.

Then of course, it happened.

"The Plan" heard round the world.

Goofy announced his new and improved "Toxic Assets" plan, (you know, the one he previously abandoned because the "Costs were too high", along with the Japanese announcement of their "Stimlus" (Well, they HAD to do something now that their Export Market has collapsed and they have NOTHING to sustain growth on), and of course we got one of the silliest, most obnoxious days in the Market any of us have ever seen.

Treasury Presses Ahead With Plan For Toxic Assets

The Treasury Department will unveil the next step in its financial rescue efforts tomorrow, announcing that it intends to create a government body, called the Public Investment Corp., to finance the purchase of as much as $1 trillion in soured loans and toxic assets from ailing banks, according to sources.

The plan calls for the new entity to combine its resources with the Federal Deposit Insurance Corp., the Federal Reserve and private investors to buy those loans and other assets. But the government will put far more money into the deals and take on more risk than the investors, which could include hedge funds, private-equity firms, pension funds and foreign investors with U.S. headquarters, the sources said. The corporation will be funded with $75 billion to $100 billion from the $700 billion financial rescue package.

Key details of the toxic asset purchasing program are not yet finalized, said officials in contact with the Treasury. Some expressed concern that the markets would expect too much out of Monday's announcement. When Treasury Secretary Timothy F. Geithner first sketched out the administration's rescue plan last month, he was criticized on Wall Street and on Capitol Hill for being too vague and creating uncertainty in the markets.
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The Obama administration also risks a backlash from lawmakers and ordinary Americans who expressed outrage over $165 million in bonus payments by American International Group to employees of its most troubled unit -- despite the firm receiving more than $170 billion in federal aid.
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/21/AR2009032102246_2.html?hpid=topnews

Most who are awake can see Goofy's plan for what it is. A huge gambling stunt at the expense of the rest of us, and more kowtowing to the Banks. I have yet to hear a sane explanation of how this would help the economy, other than repeated, robotic like parroting of Propaganda, and INSANE rationalizing that makes even LESS sense than the way Goofy explained it.

But once again, vaguely worded and mostly detail free Plans were able to drive the Market up yet another 7% based on NOTHING.

Now, onto other atrocities. I would now ask all of you, at least those of you who are lucky to have some in this economy, to reach inside your pockets and pull out any spare cash you have and look at it.

See that weird chalk outline around your precious green bills. I've bet you've been wondering what that is. Well, it's there because Helo Ben committed Murder last week.

By way of his unprecedented Monetization, he has effectively put the Dollar in play to be euthanized. I know the awake have been following the progress of the Dollar the past few days. After a 2.5% Death Spiral right after the announcement, it has steadily continued upon it's downward course.

Now, of course, the Sheep who keep lathering themselves in "Hope" and sucking off their State Sponsored Propaganda Juice Boxes, don't want to talk about this. And who can blame them? TPTB and The Financial Media haven't given them any talking points or told them how to think about that particular issue, and besides, it makes them feel uncomfortable, so it doesn't exist.

Another thing that doesn't seem to exist is the escalating talks between Russia, China, and other developing countries about REPLACING the Dollar as the World's Reserve Currency.

Here's more insight into that. Now remember, it doesn't exist, so you aren't actually reading this. The Recession is over, the Recovery is in full swing, and everyone who tells you differently is a Conspiracy theorist, and a Bullshit Artist.

Got it? OK, read on (but not really. Reuters doesn't exist.)

China backs talks on dollar as reserve -Russian source

By Gleb Bryanski

MOSCOW, March 19 (Reuters) - China and other emerging nations back Russia's call for a discussion on how to replace the dollar as the world's primary reserve currency, a senior Russian government source said on Thursday. Russia has proposed the creation of a new reserve currency, to be issued by international financial institutions, among other measures in the text of its proposals to the April G20 summit published last Monday.

Calls for a rethink of the dollar's status as world's sole benchmark currency come amid concerns about its long-term value as the U.S. Federal Reserve moved to pump more than a trillion dollars of new cash into the ailing economy late Wednesday.

Russia met representatives of China, India and Brazil ahead of the G20 finance ministers meeting last week, as the big emerging powers seek to up their influence on decision making globally. Their first ever joint communique did not mention a new currency but the source said the issue was discussed.

"They (China) did not formally put forward their position for the G20 summit but unofficially they had distributed their paper regarding the same ideas (the need for the new currency)," the source told Reuters, speaking on condition of anonymity.

http://www.reuters.com/article/usDollarRpt/idUSLJ93633020090319

http://www.itar-tass.com/eng/level2.html?NewsID=13682035&PageNum=0

Wow, I'm certainly glad that doesn't exist or we would all need to be a little worried, huh? I'm SO Glad it's JUST a kooky CONSPIRACY THEORY. :mad:

Here's another interesting snippet that doesn't exist:

The Russian source said Moscow was aware that the emergence of the new global currency would not happen overnight and said its goal was to initiate a discussion about it at the G20 summit in London on April 2.

Now isn't it INTERESTING That this little issue that doesn't exist comes about after the announcement that the Fed is going shopping in it's own house?

The biggest problem with this scheme, which also doesn't exist, is that it will have a dangerous devaluing effect on The Dollar. IF THIS DEVALUING GETS OUT OF HAND, then China will be force to consider DIVESTING in it's debt that it holds.

Checkmate.

And if you thought THAT was bad, it turns out that NOW they have introduced a Bill that would allow them to come after your Pensions as well. (It doesn't exist of course, but let's take a look)

US Rep Proposes Bill To Use Pension Assets For Banking System

WASHINGTON -(Dow Jones)- A ranking member of the House Financial Services Committee has proposed legislation that would allow public pension funds to buy preferred stock from ailing U.S. banks, prompting apprehension from public pension plan trustees.

The legislation introduced by Rep. Gary Ackerman, D-N.Y., offers public pension funds a guaranteed rate of return in exchange for buying the preferred stock, or for loaning the government their money to loosen the credit freeze.

"By guaranteeing public employee pension fund investments in financial institutions, the federal government will use its balance sheet as a way to inject much needed funds into the nation's banking system rather than using more public money," the New York Democrat said.

However, trustees of pension funds for teachers, police officers, firemen, and state and local municipality workers are fretful that the attractive arrangement could lead to some government restrictions on funds down the road.

http://money.cnn.com/news/newsfeeds/articles/djf500/200903181422DOWJONESDJONLINE000870_FORTUNE5.htm

Here a couple of more things that don't exist:

U.S. Central Credit Union may form "bad bank": CEO

By Carey Gillam

KANSAS CITY (Reuters) - Two days after regulators seized the largest U.S. corporate credit union, the newly installed CEO said he is considering a variety of options, including setting up a "bad bank," to handle a mixture of troubled mortgage assets.

Several options are on the table at the $34 billion-asset U.S. Central Federal Credit Union, said new CEO James Nance, who quit as chief administrative officer at Icap Capital Markets Llc in New Jersey to helm the Lenexa, Kansas-based institution at the request of regulators.

In addition to setting up a separate entity, a so-called "bad bank," to take toxic assets off the books of U.S. Central, Nance told Reuters in an interview that he will look at options for securitizing the troubled assets in ways that would allow for them to be held for an extended periods, and he will explore the sale of certain assets to non-credit union buyers.

"We want to try to avoid having the situation deteriorate," said Nance, who prior to his work at Icap, oversaw asset and liability management at U.S. Central from 1993-1996.

http://www.reuters.com/article/ousiv/idUSTRE52L1S920090322

And remember How GE didn't need anymore help and was doing just fine?

Moody’s downgrades GE and GE Capital to Aa2

http://ftalphaville.ft.com/blog/2009/03/23/53907/moodys-downgrades-ge-and-ge-capital-to-aa2

What does it take to get people to wake up? What does it take to get people to stop wandering aimlessly toward the slaughterhouse?

Probably the most sickening thing about today was all the celebrating by the Public. They actually BELIEVE there is some "there" there, and they are not interested in the details, and if they bother to look under the hood, they are taking everything at face value. The "Toxic Assets" were not the only thing hazardous today. I have never seen DU this poisoned and drunk on Propaganda, and caught up in full faith of what is nothing more than yet another fleecing by TPTB.

Many people seem to lack the simple understanding that they can manipulate and inflate the markets all they want, even back up to the level it was at before the Collapse. But if there is NOTHING FUNDAMENTAL AND TANGIBLE to support these inflated prices, and there is no change in the fundamentals of the economy itself, and MAIN STREET continues to worsen with failed businesses and high unemployment, falling wages, deteriorating incomes, record bankruptcies, etc. THEN THE MARKET WILL COLLAPSE AGAIN. And it's all irrelevant anyway, because the Stock market artificially inflating is not going to pay people's bills, put food on the table, create jobs, and provide the economy with a REAL FOUNDATION for true sustainable growth.

But so much of our population is no longer interested in any kind of real reality. They are interested in feeling good, and the heroin high of manged perception. And if you try to explain what is really going on, you will be met with hostility, insults, and general childish bullying that sounds like being cornered at a party by an obnoxious drunk.

After sparring with a few of these sad, misguided people last night, I have pretty much made the decision that all of my posting from here on out will be regulated to this thread, because frankly I can no longer deal with empty heads who would rather treat this like supporting your favorite NFL team, than the Fate Of the Country Itself.

They live in a Bubble that has about as much substance in reality as the current Stock Market Bubble.

And I have something to say to those "Good Americans", who not only continue to cheer this on, but are harassing, shouting down, and even going as far to THREATEN (This has not happened on DU, to be clear. YET) those of us who refuse to go along with the charade, and silence our voices:

SHAME. ON. YOU.

It has become crystal clear that you have no interest in the truth.

It has become crystal clear that you have no interest in looking past the surface of the Propaganda, and that you put more trust and value in those that have LIED to you and FLEECED you with RECKLESS ABANDON, time and time again than those who are guilty of nothing more than GIVING A SHIT ABOUT YOUR BEST INTERESTS, and the Interests of OUR COUNTRY.

It has become Crystal clear that You would rather be told by TPTB what to think, so you can strut around with your chests out, preening like ridiculous looking Peacocks, and ensconce yourselves in the protective womb of whatever false paradigm you adopt, so you don't have to THINK, or actually take ACTION, or have to CONFRONT any kind of difficult Truth.

It has become crystal clear that you would willingly sacrifice the well being and the futures of not only yourselves, but your family, your children, your neighbors, your countrymen, YOUR COUNTRY, and not only your generation, but the generations of those who will come after you. All so you can glide along in the heroin high of the Con of the Quick Fix.

Oh, you don't care HOW anything gets fixed, or what the consequences or details are, you just want to GET YOUR FIX.

You just want it taken care of, and you'll blindly believe and follow whatever you're told, and go along with whatever is done, and never look past the surface to see if there is a danger or a threat of creeping fascism or the red flags of tyranny, EVEN IF THE THREAT COMES FROM YOUR OWN PARTY.

You know, there was another people who thought this way, long ago in a far away land, about 80 years ago. They blindly followed, and willfully ignored too.

Are you so wedded to delusion that you have forgotten the history of how that worked out?

Or does history have to repeat itself AGAIN, to give you a gentle reminder of the importance of GIVING A SHIT?

You are acting like Sheep.

You are displaying disgusting COWARDICE.

And you just can't be bothered to look Past the Propaganda and the lies to stand up for yourself, stand up for your COUNTRY, or STAND FOR ANYTHING.

You DISAPPOINT me.

There was a poster on another thread last night that put it pretty succinctly.

The lines have been drawn and the sides have been chosen, between the Sycophants and The Patriots.

And in the end, it all comes down to a single question.

WHY, at the very least metaphorically and philosophically, do the rest of us have to DIE, because you refuse to LIVE, or even be bothered to LOOK past the Surface to make sure that beautiful new Porsche you bought this past fall doesn't have a Yugo engine in it?

This is not a fucking Football Game.

This is not a spectator Sport.

This is not March Madness.

This is NOT a Party, Nor is it A Disco, and We The People MUST Stop Fucking Around.

This is LIFE and DEATH.

This is the future of OUR COUNTRY. And it will be decided based on the circumstances and the environment we currently find ourselves in, whether you choose to wake up to them or not.

STOP being part of the PROBLEM.

Because if we are ever going to reach any real solutions, WE NEED YOU. We need EVERYONE.

Are you REALLY willing to sacrifice the entire future of your country, just so you can feel good about a few weeks, maybe a few months AT BEST of another fake Stock market bubble that will eventually collapse, leaving in it's wake even WORSE problems than before?

Are you so invested in "The Football Team" that you are willing to sacrifice EVERYTHING just to support them, even though it is becoming crystal clear they do NOT support or REPRESENT YOU?

Stop LISTENING to what they are SAYING, and PAY ATTENTION to what they are DOING.

It is almost TOO LATE.

LEARN From History.

And it appears for many of us, before we can do that, we must first take one very important step.

UNLEARN.

There are days when I just want to throw my hands up and give up on this Propagandized Purgatory that has become our Nation.

But as Samuel L. Jackson once said in Pulp Fiction:

"I'm trying, Ringo.....I'm Trying REAL HARD......

To Be The Shepherd."

Democracy don't rule the world,
You'd better get THAT through your head.
This world is ruled by violence
But I guess that's better left unsaid.
From Broadway to the Milky Way,
That's a lot of territory indeed
And a man's gonna do what he has to do
When he's got a hungry mouth to feed.

Well, it's sundown on the union
And what's made in the U.S.A.
Sure was a good idea
'Til greed got in the way.

-Bob Dylan

Yes, there will be a lot of senseless loss, death, destruction, etc.

Find those who are with you, support your goals, and cleave unto them. It's time to break into groups, because the whole is rotten with error.

and watch your blood pressure. Sometimes letting go is the only way to grasp anything worth having.

I'm babysitting a crazy golden retriever for a couple of weeks. He provides enough distraction to keep me off DU a little and keep things in perspective.

I'm on vacation this week, and I have a feeling that being on DU is perhaps not the most relaxing way to spend my time.

I did taunt the cheerleaders here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=132x8286095

Many didn't realize I was taunting them. It's frightening, frustrating, and terrifying. Enjoy your break!

Song for the day...
http://www.youtube.com/watch?v=OlUigSXxgG8


edit: reading your thread reminded me of this song

It could drag on for a while.

Where do the concerned hide the little money left?

Exactly. It depends on transferring as much of our money from us to them. After 'they' have it all, all from the stock market, all from our 401Ks, all from our IRAs, all from our savings, then the crash will occur.

We're still trying to figure out the best place to hide a little money. Maybe bury it in the ground? Maybe put it in a fireproof safe that is hidden in the wall? Maybe in the freezer?

Even hiding dollars won't help when they become worthless.

I hate this.

At least the dollars are in something of value, forever. I'd buy gold bars, but they are way too expensive. Besides, I can't take a gold bar to the grocery to buy food. I might be able to barter a gold ring for food though.

It's enough to make your head spin.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x3797978#3798025

Were these people always here? Or have I changed?

I try to avoid most of DU anymore.

They tolerate no dissent. whatever fearless leader says, it's gospel to them.


the alert button is my friend. :evilgrin:



Tansy Gold, DEFINITELY "undergound" (well, figuratively if not literally)

"WHY, at the very least metaphorically and philosophically, do the rest of us have to DIE, because you refuse to LIVE, or even be bothered to LOOK past the Surface to make sure that beautiful new Porsche you bought this past fall doesn't have a Yugo engine in it?"

The echoes of Ayn Rand are chilling, because that was supposedly the heart of her "philosophy," that only those who shook off the obligations of living in a society were worthy of living in it.

And that, of course, is what we have become, awash in, drowning in a tsunami of irrational greed. It doesn't have to be that way. Poverty is created and can be alleviated. Fear and war are created and can be alleviated.

There is a marvelous paragraph in Joanna Russ' "What Are We Fighting For?" that, though directed originally at patriarchy and the oppression of women, addresses the issue of any and all oppression: that it begins with exploitation and morphs into a self-perpetuating ideology. I'll quote it later, when I have more time, but my point is that we've never gone after the ideology that maintains our current system of financial exploitation.

Greed is not good. Greed kills.



Tansy Gold

That was the hope of the neo cons. They've been very busy setting up their oligarchy for the beautiful few for the past 28 years-- now the many are trying to get some of it back. But because this is America, some of the many have gotten footholds in the way of life of the elite. They are angry as they see the portal closing before them.

Left out in the cold with so many, they are afraid and angry.

That's how all this looks from my vantage point.

Oh, I am fully awake, it's trying to wake the sheep that is so difficult.

Well, spouse is half-way awake. He sees unemployment rising, huge GM factories closing, multiple bailouts to banksters, and yet he still believes that there will always be plenty of electricity, heat, gasoline, water and food. He thinks I'm obsessed for stockpiling food, ibuprofen, and toilet paper. He feels when people begin starving, the government will hand out boxes of food. He refuses to think otherwise because that would mean riots.

But my family and friends are still in denial, as most people are. Hey, the stock market is rallying! Full recovery in a few months! Restaurants are packed, 1 hour wait at the popular eatery. Obama, Bernanke, Romer, Summers, and CNBC are all on TV telling us that it's really not that bad.

When the crash comes, family and friends will wish they had read all those articles and watched all those videos that I sent to warn them and how to prepare. I saved all those emails, and I can resend. Hopefully we still have the Internets.

edit for clarity

for my deep well in May. I figure it is as good an investment right now as anything else. I am also trying to pay off my mortgage early by paying extra on it each month. Pantry is full, garden and fruit trees are in. Five chickens in the coop. Either way it ends up if I can keep my house I will be a whole lot better off than many.
I don't even bother looking at my IRA statements anymore. I am just writing them off. I feel a lot better not worrying about it. I was getting too depressed.

Just make sure you're back in a couple of days.

You're right that DU has gone pretty much nuts. Outside this thread, it's populated more and more by sheep and lemmings. It's funny how, the more things change, the more they remain the same. I remember reading a story about East Germany after the collapse. They interviewed a bus driver who was sad to see communism go away. In the old days, he didn't have to think about anything. All major decisions were made for him. Now he had to think for himself, and make his own decisions, and he wasn't liking it. He was scared.

Another 125,000 people lost their jobs yesterday. Another 125,000 will lose their jobs today, and again tomorrow. But, that's OK. The Dow was up 500 and the Bankers, Hedge Funds, and Equity Groups are set to make a killing. The recession is over for them. Our depression is just getting up a head of steam. But, that's Ok. Orwell-, er Obama has the mic, and we've got change we can make believe in.

I won't give you a Golden Glob, dear doctor, because the quote is far too serious for teasing.

The Obamabots on DU are indeed frightening. I suspect most of them are young and eager and haven't learned how to be afraid.

May they learn without having to learn the hard way.



Tansy Gold

"Obamaphiles".

Some are older and enthusiastic newbies. A friend of mine is having some real problems with some of them. She's held elected office for most of her life. In New Hampshire, she founded state kindergarten in public schools, was elected to the school board, Alderman, and State Legislature. She moved to Florida about the same time I did, 6 years ago, and became active politically here.

She ran for State Senate last year and lost, in a heavily red district, and performed better than any other Dem candidate in the state. She won a position as a state committeewoman and was appointed to several key posts in the party.

In the meantime, the local Obamaphiles, with only 6 months campaign experience last year, took over the already inept county party, and made it dumber. The new County Chair is trying to throw her out, because she doesn't seek her guidance on EVERYTHING.

Obamaniacs. :scared:



Tansy Gold, who is avoiding the paying gig and really needs to get to it

People, myself included, wanted to believe progressive change was possible.

Edwards was my first choice in the primary, then Dodd, so obviously I'm easily bamboozled. The Clinton years were prosperous for America, but they weren't progressive. We all know where many of the Clinton policies led us, so Hillary didn't offer the kind of reform we needed. That left Obama, at least he said some of the right things. Now it is clear to me that none of the alternatives would be doing thing differently, there wasn't a real choice in the election as far as policy is concerned. If there is any doubt, look at what the Democrats are doing with their majority. Most people still want to believe the rhetoric, but they'll realize eventually, and too late.

Kucinich was my next choice, but since the media put him on Ignore, I went with Edwards. I kind of liked Dodd, until I spent an hour talking to him. Dumb as a box of rocks.

My last 2 choices were Obama and Clinton.

The fatal flaws in representative democracy are really being exposed. Greed and corruption are at the heart of it.

Solutions? I don't have any that are workable. That's for smarter people than me to figure out. But, I'm willing to listen.

He's really knowledgeable about foreign policy, especially Pakistan. Now there's a country sitting on a powder keg.

When Biden dropped out, it was Hillary or Obama. With Hillary, would we have her in office, or Bill again? So that left Obama. Obama sure speaks well, doesn't he?

So Obama is leading the sheep. Did I mention how well he speaks?

It seems to me that some group is pulling the strings behind Obama, similar to some group pulling the strings behind Bush. Not sure if this is the same group, but whoever it is, our country's policies appear to be the same.

Compared to Bush, isn't it nice to have Obama who speaks so well?

I think Americans are blindsided by Obama's rhetoric, and fail to see what's really going on in our country.

From the Council of Foreign Relations? It seems odd. I don't know that much about them, but it seems strange. Is that the real party?

Yeah, Biden was OK. I got to talk with him for about an hour, one on one. Real friendly, and a first-class bullshitter for sure. You'd want to go out drinking with him.

http://en.wikipedia.org/wiki/Council_on_Foreign_Relations

if you haven't already done so.

First, gaining understanding of the root causes of our problems instead of focusing on symptoms.

Interest (=usury) based economy leading to paradigm of continuous growth and fiat currency controlled by small elite sitting at the top of a civilization wide pyramid scam is not a bad place to lood for the root causes and places for the radical changes that are most essential. So getting rid of interest/usury and money as it now is could and should be the common nominator for any viable political philosophy. This is allready the third Federal Reserve of US, so as three's the charm let's make it the last one.

How to get there, as that kind of change is not going to happen overnight? Change starts at the bottom, from each of us, facing our demons and learning to learn, step by step. Starting to build many kinds of sprouts of alternative society, the "other world that is possible" - others may want to concentrate on tearing down this one and I'm not the one to throw the first stone, against those throwing stones or anybody. Making ourselves drops, drop by drop, in the current of real change that can only form drop by drop. Learning patience - if we find the patience to do that.

Learning gardening and gathering and other basic practical skills will never hurt anybody but can be great source of joy.

Not giving into hate and bitterness, which certainly does not mean denying also those feelings.

Dmitry Orlov discusses the prospects, compares the parallels and differences, and argues that the Soviet Union was much better prepared for collapse than we are in the US.
He discusses different ways of looking at food, shelter, transportation and security.

The audio of the talk Orlov gave on February 12 at Point Reyes Books, Point Reyes Station, Marin County, California. In it, the same ground is covered as the talk to a much larger audience in San Francisco on the following day. The difference is that while the San Francisco talk was 100% scripted, this one was 100% improvised.
http://web.mac.com/bgong/Site/Home_Page/Entries/2009/2/23_Dmitry_Orlov_speaking_at_Point_Reyes_Books.html


Dmitry Orlov: Social Collapse Best Practices
The Long Now Foundation
The following talk was given on February 13, 2009, at Cowell Theatre in Fort Mason Center, San Francisco, to an audience of 550 people.
http://fora.tv/2009/02/13/Dmitry_Orlov_Social_Collapse_Best_Practices


edit for a 2nd link

which means we have to outscream the corporations? I don't think that is a good way to take a poll.

He'd better smarten up about that. At least 50% of the people out there have no concept of what they want, and neither the time, education, motivation nor intelligence to figure it out. That way lie riots and civil disorder.

He's got to start listening to the educated and involved who owe no allegiance to any particular corporation. Why this doesn't come to him naturally, I have no idea. But I guarantee that it's totally against Rahm Emanuel's way of life!

1. Stop denying you are afraid. Fear denied is impossible to overcome.

2. Face the fear. What kills you makes you stronger... :)

My 'tipping point' being the following one-two-punch...

Learning that 'Single Payer' Healthcare had been tabled by the Obama Administration as quietly announced by
the Press Secretary Gibbs... (Boy, talk about missing a golden opportunity for change. :eyes: )

and then...

Finding out that Timmeh's Dad and Obama's Mom had a legacy business relationship... Meaning Timmeh ain't going anywhere.
One thing I've learned about these Ivy League-ers is that they are Cliquish... Oh, and they think Archeology using Bulldozers and Dynamite is science.

Welcome to the United States of Goldman Sachs. :patriot:

This is how it's going to work for "We the common folk". We'll get anything we want as long as it's no skin off of Goldman Sach's ass or doesn't crimp any of the established PTB. Energy, Insurance, etc.

Never mind that by ensuring that the one-percenters get their 15-20% returns makes our -1% earnings worthless -PRONTO-...
THEY DON'T CARE! THEY NEVER DID! THEY ARE ADDICTS! THEY WILL KEEP DOING IT TO SELF-DESTRUCTION! (and drag us along for the ride.)

So, I retired... Turned in my papers and hit the lawnchair, sunscreen, and wading pool.

I'm so relaxed!

Mama Hugin didn't raise any fewls... We're all aware that repeatedly :banghead: and expecting different outcomes is a sign of insanity.

Stop by for a cocktail sometime... I'm sure we'll come up with something to talk about. :)

The pool is a little deeper, and the liquor cabinet is always well stocked. Even though, lately I'm replenishing it a little more often.

I'll bring some adult beverages. I have shared my addy with a few of the regulars should something nasty happen. I think it might be a good idea. Helps create a community-and that friends is what WILL save us.

and doing with OUR Money! No sweat from them, they have nothing to lose. They will keep transferring whatever we have, to them, until we have nothing more.

Remember the fundamentals.

I've been greatly appreciating your, uh, scything, even Scythian analyses here in SMW.

I'd play you this, but that's maybe not quite the right tone. So, this: http://www.youtube.com/watch?v=wh9AC0jCGjY

Stay cool, Watcher.

:donut: and lurkers. Watcher, thanks for a well worded, well thought out post. I am reminded of that old cigarette ad-are you smoking more and enjoying it less. I have beaten my head against the wall so much since Obama took office and he made his 'economic' choices. Bush was lazy and stupid, surrounding himself with arrogant, greedy people. Obama is smart and hard working and surrounds himself with arrogant, greedy people. I am madder at Obama about the economy than I was at Bush at this time in their presidencies. At this time, he still has good will, but that will disappear faster than the bubbles in a soda if he continues down this path. He still has some control in this situation-but that will change very soon. It is time to get that old time populist religion when it comes to WS and banks.

I visited my brother during spring break. Let's just say we spent some bonding time target shooting and cleaning guns (really) while we discussed the current economic situation. All of WS will soon be like Bernie Madoff under house arrest-afraid to step out for fear of what will greet them. We were also making serious plans. His little farm is very sufficient with goats, a couple of cows, chickens, and a big garden and a small pond with fish. They have lots of kindling and the county produces coal, oil, and natural gas.

It is hard to post as I am discovering there is not enough Motrin or Pepto for what is going on. The kitten will do you good-I know feeding the kids and watching their antics helped me.

Happy hunting and watch out for the bears.

:hi:

Please take care of yourself and return to us soon. What is that old saying? Truth evolves through three phases - ridicule, denial and finally acceptance. Although I thought I'd never see the day this country would rather live on its knees, I still somehow manage to cling onto a bare thread of hope.

rest well - come back to the SMW refreshed and ready to hoist your sword once again

we will be here, ready to stand shoulder to shoulder - fighting the good fight

:grouphug:

UIA

I was afraid something had happened to you, Ozy! Hope today brings no nasty surprises, if it can't bring any good ones.

Want to be able to identify the perps if you meet them on the Street? View this photo gallery:


http://www.talkingpointsmemo.com/photofeatures/2009/03/villains-of-the-economic-crisis.php?img=1

We need to name the evildoers and put their faces out in public. There has been too much hiding behind corporate names.

I still can't get over how Angelo Mozilo has obviously embraced mobster chic. Look at the choice of clothes, the tan, the teeth, the hair. Just tell me this--does he wear a pinky ring?

and Paulson, and Geithner, and Bernanke?

maybe we should add in members of Congress, and Senators, the SEC?

and those behind the scenes pulling the strings

is my assumption.

http://www.nakedcapitalism.com/2009/03/guest-post-why-does-failure-merit.html


Submitted by Leo Kolivakis, publisher of Pension Pulse.


I want to follow-up on my last post, the Mother of all stealth scams?. In that post, I argued that the AIG bonus bonanza and the upcoming bank bailouts are distracting people from the bigger problem coming down the road, namely, the bailouts of public and private pension funds that are grossly underfunded.

I argued that the pension Ponzi scheme has been going on for many years as billions of dollars were funneled into alternative investments on the pretense that they provide diversification from traditional stocks and bonds and deliver absolute returns under all market conditions.

That myth was exposed in 2008 when all asset classes except for government bonds and gold got hit very hard, including alternative investments like hedge funds, private equity and real estate. The lag in private equity and real estate means that they will continue to struggle in 2009. Hedge funds are not faring any better.

It turned out that the push towards alternative investments had more to do with senior pension officers wanting to profit through bogus benchmarks and some of them even profited from illegal kickbacks from the funds they invested with.

Against this backdrop, the New York Times reports that the U.S. is rounding up investors to buy bad assets:

Obama administration officials worked Sunday to persuade reluctant private investors to buy as much as $1 trillion in troubled mortgages and related assets from banks, with government help.

The talks came a day before the Treasury secretary, Timothy F. Geithner, planned to unveil the details of the administration’s long-awaited plan to purchase troubled assets, meant to remove them from the balance sheets of banks and, in turn, spur banks to lend more money to consumers and companies.

The plan relies on private investors to team up with the government to relieve banks of assets tied to loans and mortgage-linked securities of unknown value. There have been virtually no buyers of these assets because of their uncertain risk.

As part of the program, the government plans to offer subsidies, in the form of low-interest loans, to coax private funds to form partnerships with the government to buy troubled assets from banks.

But some executives at private equity firms and hedge funds, who were briefed on the plan Sunday afternoon, are anxious about the recent uproar over millions of dollars in bonus payments made to executives of the American International Group.

Some of them have told administration officials that they would participate only if the government guaranteed that it would not set compensation limits on the firms, according to people briefed on the conversations. The executives also expressed worries about whether disclosure and governance rules could be added retroactively to the program by Congress, these people said.

A spokeswoman for the Treasury declined to comment on the conversations over the weekend.

Administration officials took to the airwaves Sunday to reassure investors that the public would distinguish between companies like A.I.G., which are taking government bailout money, and private investment groups that, under this latest plan, would be helping the government take troubled assets off the books of some of the country’s biggest banks.

“What we’re talking about now are private firms that are kind of doing us a favor, right, coming into this market to help us buy these toxic assets off banks’ balance sheets,” Christina D. Romer, the White House’s chief economist, said in an interview on “Fox News Sunday.”

“I think they understand that the president realizes they’re in a different category,” she said, adding, “They are firms that are being the good guys here.”

Last week, the House passed a bill that would impose a 90 percent tax on bonuses paid since Jan. 1 by companies that owe the government at least $5 billion in bailout loans. This week, the administration is planning to call for increased oversight of executive pay at all banks and Wall Street firms.

Private equity firms and hedge funds have historically been only lightly regulated and have not been subjected to the same disclosure requirements that are applied to banks and trading companies.

Mr. Geithner faces a highly charged and politicized audience when he introduces the troubled-assets plan on Monday, after a week filled with vitriolic attacks over his handling of A.I.G. bonus payments.

Mr. Geithner and the Federal Reserve chairman, Ben S. Bernanke, are scheduled to testify to the House Financial Services Committee on Tuesday about the bonus payments.

Given that private equity firms, hedge funds and sovereign wealth funds are perhaps the only institutions with cash to invest in such a program, the administration went on the offensive on Sunday in an effort to win them over.

In phone conversations, the administration gave some of these prospective investors a preview of the program, the people briefed on the conversations said.

Three chiefs of investment firms said in interviews that they were impressed with the terms of the program — which would have the government lend nearly 95 percent of the money for any investment — but remained reluctant to participate because of the potential for future regulation.

“The deal is good, but it’s not worth it if I’m buying myself into a retroactive tax or a Congressional hearing,” the chief executive of a major investment firm said, insisting on anonymity because he did not want to seem at odds with the Treasury Department in the event that his firm ends up participating.

Despite the reluctance of some investors, others voiced optimism about the plan. Laurence D. Fink, chief executive of BlackRock, a money management company, said his firm planned to participate in the program.

“We will be raising money on behalf of our clients,” he said, adding that he was not worried about government intervening in his business. “I don’t see how Congress can interfere in this.”

Pimco, a large bond fund, also was expected to participate.

Still, a big stumbling block remained: how to place a value on mortgage-related assets that have not been traded for months.

Executives briefed on the plan said it did not address the central question of how to bridge the divide between what the banks want to sell the assets for and what investors are willing to pay for them. The government hopes that the subsidies it provides to investors are so rich that they will be willing to risk overpaying somewhat for the assets.

MUCH MORE AT LINK

http://www.nakedcapitalism.com/2009/03/guest-post-is-obama-running.html


Submitted by Rolfe Winkler, CFA, publisher of OptionARMageddon.com

According to the NYT, the administration is considering all kinds of new rules in the wake of the AIG bonus scandal. These include tougher rules for mortgage lenders, new oversight powers for the Fed, and a new exchange/clearinghouse for derivatives trading. Most interesting in terms of intra-governmental politics, however, may be Obama's proposed restrictions for executive pay (emphasis mine):

The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan to overhaul financial regulation, government officials said...

The new rules will cover all financial institutions, including those not now covered by any pay rules because they are not receiving federal bailout money. Officials say the rules could also be applied more broadly to publicly traded companies...


No specific policy proposals have been made yet, so it's tough to offer firm opinions about the above. Nevertheless, I'd like to chime in with early thoughts on the pay proposals. In a nutshell, I think Obama may be trying to wrest control of the pay debate from pissed off Senators and Congressman. This is a shame because Congress, in all its outrage, might actually have stumbled onto sensible policy...

The administration's proposed pay restrictions sound to me like a rearguard action. Friday the House passed a bill that would essentially confiscate bonuses paid to all employees making over $250,000 at companies that have received $5 billion+ of bailout money. You know Timmy Geithner and Sheila Bair don't like the sound of that. Both have made clear that Wall Streeters should get paid whatever amount appropriately incentivizes them to clean up their own mess. How to compromise with angry lawmakers that want stricter restrictions? Perhaps by cutting a wider swath in terms of companies affected while limiting the restrictions at any one company to only its most prominent corpulent felines.

The House proposal, remember, confiscates bonus income (including, potentially, non-cash bonuses!) for everyone making over $250,000. It would only impact a handful of companies in particular, but the total number of affected employees would run well into the thousands.

Contrast that with Obama's nascent plan, which, according to the NYT, affects executive pay. "Executive" tends to be code for the top guys listed in the proxy: CEO, CFO, General Counsel, COO, those types. To placate House members who want more sweeping restrictions, the administration says it would regulate "all financials" and possibly other publicly-traded companies---not just those receiving the biggest bailouts.

The House's version is superior for two reasons: It hits the right companies and is appropriately draconian.

First of all, government has no business making compensation decisions on behalf of the private sector, which is what Obama would do by subjecting so many companies to executive pay restrictions. The House bill doesn't do this. By hitting only those companies that have received over $5 billion of bailout money, it dodges the private sector entirely. How so? The companies that have received the lion's share of bailout money really aren't in the private sector any longer. For one thing, they continue to draw breath thanks to TARP, FDIC and Fed life support; they owe their lives to forgiving taxpayers who've not yet chosen to pull the plug. For another, the risks on their balance sheets have ostensibly been socialized. For all intents and purposes, this makes their staffers public sector employees. As such they should be subject to whatever pay restrictions taxpayers' representatives see fit to establish.

And the pay restrictions are so draconian they might accomplish needed banking reforms simply by driving those most responsible for the bank crisis out of the business. At the very least, it would reduce incentives to take outsized risks with vulnerable, systemically-important balance sheets.

In recent years the biggest profits---and the biggest bonuses---were generated by largely dubious activities. To take two examples, investment bankers and propriety traders have been vastly overpaid relative to the value they've added.

I-bankers intent on maximizing fee income often abuse their companies' balance sheets in order drive deal flow. They leverage their leverage. They aren't paid to care about the quality of their deals, or the risk borne by the boss's balance sheet. And far more often than not, their deals destroy value anyway. As for prop-traders, they are little more than ultra high-stakes gamblers. It's beyond foolish that we allow them to make their bets with the same balance sheets responsible for generating the majority of the economy's credit. Of course some are great traders, but it's a zero sum game. For every Boaz Weinstein (vintage 2007 and before anyway) there's a Ralph Cioffi. The industry's collective balance sheet isn't strong enough to withstand the failures---counteryparty risk anyone?---so the profits earned by the good ones are largely a mirage.

Trading and i-banking need not disappear of course; they just need to be gone from the commercial banking sector, for which the only remaining charge should be the prudent allocation of credit. If bulge bracket banks face the severe pay restrictions outlined in the House bill, they probably would lose much of their rock star "talent." Fantastic. I can think of no better indicator of progress on bank reform than to see the industry return to its stolid past.

In the old days, when Wall Street firms were still partnerships, everyone took a hit when times got tough, including top producers. They all understood it was a survival issue for the firm.

Now that survival is not a question (government: "there won't be any more Lehmans") these employees have the luxury to retain their sense of entitlement. "But we earned these bonuses." Nonsense. But for taxpayers, their firms would have gone horizontal months ago. Is $250k not significantly better than $0?

Yves notes "everyone used to complain about welfare queens. What would you call this level of entitlement? They are every bit as much wards of the state as welfare recipients, and fail to recognize it. No wonder the public is furious."

Perhaps the best indication that the House bill is good policy: bulge bracket bankers are vociferously opposed...

No retirement for you! -- the Seinfeld retirement Nazi.

Well, the capitalist ideal has always been to work the workers until they die. Solvent pension plans would just encourage commoners to think they could get money for no work. I suppose you'll be wanting all day Christmas day off, too. Pensions! Humbug!

http://www.kiplinger.com/magazine/archives/2008/03/lump-sum-payout-vs-distribution.html


And what bill allowed this change? The wonderful Pension "Protection" Act of 2006...
http://www.research401k.com/pension-payout.html


Just another lovely feature of the Pension Protection Act of 2006--chief Dem negotiators were Baucus and Ted Kennedy. They sold out America workers, along with a bunch of Senate and House Dems:

House Vote:http://www.govtrack.us/congress/vote.xpd?vote=h2006-422

Senate vote:http://www.govtrack.us/congress/vote.xpd?vote=s2006-230
Barbara Boxer and Russ Feingold were the only 2 Senate Dems voting against it.

The sponsor in the House was John Boehner:
http://www.govtrack.us/congress/bill.xpd?bill=h109-4

That should tell you something right there.

So if somebody has $200,000 in 401(K), they can only get $175,000 in a lump sum in one year? But they could get the remaining amount the following year? Why won't the gov let you have your money!!!!!

Do you know if this also applies to IRAs?


Boehner is a jerk, he is the Rep in the district next to mine.

Some defined pension plans allow you to take your pension all at once in a lump sum instead of receiving a monthly annuity.

so much to keep up with, I'm getting myself confused

:crazy:

http://www.nakedcapitalism.com/2009/03/fed-rescue-programs-no-exit.html

The Wall Street Journal tonight, in "As It Starts Programs, Fed Weighs How to Stop Them," broaches the touchy subject of how Federal Reserve unwinds all the "support lending" initiatives it has underway and is on the verge of launching.

In general, this piece is more wary of party line than the typical WSJ offering, but it does miss a couple of very big issues, which we will get to in due course.

While the Journal does not tease this out, the Fed's readiness on this issue is a worrisome echo of Timothy Geither: the Fed plans to have a plan:

Fed Chairman Ben Bernanke told community bankers in Phoenix Friday..."We are very much aware that we don't want to be in the credit markets forever," he said. "We need to help them now, but we want to have an exit strategy, and allow those markets to recover and become again fully private sector."


Yves here. Wanting to have an exit strategy and actually having an exit strategy are two different states of affairs. Back to the article:

Part of the Fed's exit should take care of itself by design. More than $1 trillion of the central bank's loans are for three months or less, such as liquidity programs and currency swaps with other central banks. The Fed also established rates for many programs that wouldn't be attractive to markets in normal times, forcing the programs to unwind on their own. When markets pull back from the programs, that would be a signal for the Fed to shrink other elements of its balance sheet, before turning to raising interest rates from their current level near zero.


Yves here. This is all a bit misleading, or more accurately, wishful. The part that is 100% correct is that the currency swap lines are seeing much less usage, although that could reverse if Eastern Europe were to slip into crisis. Some of the facilities, such as the Primary Dealer Credit Facility, have seen a great variation in use of available support over time.

But even looking at the original emergency bank backstop, the Term Auction Facility, whose size per twice-monthly auction has increased from $20 billion to $150 billion, still has bids not that much lower than the levels seen last November, which was considered a crisis month (although the Fed did have more frequent auctions then, two of the four had very low take-up).

The idea that the programs can or will simply roll off is also, shall we say politely, a bit naive. For instance, the FDIC just extended its supposedly temporary Temporary Liquidity Guarantee Program. These programs will continue until banks are ready to wean themselves off them.

And that could be quite some time in coming. The problem is analogous to welfare programs. Any reduction in subsidy is a disincentive. A classic was benefits like food stamps or housing vouchers that were not available to recipients when they crossed a certain income threshold. The net effect was that even if the recipient wanted to get off the dole, there was an income range, often quite considerable, in which he would be much worse off than if he earned less than the ceiling due to the loss of benefits.

The argument, the programs become unattractive "in normal times" which one presumes is when rates are higher, is spurious. The rates and terms will be adjusted if the Fed believes (based on gnashing of teeth and tearing of hair) that banks still need the programs even though circumstances have changed. If we are lucky, the goodies might be skinned down, but don't get your hopes up that subsidies will end in a mere couple of years. And the story, to its credit, points out that welfare queens participants will fight to keep their lucre:

Each of the portfolios will have its own constituencies -- in markets and governments across the country -- that could pressure the Fed not to pull back too quickly, or ever. With each of those programs, the Fed faces the risk of becoming more entangled with political authorities -- undermining its role in setting interest rates.


And now we get to the part the Journal missed. what happens when the Fed loses money when it sells the stuff it owns, or holds it to maturity and suffers a shortfall? It's a given the Fed will take hits.

First, it is lending against crappy credit, and the risk of Fed insolvency from them is real, and raises a host of other thorny issues. As Willem Buiter points out:

The Federal Reserve System is not owned by anyone (conspiracy freaks need not bother writing comments to deny this and to attribute ownership of the Fed to the Queen of England, the Vatican, the Rockefeller family or the Elders of Zion). Most of the operating profits of the Fed go to the US Treasury. The twelve regional Federal Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. Ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, fixed at 6 percent per year (which is a lot better, actually, risk-adjusted, than you would get these days on stock in commercial banks)....

Behind every viable and credible central bank with a price stability mandate stands a fiscal authority - the only economic entity with non-inflationary long-term deep pockets....

The Fed does not have a full indemnity from the US Treasury even for its outright purchases of private securities. It has no guarantee or indemnity for private credit risk assumed as a result of its repo operations and collateralised lending.

For the Fed’s up to one trillion dollar potential exposure to private credit risk through the TALF, for instance, the Treasury only guarantees $100bn. They call it 10 times leverage. I call it the Fed being potentially in the hole for $900 bn . Similar credit risk exposures have been assumed by the Fed in the commercial paper market, in its purchases of Fannie and Freddie mortgages, in the rescue of AIG and in a host of other quasi-fiscal rescue operations mounted by the Fed and by the Fed, the FDIC and the US Treasury jointly.

I consider this use of the Fed as an active (quasi-) fiscal player to be extremely dangerous and highly undesirable from the point of view of the health of the democratic system of government in the US.

There are two reasons for this. First, it undermines the independence of the Fed and turns it into an off-budget and off-balance sheet special purpose vehicle of the US Treasury. Second, it undermines the accountability of the Executive branch of the US Federal government for the use of public resources - tax payers’ money.

As regards the threat to the independence of the Fed (whatever is left of it), first, even if the central bank prices the private securities it purchases appropriately (that is, there is no ex-ante implicit quasi-fiscal subsidy involved), it is possible that, should the private securities default, the central bank will suffer a capital loss so large, that the central bank is incapable of maintaining its solvency on its own without creating central bank money in such quantities that its price stability mandate is at risk. Without a firm guarantee up front that the Federal government will fully re-capitalise the Fed for losses suffered as a result of the Fed’s exposure to private credit risk, the Fed will have to go cap-in-hand to the US Treasury to beg for resources. Even if it gets the resources, there is likely to be a price tag attached - that is, a commitment to pursue the monetary policy desired by the US Treasury, not the monetary policy deemed most appropriate by the Fed.

As regards democratic accountability for the use of public funds, even if the central bank has sufficient capital to weather the capital losses it suffers on its holdings of private securities, the central bank should never put itself into the position of becoming an active quasi-fiscal player, nor a debt collector. The ex-post transfers or subsidies involved in writing down or writing off private assets are (quasi-) fiscal actions that ought to be decided by and accounted for by the fiscal authorities. The central bank can act as a fiscal agent for the government. It should not act as a fiscal principal, outside the normal accountability framework.

The Fed can deny and has denied information to the Congress and to the public that US government departments like the Treasury cannot withold . The Fed has been stonewalling requests for information about the terms and conditions on which it makes its myriad facilities available to banks and other financial institutions. It even at first refused to reveal which counterparties of AIG had benefited from the rescue packages (now around$170 bn with more to come) granted this rogue investment bank masquerading as an insurance company. The toxic waste from Bear Stearns balance sheet has been hidden in some SPV in Delaware.

The opaqueness of the financial operations of the Fed in support of the financial sector (which are expanding in scale and scope at an unprecedented rate) and the lack of accountability for the use of tax payers’ resources that it entails, threaten democratic accountability. Even if it enhances financial stability, which I doubt, democratic legitimacy and accountability are damaged by it, and that is too high a price to pay.


Yves again. Now if the dubious risks being assumed wasn't a big enough source of possible trouble, we also have a second source of trouble: certain losses on the Fed's quantitative easing (an aside, Bernanke keeps dancing around that notion. The FOMC statement clearly said inflation was suboptimal, but the buying firepower is directly primarily at Agency paper. In addition, Bernanke in his speech Friday talked about managing spreads, not fighting deflationary pressures. So are there multiple objectives or is this a pump up asset prices program in another guise?).

Consider: The Fed is buying Agencies and Treasuries to keep yields down, which means keep their prices up (for bonds, prices and yields move in inverse directions). At some point, the assumption is economic growth will take hold, inflation will rise, the yield curve will steepen (remember, this operation is flattening the yield curve, meaning lowering the normal difference between short term rates and long term rates).

Higher inflation means higher interest rates. The Fed will want to allow interest rates to rise, because once the economy starts moving, the cumulative effect of all of its interventions will mean inflation is likely to accelerate fast. So it not only stops buying all that paper, it starts selling its holding, which will contract money supply (when buyers pay the Fed for the purchases, it takes money out of circulation).

So let's see, we have the Fed going from being a big buyer, which means higher prices for bonds. Then inflation starts to rise, which lowers bond prices. Then the Fed starts selling bonds, which means even lower prices.

The whole QE program is buy high, sell low. That is the inherent profile of this operation. So its unwind will also lead losses, hence a need for a capital infusion from the Treasury.

Ah, but someone at the Fed is a step ahead on this one. Back to the Journal:
I

n a recent speech, Federal Reserve Bank of Philadelphia President Charles Plosser proposed eventually handing over the central bank's assets from targeted credit programs to the Treasury Department to separate itself from fiscal policy. The Fed would get liquid government securities, and officials in the Treasury and Congress would be left to make political decisions. That would allow the Fed to maintain independence in monetary policy as it raises rates.


What a clever way to finesse at least a part of the loss problem (the drecky asset one). Just dump the bad portfolio on the Treasury (presumably for the fictive prices at which it was sourced) and let the Treasury realize the losses. A cute way of trying to bury the problem.

But with the Fed in charge of monetary policy, it will have to reverse QE, and I don't see as easy a way to hide those losses and the associated recapitalization from the public. We have some interesting politics in the offing about the role of the Fed. I wonder if this is part of the push to make it stability regulator, rather than going the more obvious (given the Fed's complete lack of appetite for regulation) of creating a separate financial uber regulator. If the Fed has a bigger mandate, it may be harder for Congress to mess with it when it inevitably needs more dough.

(Small moves.)

= Held by the Public + Intragovernmental(FICA)
= 6,746,757,787,199.50 + 4,294,049,240,358.60
UP 429,200,142.60 + UP 691,696,517.40

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.8, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,011,058 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,079.76.
A family of three owes $108,239.29. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 9,621,362,542.56.
The average for the last 30 days would be 6,734,953,779.79.
The average for the last 28 days would be 7,216,021,906.92.
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$/day.
There were 42 reports in 59 days of Obama's part of FY2009 averaging 0.65B$ per report, 0.56B$/day so far.
There were 117 reports in 171 days of FY2009 averaging 8.68B$ per report, 5.94B$/day.

PROJECTION:
There are 1,402 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 21.2T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/20/2009 11,040,807,027,558.10 BHO (UP 413,929,978,645.02 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,016,082,130,645.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/02/2009 +074,163,317,993.12 ------------********** Mon
03/03/2009 +000,498,419,440.82 ------------********
03/04/2009 +000,625,214,862.41 ------------********
03/05/2009 +006,943,273,604.61 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********

167,595,078,584.90 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,376,175,224,299.03 in last 183 days.
That's 1,376B$ in 183 days.
More than any year ever, including last year, and it's 135% of that highest year ever only in 183 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 183 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3795940&mesg_id=3796072

(Small moves.)

= Held by the Public + Intragovernmental(FICA)
= 6,746,641,784,041.68 + 4,295,069,760,263.66
DOWN 116,003,157.82 + UP 1,020,519,905.06

Source: Debt to the penny:
http://www.treasurydirect.gov/NP/BPDLogin?application=np

THINKING IN BILLIONS: Think 3 or 4 dollars per billion in a 306-Million person America.
If every American, man, woman and child puts in $3.27 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.8, ABOUT TEN BUCKS for a 1B$ federal program.
I hope that is clear. However, I'd suggest using $3 per 1B$ to underestimate it.
Use $4 per 1B$ to overestimate the cost when thinking: Is the federal program worth it?
Aid to Dependant Children: 2B$/yr =$8/yr(a movie a year) Family of 3: $24/yr(an hour of bowling)

PERSONALIZED DEBT:
Every 14 seconds we net gain a another American, so at the end of the workday of this report, there should be 306,029,572 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,080.54.
A family of three owes $108,241.61. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 28 days.
The average for the last 21 reports is 9,627,854,896.11.
The average for the last 30 days would be 6,739,498,427.28.
The average for the last 28 days would be 7,220,891,172.09.
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$/day.
There were 43 reports in 62 days of Obama's part of FY2009 averaging 0.59B$ per report, 0.46B$/day so far.
There were 118 reports in 174 days of FY2009 averaging 8.62B$ per report, 5.84B$/day.

PROJECTION:
There are 1,399 days remaining in this Obama 1st term.
By that time the debt could be between 13.0 and 21.1T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
03/23/2009 11,041,711,544,305.34 BHO (UP 414,834,495,392.26 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,016,986,647,392.90 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
03/03/2009 +000,498,419,440.82 ------------********
03/04/2009 +000,625,214,862.41 ------------********
03/05/2009 +006,943,273,604.61 ------------*********
03/06/2009 +000,851,040,035.06 ------------********
03/09/2009 -000,039,321,146.54 ---- Mon
03/10/2009 +000,452,187,222.11 ------------********
03/11/2009 +000,187,775,216.55 ------------********
03/12/2009 +031,351,798,430.48 ------------**********
03/13/2009 -000,013,659,079.13 ----
03/16/2009 +047,789,810,398.18 ------------********** Mon
03/17/2009 +000,031,463,665.67 ------------*******
03/18/2009 +000,237,422,838.19 ------------********
03/19/2009 +004,087,134,960.77 ------------*********
03/20/2009 +000,429,200,142.60 ------------********
03/23/2009 -000,116,003,157.82 --- Mon

93,315,757,433.96 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,377,079,741,046.27 in last 186 days.
That's 1,377B$ in 186 days.
More than any year ever, including last year, and it's 135% of that highest year ever only in 186 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 186 DAYS NOT 365.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3797365&mesg_id=3797438

http://brucekrasting.blogspot.com/2009/03/aig-versus-america.html



Every talk show and newspaper focused on the AIG story this weekend. The discussions all circled around the problem of the $165mm of bonuses. This is a side issue. The real problem is that the disease that has infected America has its roots in the business practices of AIG.

In Congressional testimony this past week AIG's beleaguered CEO Edward Liddy said that it could take up to four more years to unwind the remaining 1.6 Trillion CDS book that AIG is dying under. Good luck Mr. Liddy. This writer believes that you and AIG have less than four months before the lights go out. The American people hate AIG. They do not want to do business with this company any longer. Congress hates AIG too. Fed Chairman Bernanke has said on TV that he 'hates' what AIG has done. This busted company has no friend in Mr. Geithner either. The life line of support they are hanging by is very tenuous.


Lost in the weekend's debate over bonuses was the following story:

American International Group Inc's (AIG.N) United Guaranty Mortgage Indemnity Co sued Countrywide on Thursday in a California federal court, contending that the lender had misrepresented risks tied to more than $1 billion of mortgage loans that United Guaranty insured.

The case was filed a day after Countrywide sued United Guaranty in California state court in Los Angeles. Countrywide said United Guaranty was trying to get out of its obligations to provide insurance coverage.

If the times were not so serious these lawsuits would be laughable. Here's what the suits area about:

-Countrywide Financial was the poster boy for originating sub prime loans. No document, liars loans with loan to values in excess of 100% were their speciality.

-United Guaranty, with the backing of AIG was trying to build market share in the high risk mortgage market. They aggressively priced and wrote insurance risk on the top 20% of the bad mortgages that Countrywide was creating. They were paid well for assuming this risk. They knew that these were very high risk loans.

-With the AIG first loss insurance the mortgages were sold to Fannie Mae and Freddie Mac. In 2008 over 22% of FNM's book of loans have been 'enhanced” by the likes of AIG.

Every aspect of this collapsed in 2008. Countrywide was sold to Bank of America (a purchase that Mr. Lewis now regrets.) The default rates on the enhanced loans exploded. The Agencies suffered losses on the mortgages in excess of the insured amounts. When the Agencies seek reimbursement from BAC for the insured amount owed to them they are told that AIG is reneging on its promise to pay. Thursday's lawsuit and counter lawsuit are the result.

What is the certain outcome of this? The answer is that some combination of this sad list of characters is going to take a hit of at least $200 million in extra losses. Either BoA, AIG, FNM or FRE are going to take the losses. Given that Uncle Sam owns or controls the lot of them it is certain that the taxpayer is going to once again have to pony up.

UGI announced it's operating results a week ago. They reported losses of $2.48 Billion for the full year 2008. 100% of those losses were born by the tax-payers.

Fannie Mae recently reported that its default rate on 'enhanced' loans was five times larger than the default rate on loans with the traditional cash 20% down.

By now everyone understands that this is just bad business. Everyone is losing because of it. Yet this practice is continuing today.

On March 16, 2009 United Guaranty revised its standards for providing the first loss insurance that has caused so much pain. Their new standards are significantly more restrictive. The new terms are condensed* as follows:


Noteworthy is the fact that 95% mortgages are still available in 'Moderately Declining Markets'. That AIG is still providing 90% mortgages in 'Severely Declining Markets' is troubling. The loan caps are equal to the Agency's limits. One can be certain that the loans originated under these programs will end up in either Fannie Mae's or Freddie Mac's inventory in the next few months. The fact that AIG is continuing to expose the taxpayer to high risk mortgage lending and is contributing to the losses at the Agencies is much more significant than the problem with the bonuses.

The availability and terms of Private Mortgage Insurance should be regulated by the state insurance commissioners. No company that has received TARP funds or that is in Government receivership should be allowed to write PMI or invest in loans enhanced with PMI. If Mr. Bernanke and Mr. Geithner are serious about restoring faith in the credit market then they have to preclude AIG, Fannie Mae and Freddie Mac from participating in high risk mortgage lending.


As of today AIG has an unused credit line from the Federal Reserve for an additional $30 Billion. If Mr. Bernanke is called upon to sign another big check he risks a backlash that could taint his tenure If he were to seek the consent of Congress today he would not get it. AIG's days appear to be numbered. If that is to be the case one has to wonder what will happen to that $1.6 Trillion CDS book that has caused all of these problems.

3/23/09
National Century fugitive has $400K confiscated

A secret bank account used by Rebecca Parrett has been seized by federal authorities.

FBI agents Monday grabbed nearly $400,000 from a Scottsdale, Ariz. bank account that was being held for the benefit of the fugitive Parrett by an attorney.

Court records indicate that Seymour Sacks, a Scottsdale-area lawyer, told federal authorities in January that Parrett maintained a small office for her personal use at Sacks’ law firm.

A co-founder and former vice chairwoman of Dublin-based National Century Financial Enterprises Inc., Parrett was convicted with four others in March 2008 of planning and executing a nearly decade-long scheme that defrauded investors out of nearly $2 billion.

The 60-year-old Parrett is considered a fugitive because she failed to appear for a scheduled court hearing after her conviction.

Sacks told authorities he set up an escrow account at the Valley First Community Bank for Parrett after she had given him about $350,000, the seizure warrant says.

Federal investigators believe the money to be proceeds from the fraud, court documents say. When the FBI raided the account Monday it held approximately $395,410.

U.S. District Judge Algenon Marbley signed the warrant that allowed the seizure.

FBI agents were not the first to ask for the money.

The warrant notes that Sacks advised a U.S. Marshal that both Parrett’s husband Gary Greene and son Robert Parrett asked to have the money released after Parrett disappeared, but Sacks refused.

A jury found Parrett guilty on nine counts of fraud, money laundering and conspiracy. She is facing a maximum 75 years in prison and is scheduled to be sentenced in absentia in U.S. District Court in Columbus on March 27.
http://columbus.bizjournals.com/columbus/stories/2009/03/23/daily7.html


link backwards to previous articles...
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=103&topic_id=432784&mesg_id=432889

I hope she's still alive, so that someone has the thrill of taking her down or out.
And the family is complicit--if they knew where the money was, what else do they know?

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

Last trade 83.720 Change +0.246 (+0.32%)

Euro Profit Taking Picks Up Ahead of US Session

http://www.dailyfx.com/story/bio2/Euro_Profit_Taking_Picks_Up_1237893396834.html

The rally in global equity prices over the past several days and into the new week has not been met with the same positive reaction in the FX market, with currency traders seemingly more skeptical than optimistic about the latest Treasury plan to rid US banks of toxic assets. The Euro remains locked in some sideways chop after making highs by 1.3740 last Thursday, and analysts now cite 1.3740 and 1.3490 as the key levels to watch. Global equities have received an added boost on some positive developments out of the financial sector with Deutsche Bank expecting a return to profitability in 2009, and Credit Suisse joining the ranks of Citi and RBS after stating that it too was off to a good start in 2009. ECB governing council member Liikanen was on the wires stressing the potential for additional room for rate cuts, while also not ruling out non-standard measures. This follows dovish comments over the past 24 hours from Trichet, Weber and Orphanides who all admitted that there was potential for rates to be lowered some more. Fed Evans has been talking this morning and says that he expects current policy efforts to help stimulate the global economy, but also concedes that the weaker growth outlook calls for more accommodation from the Fed. Commodity currencies continue to hold up quite well despite the consolidation in the Euro, with Aussie, Kiwi and Cad all benefiting from a renewed interest in the commodity trade. A recent IMF report saying that hard commodity exporters may not be as badly hit by the global recession has also been attributed to the relative strength. The Aud/Nzd cross has been finding some bids in the early week and bolstered on Tuesday after NZ FinMin English said that their current account deficit was one of the worst. On the data front, UK inflation has come in higher than expected catching some off guard, but had been weighed down somewhat after BoE King said that he expected that the sharp decline in inflation would likely resume. Meanwhile, Chancellor Darling has responded to King’s explanation letter of higher interest rates, saying that he welcomes the MPC’s intention to meet the 2.0% inflation target and that the government will continue to support the decisions of the MPC. Ex-BoE member Julius also offered some stabilizing comments after saying that the UK was not on the verge of entering into deflation and that the big drop in the currency did not amount to a crisis. In the Eurozone, PMI was released and came in slightly better than consensus. Looking ahead to the North American session, US house price index (-0.9% expected) and Richmond Fed manufacturing (-51 expected) data are due at 14:00GMT followed by consumer confidence later in the day at 21:00GMT. On the official circuit, all eyes will be on the Bernanke and Geithner testimony at 14:00GMT in front of the House Financial Panel.

...more...

US Dollar Follows Familiar Pattern, Declines as Asian Stocks Rise on US Bank Plan

http://www.dailyfx.com/story/special_report/special_reports/US_Dollar_Follows_Familiar_Pattern__1237870211781.html

The US Dollar returned to a familiar pattern in overnight trading, falling in tandem with rising stock prices as the US bank rescue plan boosted risk appetite. The greenback notably deviated from this dynamic in New York hours when the plan was first revealed. Euro Zone Current Account and UK Consumer Price Index releases headline the calendar in the European session.

Key Overnight Developments

• Japan’s Finance Ministry Asked BOJ to Buy Corp Bonds, Say Meeting Minutes
• US Dollar Lower Overnight as Asian Stocks Rise on Geithner’s Bank Rescue Plan


Critical Levels



The Euro added as much as 0.5% while the British Pound added a full 1% against the US Dollar as the safe-haven currency declined in tandem with stock gains across Asian exchanges. The greenback had deviated from the inverse correlation with risk in US hours, rising along with stocks, but returned to form in the overnight session.

...more...

http://news.yahoo.com/s/ap/20090324/ap_on_go_ca_st_pe/bailout_bernanke_geithner_9



WASHINGTON – The Federal Reserve's chairman and the secretary of the treasury are making a rare joint appearance at a congressional hearing, ostensibly to take a scolding over the handling of bonuses at AIG, the giant insurance company that has become the symbol of reckless risk-taking on Wall Street.

But after venting their spleen yet again at a House hearing Tuesday, lawmakers also were expected to press Fed boss Ben Bernanke and Treasury Secretary Timothy Geithner on the new risks to taxpayers from their latest effort to save tottering banks and the U.S. economy: a plan to take over up to $1 trillion in dodgy mortgage securities with the help of private investors.

At the same time, Bernanke and Geithner are likely to once again call on Congress to enact legislation that would allow the government to safely dismantle a big financial institution, like American International Group Inc., to minimize any damage to the U.S financial system and the broader economy.

Obama last week said his administration soon will propose new financial industry oversight that includes a "resolution authority" with powers similar to those of the Federal Deposit Insurance Corp., which can seize control of banks, take over their bad assets and sell the good ones to competitors.

The proposal would give the treasury secretary the unprecedented power, after consulting with officials at the Fed, to take control of a major financial institution and run it. The treasury chief is an official of the administration, unlike the FDIC, which is an independent regulatory agency.


I DON'T GET IT. WHAT DODGY SCHEME AM I NOT SEEING? IS IT BECAUSE AIG ISN'T A BANK? AND WHAT WOULD PREVENT THE GOVT. DOING THIS TO ANYBODY'S CORPORATION IF THEY FELT LIKE IT? HMMMM....

AIG WAS ACTING LIKE A HEDGE FUND, ACTUALLY. SO JUST OUTLAW HEDGE FUNDS!

Well, I think the Gov would only do this, if the corporation was your rich wealthy cronies. I don't see the Gov doing this for the auto industry nor smaller corporations. Just those financials 'too big to fail'.

:shrug:

and it sure looks awfully criminal to me....

http://news.yahoo.com/s/nm/20090324/bs_nm/us_aig_4


The U.S. Internal Revenue Service is challenging some of the tax deals structured by AIG Financial Products Corp, the unit of the giant insurer that has caused political outrage over $165 million in employee bonuses, the Wall Street Journal said.

Some banks that received government-funded payouts to settle contracts with American International Group (AIG.N) turned to the insurer for help cutting their income taxes in the U.S. and Europe, the paper said, citing court records and people familiar with the business. The company paid $61 million last year in disputed taxes stemming from the deals, but sued the U.S. government last month in federal court in New York, seeking a refund, the paper said, citing filings in the case.

Banks that worked with AIG on tax deals include France's Credit Agricole SA (CAGR.PA), Bank of Ireland (BKIR.I) and Bank of America Corp (BAC.N), the paper said, citing AIG's lawsuit. The banks declined to comment to the paper.

In general, AIG's tax deals permitted U.S. companies and foreign banks to effectively claim credit in their home country for a single tax payment, partly through the use of an offshore AIG subsidiary, the paper said.

In its lawsuit against the government, the insurer said it was told by the IRS that AIG hadn't shown that the transactions "had sufficient economic substance and business purpose" to justify tax benefits, the paper said. The IRS declined to comment to the paper.

An AIG spokesman declined to discuss with the paper the tax-cutting transactions in detail but asserted that the tax benefits were proper and justified, the paper said. AIG wants to "ensure that it is not required to pay more than its fair share of taxes," the paper cited the company spokeswoman as saying.

AIG, the IRS, Credit Agricole SA, Bank of Ireland and Bank of America could not immediately be reached for comment by Reuters.

http://online.wsj.com/article/SB123785266231219605.html

Geithner Plan Will Rob US Taxpayers: Stiglitz

he U.S. government plan to rid banks of toxic assets will rob American taxpayers by exposing them to too much risk and is unlikely to work as long as the economy remains weak, Nobel Prize-winning economist Joseph Stiglitz said on Tuesday.

"The Geithner plan is very badly flawed," Stiglitz told Reuters in an interview during a Credit Suisse Asian Investment Conference in Hong Kong.

U.S. Treasury Secretary Timothy Geithner's plan to wipe up to US$1 trillion in bad debt off banks' balance sheets, unveiled on Monday, offered "perverse incentives", Stiglitz said.

The U.S. government is basically using the taxpayer to guarantee against downside risk on the value of these assets, while giving the upside, or potential profits, to private investors, he said.

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

Even if the plan clears banks of massive toxic debt, worries about the economic outlook mean banks could still be unwilling to make fresh loans, while the prospect of a higher tax burden to pay for various government stimulus plans could further undermine U.S. consumers, he said.

(more)

http://www.cnbc.com//id/29848741

.

I need a shower. I just wandered into a few threads on the front page. Krugman, Stiglitz, Dean Baker.....they're all Obama haters!

Yep, take a shower, fire up the hawg and go for a ride.

Just slowboiled through The Watcher's post from upthread and have the biggest case of :wtf: and :scared: fit EVER.




Is nothing untouchable anymore? Wall Street smashes from one end and the government smashes from the other.

....and what if all this bold and sweeping action doesn't work? What's 8.5% of 0?

And still we (M$M and its fans) skim over the AIG bonus BS. It's BS because the bonus noise IS a distraction instead of the starting point it could have been. Now no one is curious enough to see what lies beneath the crust.

The bright shiny things always manage to provide cover for even more outrageous wtf-ness.

"AIG is a globally interconnected colossus, with 74 million customers worldwide and operations in more than 130 countries. The government decided it was simply too big to let fail. Its failure could have resulted in a 1930s-style global financial and economic meltdown, with catastrophic implications for production, income and jobs," Bernanke told the panel."

Imagine a few months ago if Bernanke had said "1930s-style global financial and economic meltdown", Americans would have run on every bank in every state. Instead, the propaganda "trickled" out, carefully worded and purposely misdirected and not truthfully released until a 1000 point rally in the DOW. It's how Americans are manipulated, treated like little children which most people are sadly on the same intellectual level as.

Even worse, I'm not a genius, I just have some common sense which is all it takes to see through the lies our country has become so accustomed to.

I think that's what most of us are going on these days.

And we were the ones who saw this all coming months, even years ago.

Welcome to whatever fresh hell this is today.





Tansy Gold

It's a quote from the recent rollingstone article by Taibbi. That's all it takes, 1 sentence to perfectly describe it all.

For the first time, the health insurance industry is offering to curb its controversial practice of charging higher premiums to sick people.

The offer, in a letter the industry to key senators today, is a potentially significant shift in the debate over reforming the nation’s health care system to curb costs and cover an estimated 48 million uninsured people.

In the letter, America’s Health Insurance Plans and the Blue Cross and Blue Shield Association say they are willing to “phase out the practice of varying premiums based on health status in the individual market” if all Americans are required to get coverage.

Insurers are trying to head off creation of a government insurance plan that would compete with them.

http://www.chron.com/disp/story.mpl/business/6337494.html



Bet they are shitting their pants now-afraid of losing their cash cow. watch the deals get sweeter as health care debate hits the front page.

They are going out of business, just like GM, and for the same reasons.

works great as long as the insurance companies get premiums. But as more and more people become jobless, they won't be able to afford premiums for a personal healthcare policy. And then the people who are currently paying the premiums, won't be able to afford the increases to cover the uninsured who go to the emergency room.

I suppose all insurance is a bubble? Life insurance, longterm care insurance, car insurance, home insurance.

:scared:

We in the United States spend $340 Billion annually on healthcare. In equity, we receive $170 Billion as products and services. Think about it. I assigned the class to do a cost-benefit analysis, comparing the United States with another industrialized Western nation like Canada. The facial expressions after doing the math were beyond description.

I can't figure out why we don't have more folks screaming for universal health. HOW...How can that possibly worse than what we have now. The profit that they injected in their efforts at cost control is far more damaging than the bit that Docs and hospitals might once have charged. This is what happens when you take what should be a non profit and subject it to the for profit business model. This is why I am so opposed to the voucher system in public education....it does the same thing.

SAVANNAH, Ga. — A judge has ruled Sen. Saxby Chambliss doesn't have to answer questions from a lawyer suing Imperial Sugar on behalf of victims of the explosion at the company's Georgia refinery last year.

Savannah attorney Mark Tate, who represents families of six employees killed in the blast and five injured workers, subpoenaed Chambliss in hopes of asking him if the company sought his help to discredit a whistleblower and discourage workers from suing.

State Court Judge Hermann Coolidge quashed the subpoena Monday, but his one-paragraph ruling did not explain why. Senate lawyers had argued the Constitution gives Chambliss immunity from answering questions about his official duties.

"It's sort of disappointing, but not surprising," Tate said Tuesday. "Now other courts are going to pick up this Chatham County State Court order and say, `Hey, if you get elected (to Congress), you're immune.'"

more....

http://www.chron.com/disp/story.mpl/ap/business/6337225.html

It stems form this little episode...."At a Senate hearing on the explosion in July, Chambliss sharply criticized a company whistleblower, Vice President of Operations Graham H. Graham, who testified Imperial Sugar ignored repeated warnings about explosive dust at the Georgia plant.

Tate says Chambliss was trying to undermine Graham's credibility as a witness in the lawsuits against Imperial Sugar, based in Sugar Land, Texas. Chambliss denies his criticism of Graham was intended to defend the company."

Chambliss was acting like Imperials lawyer instead of the Senator representing these folks-They have every right to ask which master he serves.

Stocks gave back some gains Tuesday as investors looked for fresh signals about Wall Street's direction a day after the market's biggest advance in five months. A pullback was expected after the Dow Jones industrial average surged 498 points on Monday in a giddy response to the government's plan to help banks dispose of bad loans. Traders said the market was short on fresh fuel to extend the rally that has propelled stocks up about 20 percent in 10 days.

DJIA 7,660.21 -115.65 -1.49%
Nasdaq 1,517.16 -38.61 -2.48%
S&P 500 806.22 -16.70 -2.03%

To paraphrase, or parody Dr. MLK.

Thank God it passed! Thank God it passed! Praise God Almighty, thank God it passed!

The greater fool theory is hard at work here.

Folks in GD and GD-P are proclaiming a bottom has been reached, and all is hunky-dory.

Just remember from an earlier post,
Approximately 125,000 people lost their jobs yesterday.
Another approximately 125,000 people lost their jobs today.
And another approximately 125,000 people will lose their jobs tomorrow.
Based on roughly 600,000 new claims the last few weeks.

The Dow is the price of 30 fucking companies.

I owe the IRS about $220 this year. Should I make the check out to The IRS, AIG, or Goldman-Sachs? I'm really tempted not to send it in at all. But, my wife would really kick my ass if the feds took the house.

the kids at the coffee shop. they were hanging over someone's laptop, rubbing their hands with glee. the market had gone up. they had recouped some of their losses. it would go up again today and more tomorrow. by the end of the month, they were sure, it would be back at 10,000.

then they talked about the son-in-law who has been out of work for six months and can't find anything better than a manager-trainee at Burger King. never mind his 13 years' experience in restaurant management with some of the top eateries in southern California.

and the ailing father, just short of his 90th birthday, who has lost every penny of a substantial estate due to medical bills not covered by medicare.

and the grandson who had to quit college because his scholarships only covered 75% of the cost and budget cutbacks just axed his campus job.

and the daughter in the midst of a nasty divorce who can't sell the jointly owned home even though the asking price is now 75% of the mortgage.

and the brother and sister-in-law who retired very comfortably two years ago after a combined 87 years with the same company back in the rust belt and got notices last week that their pensions have been cut by 40% effective 6/1/09. . . . and their 401Ks have lost over 50%.

the litany went on and on and on and on, and they never connected anything to anything else. it's all random. there is no cause and effect. no one's to blame. the government can't fix it. we have to take care of ourselves.

but the stock market went up again yesterday so everything is fine and dandy

with friends like these, who needs





Tansy Gold

and creative use of the language.

. . . .All my friends live there."?

I have an eclectic mix of coffee pals, mostly retired or semi-retired, most financially comfortable. Some are more retired than others, some are more comfortable than others. None of them let on that they are financially strapped, though some may be.

Some are blissfully ignorant, secure with SS and pensions and stock portfolios acquired through savings or inheritance. Some have worked for their acquisitions and are careful.

Some "get it," most do not.

Some are arrogant assholes, most are something less than that.

They think I'm kidding when I say I'm a socialist, and when I'm not around they tell each other (and sometimes even tell the BF) that that Tansy is one smart cookie; don't get into an intellectual argument with her or she'll wipe the floor with you. :evilgrin: But I rarely get suck(er)ed into those battles.

Here, however, no one interrupts my rants. I have time to correct my spelling and my grammar. I learn new things every day, have my thinking processes honed, and maybe even reach out into that unimaginable world of Lurkdom, where hovering eyes and minds gulp my words like cool water on a hot desert afternoon or sip them like fine old sherry. . . . or spit them out like storm-soured milk.

And here, too, I find those like-minded denizens, faceless and formless but with brains sharpened by our communal adversity, our shared hunger for justice and honesty in a world corrupt beyond hope. And I feed off the wisdom, the knowledge, the living that goes on here, a much more vital existence than what I see with my "real-world" companions.

If Obama wants us to scream above the dollar-enhanced shouts of the banks and banksters, the fleecer and scammers and flimflammers, then we must scream. To do less is to become one of them. That I will not do.

Thank you, Demeter. Stay warm, stay safe.



Tansy Gold

I don't write much, but I like what you write, and you write for me.

Appreciate that we here have found the SMW to share our daily thoughts.

:applause:

That is one basic fact that I have learned in the past few years - certainly in the years during which I have been hanging out on the SMW. If one does not understand that basic fact - then one has no business getting involved, even emotionally, in this bidness. We no longer fling feces at each other. As far as I can tell - it's just other people's money that gets flung nowadays.

What? No naked posting? What kind of internet is this?

Why did you do it, we ask - Seriesly, because we can (and get away with it) was the best answer they could come up with.

Lunging for a robe at Goodwill, America.

Flinging feces? Yes, they do. (The inmates, not the deputies.) We are primates with egomania.

Sounds like fun! Do I get some feces to fling?

:smirk:

:smirk: