Source: du

STOCK MARKET WATCH, Tuesday May 5, 2009

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

AT THE CLOSING BELL ON May 4, 2009

Dow... 8,426.74 +214.33 (+2.54%)
Nasdaq... 1,763.56 +44.36 (+2.58%)
S&P 500... 907.24 +29.72 (+3.39%)
Gold future... 902.20 +14.00 (+1.55%)
30-Year Bond 4.07% -0.02 (-0.56%)
10-Yr Bond... 3.16% -0.02 (-0.54%)

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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

Massive Blows to the Foundations of Our Faith Based Capital Markets

BY ROB KIRBY

Most widely accepted and reported accounts of our current global financial difficulties place its beginnings in the August 2007 timeframe, when sub-prime (mortgage) credit markets “seized up”.

The precarious state of our financial system was echoed some time before August 2007, when none other than Dallas Fed President, Richard Fisher, espoused (in a rare moment of clarity and candor) back on April 16, 2007,

“I have spoken in previous speeches of our “faith-based currency,” a term I use only slightly tongue in cheek. The dollar—like the euro, the yen, the British pound and other currencies—is what economists call a fiat currency. It is backed only by the federal government’s power to raise the revenues needed to meet its obligations and by the rectitude of the U.S. central bank. If the market were to lose faith in either assumption, the dollar would be debased.”

Fisher’s (then) words elicit connotations of “a sales job” – to make believers out of skeptics. After all, instilling faith in skeptics “IS” fundamentally what any religion is all about anyway, ehhh?

You see folks, the real reason behind the lies of the bankers and their owned, puppet politicians through ACCOUNTING CHICANERY is, yet-again, to “keep the faith” in a dying, irredeemable fiat currency regime that has long past its due date.

This same mob would like us all to believe that they are doing their level-best to “unfreeze credit markets” and get the banks lending again.

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

---

Mr. Kirby then reasons why one should buy gold, as usual.

but we have no faith in the rule of law any longer, and Obama hasn't done anything to address that fundamental problem, except appoint tax evaders to Treasury. I'm sorry, people who couldn't figure out the tax code, to the dept. that runs it. Or maybe, I should rephrase it yet again....

10:00 ISM Services Apr
Briefing.com 43.0
Consensus 42.0
Prior 40.8

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

SINGAPORE – Oil prices lingered above $54 a barrel Tuesday in Asia as growing investor optimism about the global economy left crude poised to break out of a month-long trading range.

....

Traders will be watching the weekly petroleum inventory data for the week ended May 1 from the Energy Information Agency on Wednesday. Analysts expect a build of 2.2 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Crude stocks rose 4.1 million barrels last week and are near 19-year highs.

....

In other Nymex trading, gasoline for June delivery fell 0.80 cent to $1.58 a gallon and heating oil slid 1.65 cents to $1.42 a gallon. Natural gas for June delivery dropped 6.5 cents to $3.66 per 1,000 cubic feet.

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

WASHINGTON—After nearly four months of frank, honest, and open dialogue about the failing economy, a weary U.S. populace announced this week that it is once again ready to be lied to about the current state of the financial system.

....

The national call for decreased candor began last month, after the Department of Labor released another soul-crushing report that most Americans agreed "wasn't helping anything" and "didn't need to be so specific, at least."

The report estimated that 663,000 private and public sector jobs were lost in the month of March—a revealing statistic many people found shockingly blunt. Responding to the new information, an overwhelming majority of citizens said they believe that, during these extremely uncertain times, our leaders have a responsibility to come together, sit the American people down, and lie through their teeth about everything from misappropriations of taxpayer dollars to the severity of the credit crisis.

....

Thus far, many policymakers in Washington have responded favorably to their constituents' requests, saying they respect and understand the public's need for dishonesty.

Onion, of course

Is is on the 6th that we get the grim numbers from April?

For those who don't want to wait, I will predict what the report will say: Yet another month with over 600,000 jobs lost. Losing 600,000 jobs would be a bad year, let alone a bad month. HOWEVER, the spin will be that the horrible job losses are less horrible than in, say, January, for which the numbers were revised upward significantly a couple of months later.

Imagine the euphoria in Washington if the job losses for April came out at ONLY half a million.

I think the monthly numbers come out during the last week of the month, but that's Memorial Day week, so I'm not sure.

from the Bureau of Labor Statistics. Ah, there it is: "The Employment Situation for April 2009 is scheduled to be released on Friday, May 8, at 8:30 A.M. (EDT)." http://www.bls.gov/news.release/empsit.nr0.htm at the bottom of the text.

It could have been the honest truth leaking out by accident...

WASHINGTON (Reuters) - About 10 of the 19 largest U.S. banks being stress tested will be instructed by regulators to raise more capital, according to a source familiar with official talks.

The banks have been negotiating with their regulators about the depth of their capital needs, should the recession prove to be deeper and longer than anticipated. Markets have been anxiously anticipating the results, which will differentiate the strongest banks from those still expected to sustain considerable credit losses.

The exact roster of banks needing to build their capital positions is still unclear. Banks are expected to be briefed on the official results on Tuesday. The Federal Reserve and Treasury Department will also tell them how policymakers plan to publicly unveil the market-sensitive results, the source said, speaking anonymously because the discussions are private.

http://www.reuters.com/article/ousiv/idUSTRE5434WK20090505

---

Yves Smith comments that it is somewhat strange that bank stocks rallied yesterday on 'upbeat' economic news.

History repeats itself, the first time as tragedy, the second time as farce. But when it's your farce, sometimes it's hard to appreciate the humor.

We've railed about the stress tests since they were announced, but the chicanery, starting with the March 10 Citi and Bank of America pronouncements that they had had a decent couple of months, have lead to a big rally in bank shares. Of course, before we get too excited, it's important to remember that Citi is still trading at a bit over $3 and Bank of America at just over $10.

Nevertheless, the insistence of the cheerleading is looking strained, particularly when pretty much every professional investor we know is skeptical of the rally, even those who had the foresight to buy into it early. And even an equity broker (generally of the bullish persuasion) commented on earnings season: "One third had earnings that beat expectations, one third were short, and one third were delusional."

....

Back to the matter at hand. Matthew Richardson and Nouriel Roubini, in "We Can't Subsidize the Banks Forever," provides a welcome bit of reality to the unwarranted optimism about banks. Having companies look viable as the result of massive, and seeming open ended subsidies does not say much about how they'd be faring ex life support. And even worse are the distortions. We've seen that large scale banking with score based credit paradigms has fared badly. Yet these companies are being subsidized to the detriment of smaller regional and local players who are closer to their communities and can incorporate local knowledge into their credit decisions. But no, just as old style computer jockeys had trouble accepting that big iron might be inferior to PC and distributed processing, so to the powers that be seem unduly fond of very large banks when the superiority of that model is in question.

From the Wall Street Journal:


Yves here. With all due respect, the program is voluntary, and the whole point is NOT price discovery but to permit banks to unload crap assets at at least the inflated carrying price on their books. It does NOT serve the intended goal, a hidden subsidy, otherwise. The banks don't need more liquidity, they need to fill the hole that would otherwise be caused if these assets were valued fairly. These assets trades actively. The issue is not price discovery, but that the banks don't like the prices on offer.

more here

President Obama yesterday announced a major offensive against businesses and wealthy individuals who avoid U.S. taxes by parking cash overseas, a battle he said would be fought with new tax laws, new reporting requirements and an army of 800 new IRS agents.

During an event at the White House, Obama said his proposal would raise $210 billion over the next decade and make good on his campaign pledge to eliminate tax advantages for companies that ship jobs abroad.

"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," Obama said, flanked by Treasury Secretary Timothy F. Geithner and Internal Revenue Service Commissioner Douglas Shulman.

The nation's largest business groups immediately assailed the proposal, arguing that it would subject them to far higher taxes than their foreign competitors must pay and ultimately endanger U.S. jobs. Key Democrats were cool to the plan, and said Obama's ideas should be considered as part of a broader effort to streamline the nation's complex corporate tax code.

http://www.washingtonpost.com/wp-dyn/content/story/2009/05/05/ST2009050500634.html

---

Republicans will, of course, be against it. As for the 'key' Democrats, I see their point. One would not want to endanger those fat campaign contributions would we?

If their operations are overseas and their employees are non-american and they plow their profits back into the overseas operations, what's "american" about them, and why should they receive any tax favors?

Is it only because their execs, their stockholders, and their customers are "American" that they get this tax break?

What about the "foreign" companies who operate with American workers on American soil?

Here's an idea: If you want to shift your operations to Bangladesh or Honduras or Turkey in order to make more profit, fine, go ahead and do so. But do not use the excuse of double taxation -- if you have to also pay taxes to those nations -- for getting out of your obligations to the US. That's the cost of doing business, man, like paying the electric bill or the private security guards.

One thing Ayn Rand got right: when the able-bodied and able-minded are guilted into giving more and more and more of their energies to the able but unwilling, they will either be destroyed by those self-same vampires, or they will suddenly rebel and shake off the chains of guilt, leaving the leeches stunned, perhaps never to recover.

Our economy is being sucked dry by the vampires who call themselves "American" companies and plead for a thousand loopholes to the tax laws. Whether they are corporations or individuals, they whine as if they were destitute but in fact they are the richest of the rich. If they cannot survive without government (taxpayer) hand-outs, then they should not survive.


Tansy Gold

Some of these global enterprises are bigger than whole countries. Some of them think they are bigger than America. Since we are bailing out some that are "too big to fail," maybe they are right.

If they do business in America, if they make any money in America, we should get a piece of the action. It shouldn't matter where they send the money for storage.



Oh, and on the brighter side: The IRS is hiring! (At least somebody is creating jobs.)

The Federal Trade Commission is looking into the ties between the boards of Apple and Google, according to reports.

The New York Times said the inquiry involving Google and Apple centres on a possible breach of anti-trust laws.

Google boss Eric Schmidt and former Genentech boss Arthur Levinson sit on the boards of both companies.

The Clayton Anti-trust Act of 1941 forbids a person to be on a board of two rival firms at once if it reduces competition between them.

http://news.bbc.co.uk/2/hi/technology/8033073.stm

back in the Reagan administration. They weren't repealed or anything. We just gave up. Big companies are too good at dodging justice. The last anti-trust case I remember the government winning was when AT&T broke up (1983). And if you haven't noticed, it has almost completely reconstituted. SBC, Pacific Telesis, Ameritech, AT&T, and Bell South are back together again (as AT&T). NYNEX and Bell Atlantic joined with non-former AT&T company GTE to form Verizon. US West was acquired by Qwest.

So what was the point of the AT&T divestiture? All that effort for one divestiture, since undone. Meanwhile, merger after merger, acquisition after acquisition allowed, with only ritual examination by government regulators who have yet to learn the word "No."

For about the last 15 years or so, they've been re-unifying. That brought us fewer refineries and higher prices.

I think you'll find when they help an existing monopoly shut out competition, they are strictly enforced.

Just can't have willy-nilly innovation... Could hurt the bottom line. ;)

Homeownership and Wealth Accumulation/Destruction (May 5, 2009)
Charles Hugh Smith

Once upon a time people spent decades paying off their home mortgages. That reduction in debt to zero left them equity. Those who paid rent for 30 years may have had lower costs of living (no maintenance costs or property taxes) but unless they saved religiously then they did not end up with the equivalent wealth of a typical homeowner who paid off the mortgage.

Throughout the 1950s and 60s, homes prices and mortgage rates were remarkably stable. The idea that one's house could double in value in a few years was as nonsensical as the price falling in half. Houses cost about two or three times' average income, and over time they drifted higher (adjusted for the era's low inflation) at about 1% a year.

As a result, speculation was nonexistent. Some enterprising handyperson might buy a rundown house for say $22,000, invest some money and sweat equity, and then be delighted to sell it for $25,000 some time later.

The key to housing being the foundation of middle class wealth was not the rise in value--it was the reduction of debt to zero. Removing equity from one's home was unheard of--there were no HELOCs (home equity lines of credit) and second mortgages were modest; people took a second mortgage out to pay for major home improvements or a new roof, not for vacations, new cars, college, etc.

Needless to say, the entire concept of "homes as the foundation of middle class wealth" has been radically modifed--and perhaps refuted. What was once rare--aging homeowners nearing retirement still holding large mortgages and modest equity--is now commonplace.

more, and some interesting charts and graphs...
http://www.oftwominds.com/blogmay09/housing-wealth05-09.html

(A big drop in the debt after previous report's rise which netted about a 45B$ rise from its previous report, now, with this report, the last three reports adding about 17B$ net. Three reports YO-Yoing the debt.)

= Held by the Public + Intragovernmental(FICA)
= 6,927,622,336,982.99 + 4,280,453,855,317.56
DOWN 3,202,605,992.57 + DOWN 27,313,343,665.52

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 306,270,258 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,595.38.
A family of three owes $109,786.14. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 days.
The average for the last 22 reports is 4,428,265,231.42.
The average for the last 30 days would be 3,247,394,503.04.

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$/day.
There were 71 reports in 101 days of Obama's part of FY2009 averaging 0.08B$ per report, 0.18B$/day so far.
There were 146 reports in 213 days of FY2009 averaging 8.11B$ per report, 5.56B$/day.

PROJECTION:
There are 1,360 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.8T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/01/2009 11,208,076,192,300.55 BHO (UP 581,199,143,387.47 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: 1,183,351,295,388.10 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/10/2009 +000,051,156,797.54 ------------*******
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******
04/23/2009 -012,857,484,009.95 -
04/24/2009 -000,133,239,400.23 ---
04/27/2009 +000,285,896,492.06 ------------******** Mon
04/28/2009 +000,154,949,620.57 ------------********
04/29/2009 -034,727,762,120.64 -
04/30/2009 +079,347,503,951.43 ------------**********
05/01/2009 -003,202,605,992.57 --

34,786,535,833.78 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,543,444,389,041.48 in last 225 days.
That's 1,543B$ in 225 days.
More than any year ever, including last year, and it's 152% of that highest year ever only in 225 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 225 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=3860332&mesg_id=3860382

(A tiny rise in debt, the rest, most of the total was FICA stuff.)

= Held by the Public + Intragovernmental(FICA)
= 6,927,691,087,258.88 + 4,292,278,895,754.81
UP 68,750,275.89 + UP 11,825,040,437.25

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 $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.79, ABOUT TEN BUCKS for a 1B$ 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 306,288,772 people in America.
http://www.census.gov/population/www/popclockus.html
Currently, each of these American's owe $36,632..
A family of three owes $109,896.. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 3,495,388,129.35.
The average for the last 30 days would be 2,446,771,690.54.
The average for the last 31 days would be 2,367,843,571.49.
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$/day.
There were 72 reports in 104 days of Obama's part of FY2009 averaging 0.10B$ per report, 0.15B$/day so far.
There were 147 reports in 216 days of FY2009 averaging 8.13B$ per report, 5.53B$/day.

PROJECTION:
There are 1,357 days remaining in this Obama 1st term.
By that time the debt could be between 13.1 and 18.7T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
05/04/2009 11,219,969,983,013.69 BHO (UP 593,092,934,100.61 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: 1,195,245,086,101.20 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
04/13/2009 +000,309,440,014.97 ------------******** Mon
04/14/2009 +000,167,862,523.71 ------------********
04/15/2009 +044,205,591,028.33 ------------**********
04/17/2009 -038,696,374,097.81 -
04/20/2009 +000,193,620,436.16 ------------******** Mon
04/21/2009 -000,363,758,089.93 ---
04/22/2009 +000,051,738,680.14 ------------*******
04/23/2009 -012,857,484,009.95 -
04/24/2009 -000,133,239,400.23 ---
04/27/2009 +000,285,896,492.06 ------------******** Mon
04/28/2009 +000,154,949,620.57 ------------********
04/29/2009 -034,727,762,120.64 -
04/30/2009 +079,347,503,951.43 ------------**********
05/01/2009 -003,202,605,992.57 --
05/04/2009 +000,068,750,275.89 ------------******* Mon

34,804,129,312.13 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,555,338,179,754.62 in last 228 days.
That's 1,555B$ in 228 days.
More than any year ever, including last year, and it's 153% of that highest year ever only in 228 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 228 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=3861680&mesg_id=3861745

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

Last trade 83.787 Change +0.097 (+0.12%)

Dollar/Cad Buy Recommendation ReIssued @1.1605 (Exited for 60 Point Loss Monday)

http://www.dailyfx.com/story/market_alerts/technical_alert/Dollar_Cad_Buy_Recommendation_ReIssued__1_1605_1241514528283.html

We were finally able to get involved on Monday with our desired entry price being hit, but unfortunately the result was not what we were looking for after being forced to exit the trade for a 60 point loss on the New York close. However, this does not change the fact that we still believe a major upside reversal is in the cards and the question now is only an issue of timing. The optimal entry point for a long trade is very near with the daily RSI on the verge of rolling into oversold territory (just over 30 at present). As such we will look to once again buy on a dip today, with our revised entry point sure to coincide with a daily RSI well below 30 and an hourly chart that is also oversold, making the risk for a reversal extremely high at that point. If our entry is triggered today, we will not exit the trade on the New York close and will hold onto the position until stop, profit or further instruction. In reference to the broader structure, the pair has pulled back quite sharply over the past several days with the market breaking to fresh multi-day lows below the 200-Day SMA to the lower 1.1700’s thus far. While the current pullback changes the picture somewhat, the broader structure still remains constructive with the market locked in a longer-term bullish consolidation dating back to October of 2008. As such, any dips towards the bottom of the range should be used as opportunities to establish long positions in anticipation of a move back into the mid-range at a minimum

...more...

Euro Looking Past 22 Year Low In Factory Gate Prices, Pound Receives Boost From Strong Construction Activity

http://www.dailyfx.com/story/bio1/Euro_Looking_Past_22_Year_1241518134425.html

The Euro traded heavy during the overnight session after reaching as high as 1.3441 as traders started to hedge their bets ahead of the producer price report. The inflation gauge showed that factory gate prices fell by 3.1% on a yearly basis which was the biggest drop in 22 years. A 7.3% drop in energy costs led the way but the 1.7% decline in the other components demonstrates that prices are being cuts across the board. However, the dismal inflation report failed to extend the single currency losses as it has started to regain its footing since the release trading higher from its intraday low of 1.3321.

Indeed, European companies have been forces to slash prices as they try and lure in consumers that remain reluctant to open their wallets as the region’s recession continues to deepen. Although, the ECB has maintained that it isn’t concerned about deflation as they expect price pressures to return by the end of the year, they may take a closer look at initiating non-standard measures at Thursday policy meeting. ECB Vice President Lucas Papademos told reporters Monday that the European Central Bank's money market interventions have helped to maintain a reasonable flow of credit which could be a sign that they may look to extend those initiatives.

The pound reached as high as 1.5115 as it was boosted by April’s PMI construction reading rising to 38.1 which was the highest since September, 2008. The reading shattered prediction s of 31.9 which could be assign that loosening credit markets are beginning to fuel demand for new construction as businesses and consumers are beginning to gain access needed funds. Sterling continues to benefit from the broader increasing optimism and with China and the U.S. showing green shoots, if the U.K. data continues to follow suit then we could see the currency continue to receive support. The pound /dollar has broken above the 4/16 high of 1.5070 which leaves the 1/8 high of 1.5375 as the next target for the pair.

The dollar remains under pressure as growing optimism continues to fuel demand for riskier assets which led to the S&P 500 erasing all of its losses for the year during trading yesterday. However, we could see a retracement today if traders look to book profits which could create greenback support. Yet, the ISM non-manufacturing report is expected to show an improvement to 42.0 from 40.8 as an increase in consumer confidence could have sparked greater demand. An improvement in the service sector gauge would build upon the positive manufacturing reading and boost the outlook for future growth. Traders will focus on the employment component which was at its lowest level since last October at 32.3. An improvement in hiring could lower expectations for the amount of job losses in the economy for April which will be revealed in Friday’s Non-farm payroll report.

...more...

I'm still alive. Made the move to Orlando!! (sorta). Fill y'all in later.

:hi:

glad to see you!

:hi:

Welcome to the neighborhood. And watch out for the gators. It's mating season, and they're showing up everywhere.

I spent the week-end in Orlando, and all I got to show for it was a hangover and a sunburn.

:hi:

you could have a tatoo, a hangover, and one week later a veneral disease. Congrats Roland and watch out for Dr Phool.

Have you seen the lady gators? Whoof.

Is this why people don't seem to respond to anything any more? They really have been taking the soma?

Use Of Drugs To Treat Mental Illness Rockets In The U.S.

Tell somebody the building is on fire, and they just kind of shrug their shoulders, and give you a blank look.

As long as there are big pharma companies pushing drugs and health insurance companies covering the price of those dugs and doctors prescribing those drugs, then there are going to be gazillions of people taking those drugs.

When those gazillions of people lose their jobs, have no income nor savings, lose their health insurance, lose their homes/apartments, and are hungry, they will no longer be taking those drugs. They probably won't even be able to go to the doctor nor have any kind of routine dental care nor any kind of surgery.

Eventually, the health insurance and big pharma companies will be scaled back, just like what is happening now with the auto industry.

the Insurance Companies reimbursement stay the same.....staff cuts to follow. First it is ancillary folks like housekeeping, then RT, PT, and that extra work is shoved on the Nurse (but you get no extra Nursing staff or a raise. Then Nurses get cut and the CEO's corner office get redone and he gets a bonus for saving the hospital lots of money. This is what happened in most of the 90's. It will be deja vu all over again until 1) we have a single payer system 2) more folks have jobs that include health care 3)hell freezes over. Which will happen first?

Whether it is because their bodies or their lives are out of whack, there are a lot of crazy people out there, driving cars, buying guns, doing stupid and dangerous things.

Those with organic illness do benefit from proper medical intervention, for example, the Kid.

Those with lifestyle or socioeconomic situational illness will benefit far more from improvements to their environment and economics than from numbing the pain with any legal or illegal drug. They have to get straight, do the right thing, and become engaged and productive again. They need to find joy in life. This is what people voted for, this is what Obama isn't delivering. This is what Congress seems constitutionally incapable of understanding or supporting.

I do not mind if people who need drugs get them. I do mind trash talk about it.

There's so much talk about so many "unnecessary" drugs, and it probably is true that a lot of Americans are overmedicated for illnesses they don't have. But the irony is that there are a lot of Americans who are undermedicated for the very real illnesses they do have.

There are many who claim the dramatic and visible rise in homelessness in this country began when Raygun cut off funding for mental health. As the ambulatory insane (to coin a phrase, NOT to cast aspersions) were turned out onto the street or taken in by ill-prepared, ill-trained, and un-reimbursed family members, stresses grew. How many of the homeless would have benefitted from both mental and physical health care denied them by the great asswipe?

Don't get me started. I'm in a foul mood, made fouler by lack of affordable health care and a screaming case of sciatica, brought on by the only reasonable job I've been able to find in several years of searching -- and which job I've held now for almost a year.



Tansy Gold, pattin' herself on the back when it doesn't hurt too much

was not talking trash - my shit-o-meter just explodes every once in a while - for instance, that "consumer confidence" reading? my answer - those folks are on really good drugs.

The Nancy Reagan group, the anti-this and anti-that anti-science broad brush bunch who look down on anyone deemed "less perfect".

and I am concerned when the economy collapses that they will no longer be able to afford the medicines. I really don't want to think what is going to happen to all these people.

:scared:

I looked high and low yesterday and I couldn't find much about it...

Is it homes that are for sale? Is it homes that are in the process of sale? Is it homes which have had an offer, but,
a loan hasn't been approved for?

Seems like an awfully squishy number to me.

Leaving me thinking it was just victory lap bullshit put out by the Mortgage Bankers Association to celebrate their purchase of the US Senate last week... For pennies on the Dollar, I might add.

Everything you ever wanted to know about Pending Home Sales, and The Spin cycle that goes with it.

5/4/09 Pending Home Sales – Spin Cycle Set on “High”
Chris Martenson

It also bears noting that the NAR data we are discussing here was for something called “pending home sales” whereas the chart above is for existing home sales. The difference is that pending home sales is a sampled measure of contracts signed which then turn into home sales typically after a 45 day delay.

However, if done well, these two indexes (sales and pending) should line up quite nicely with a small offset of ~45 days.

Another problem with the pending home sales is that the data includes foreclosures and distressed sales and because of this has, in the past, correlated poorly with actual increases in home sales.

As far back as last August, at least one journalist (Rex Nutting of Martketwatch) caught onto this phenomenon and I thought we’d perhaps moved past the stage of being confused about the reliability or trustworthiness of the Pending Sale index:

lots more...
http://www.chrismartenson.com/blog/pending-home-sales-%E2%80%93-spin-cycle-set-%E2%80%9Chigh%E2%80%9D/18248

As I suspected... :eyes:

"because of this has, in the past, correlated poorly with actual increases in home sales."

If this has been true in the past, why not this time? It's pretty obvious that most of the action is in the distressed markets and not among the highly touted 'first-time home buyers'.

I've never trusted the NAR any more than the MBA.

*sigh* Well, thanks for the info DemReadingDU. :)

5/4/09 Barry Ritholtz: PHSI Gains 1.1%

Here is a bit of genuinely good news: The NAR’s Pending Home Sale Index rose 1.1% from March 2008. The less significant monthly gains were also positive, rising 3.2% from February to March 2009.

As previously noted, this index is based on signed contracts, most of which will close 30 to 90 days later. This gives us an early read on the Existing Home Sales for June/July.

Its noteworthy that most of the gains came in the regions with the highest foreclosures: The South and West gained, while the NorthEast and Midwest fell.

Of course, the NAR cannot help but accentuate the positive regardless:

Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the National Association of Realtors.

The Pending Home Sales Index,1 a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and is 1.1 percent higher than March 2008 when it was 83.7.

Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” he said. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”

At least these guys are consistent: They spin regardless of whether the data is good or bad . . .
http://www.ritholtz.com/blog/2009/05/phsi-gains-11/

:donut: and lurkers. I think I shall give up coffee-my life and times are far too stimulating the extra caffeine is wasted.

Last week-while Thor was pounding his anvil around here-a stray (or not so stray) bolt knocked out our power at the school. Most of our internet was out at work and at my home. This of course when I needed to prepare my state reports that are due this week:eyes: And if I didn't have enough to deal with...along comes the swine flu and we have a shit load of scared kids taking the TAKS tests and scared parents that are scaring their children even more and a staff that is sending me every student that was absent to be checked-even though there is nothing wrong with them.

I doubt I can post more than... this too much work and too little time. What's that line Rocky....eat lightening and crap thunder-well I am almost there. At least the Sinko the Mayo activities give me a break this morning. I haven't even had the time or internet connection to do catch up readings.

Happy hunting and watch out for the bears.

:hangover:

Oh, that's where you were... I was hoping you'd back me up on my stint running the WEE! The feature this week was the movie "Fandango" and I suspected you might be familiar with it... and it's odd correlations with today's Economy.

Nice to see you found a way back here with all of those outages and turmoil.

Believe me... I understand the problems with the Flu Concern. You see, it happens to also be my high allergy season. So, with my normal allergic coughing, sneezing and red-eyes, I've been checked five times for fever or other symptoms... and Whoa! The LOOKS people have been giving me when I cough or sneeze... You would think I were the Grim Reaper himself.

:hi:

or so I've been led to believe...You did fabulous on the Weekend, by the way. Thanks again!

and, Thanks! :D

When you need a break, shoot me a PM. I've got some other Lateral Thinking to unleash if necessary. ;)

Grim Reaper? Me? Why, I'm only a cute fluffy bunny toting a basket full of candy and fun... No Grim here. Only rainbows and sunshine. No 'Doom and Gloom' spoken here... Not a bit.

My philosophy is the only optimists are pessimists... It can only turn out better than or equal to what they expect.

at least 20% of our kids in school are little mucous factories, coughing, sniffling, wipe your nose on your sleeve, booger producing machines. AND NOW the teachers are sending them all down here to check for a fever:eyes: I can't get anything done for taking temps on kids that come in and tell me they don't have a fever, just a runny nose. I am about ready to yank the foil from some folks.

Dan Lempa, president of Midwest Wrecking Co., says demand for scrap is weaker than he's ever seen. Photo: Stephen J. Serio
The downturn in housing and auto production popped a price bubble that just a year ago brought record profits to the scrap metal business.

Metal manufacturing was slow to feel the impact of the recession, as overseas demand kept the industry afloat months after the domestic economy was already reeling. But scrap prices are falling now, squeezing an industry that supplies about half the metal used in everything from cars to soda cans.

Red ink and job losses are rippling through a food chain extending from Northwest Indiana's largest steel mills to solo operators who troll Chicago alleys in pickup trucks looking for discarded metal.

"I've never seen it this bad, and I've been in wrecking my whole life," says Dan Lempa, 60, president of Midwest Wrecking Co. on the Near West Side. "I know we got spoiled, but no one was prepared for this."

Companies like Mr. Lempa's make as much as half their revenue selling metal salvaged from the buildings they tear down. With steel scrap prices down to about $90 per ton from $400 last year, Mr. Lempa cut his workforce in half to 10 people.

The slump that began in October, when metal prices crashed nearly 50% from peak levels, has rolled through the scrap industry with alarming speed, says Phil Zeid, president of Universal Scrap Metals Inc., a wholesaler and processor that deals mostly in copper, aluminum and stainless steel.

. . .


Mr. Labkon also is casting a wider net for customers, sending about 80% of his products by barge to New Orleans and overseas to China, India, Egypt and Turkey. Before the downturn, most went to domestic steel companies such as Pittsburgh-based U.S. Steel Corp. and A. K. Steel Holding Corp. in Ohio.

"Whatever domestic demand is there, we try to fill it first," he says. "When the domestic steel market isn't there, I need to support my business."

Metal sellers say that the Chinese government's efforts to stimulate manufacturing are slowly bidding up the price for non-ferrous scrap, such as copper and aluminum, which helps suppliers. But it hurts domestic users, such as Allied Metal Co., a West Side smelter that supplies aluminum ingots to engine makers. While demand for product remains down, costs are going up, further squeezing margins.

http://www.chicagobusiness.com/cgi-bin/article.pl?article_id=31703&seenIt=1

The blog entry refers to the old kind of pensions -- DEFINED BENEFIT PENSIONS. 401(k)'s are pensions--DEFINED CONTRIBUTION pensions.

http://www.usnews.com/blogs/planning-to-retire/2009/05/04/survey-americans-want-pensions-back.html

BASED ON WHAT???

:argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh::argh:

Sorry kids. I just needed a primal scream. I'm better now...

Humans are programmed to believe authority figures. Questioning authority takes more effort. And I'm so tired. Besides, I think there's something good on TV. Hell, with all those cable channels and On Demand stuff, there has to be. All those network program directors are authority figures, too. They probably know their business. Dammit, you can't expect me to be an expert on everything!

Personally, I'd feel more confident about the economy if a Hollywood celebrity told me it was okay.

:shrug:

The 'elites' want whatever is there, now, before the rest of the herd figure it out. That's why there is so much happy talk to distract the herd. Once the herd figures it out, there will be nothing left, and the system will collapse, whereby the herd become paupers.
:(

I have bitched about the so-called Pension "Protection" Act of 2006. David Cay Johnston says it's a "misleadingly named law". Johnston refers to "The Boehner Bungle" below. The article also mentions cash balance plans that were legalized under -- guess what? -- the Pension "Protection" Act.

We can blame Baucus and Ted Kennedy, the Dem negotiators, as well as a bunch of Dems who voted for it.

http://www.motherjones.com/politics/2009/05/who-ran-away-your-401k

But they also taken away much of our IRAs, pensions whether in our individual or public accounts. I really fear there will be nothing left for us. I'm even wondering if the FDIC will be able to back our bank saving accounts.

:scared:


P.S. Boehner is a jerk

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

http://www.bloomberg.com/apps/news?pid=20601087&sid=aye5Fzy0L_ss&refer=home


Nope. Nothing inherently wrong with the system. Nothing. We don't need to put Glass-Steagall back. We don't need to do anything. Everything is working just perfectly--perfectly for Wall Street.

And the Carlyle Group is swooping in.

As thousands of American High School Seniors are still required to read Ayn Rand.

Wages are falling all across America.

Skip to next paragraph

Fred R. Conrad/The New York Times
Paul Krugman

Go to Columnist Page » Blog: The Conscience of a Liberal Readers' Comments
Readers shared their thoughts on this article.
Read All Comments (401) »Some of the wage cuts, like the givebacks by Chrysler workers, are the price of federal aid. Others, like the tentative agreement on a salary cut here at The Times, are the result of discussions between employers and their union employees. Still others reflect the brute fact of a weak labor market: workers don’t dare protest when their wages are cut, because they don’t think they can find other jobs.

Whatever the specifics, however, falling wages are a symptom of a sick economy. And they’re a symptom that can make the economy even sicker.

First things first: anecdotes about falling wages are proliferating, but how broad is the phenomenon? The answer is, very.

It’s true that many workers are still getting pay increases. But there are enough pay cuts out there that, according to the Bureau of Labor Statistics, the average cost of employing workers in the private sector rose only two-tenths of a percent in the first quarter of this year — the lowest increase on record. Since the job market is still getting worse, it wouldn’t be at all surprising if overall wages started falling later this year.

more....

http://www.nytimes.com/2009/05/04/opinion/04krugman.html?em

Banks get bailout and refuse to negotiate mortgages with homeowners. Frankly, I'll be screaming bloody murder if Treasury gives another penny to these banks. They have had enough stimulation-it's time to help the other 2/3rds of the enonomy.

And employee wages, that's a cost, so cutting wages is good. Wait, how come our customers don't spend as much? Somebody cut their wages? What idiots did that?

When do business schools teach that employees live a double life as customers? Too late! Lost interest.

My favorite DeLuise gag was a commercial. "Koepplinger bread! May I spell that for you? B-R-E-A-D."

He was in many movies with Burt Reynolds. One of my faves was "The End." Reynolds wants to kill himself, and DeLuise is only too happy to help. But every time he tries he ends up nearly killing himself.

Once they were looking out a window, and Reynolds says, "Are you sure it's high enough? I don't want to just break my legs."

DeLuise tries to push him out, but misses and falls out himself. From the pavement below, DeLuise, in great pain, says, "You were right. Not high enough."

WHAT THE FUCK IS GOING ON????

AIG just admits to handing out half a BILLION more in bonuses than they previously reported. WHERE THE FUCK DID THEY GET THE MONEY? Oh, yeah, out of our already empty pockets.

Allen Stanford dropped a quarter of a million in Las Vegas but wants some of "his" money unfrozen so he can pay his legal bills. FUCK HIM WITH A BROOM HANDLE -- and yes, I know that's very offensive and I mean it to be offensive. Let him beg his friends for that money. And if they won't give it to him, then he can throw himself on the mercy of the court and a public defender just like every other poor schmuck.

Chrysler ain't payin' back their "loan" and says they never had any intention of doing so, which means THEY lied to us and so did Timmy & friends who arranged it. and we all know where the buck eventually stops, don't we? DON'T WE?????

Let the fuckin' car companies go bust. Turn 'em over to the uniobn members and let them operate 'em. Fuck every asshole executive who walked away with a bonus bigger than the cost of a dozen day-old donuts. Fire 'em. Let 'em go down the tubes.

Stop the importation of cheap crap from EVERYWHERE. Canada. India. China. The US is no longer the marketplace of the world. US consumers are tapped out, maxxed out, and fucked over.

Stop the hand wringing and whining of the outsourcers who don't wanna be "double taxed." They're making so fuckin' much more money by shipping our jobs overseas, they oughta be glad to pay taxes on those extra profits considering how much they'll still have left. Fuck 'em.

Oh yeah, and fuck that guy who made all those promises a few months ago and now is back pedaling even faster than he was in late November.



Tansy Gold

I've screamed about it, yelled to everyone about corruption, told everyone what they're supposedly "investing" in but it does no good. The brainwashed masses are weak, want to forgive everyone in some big show of how kind they think they are, want to look ahead when they never even looked back unless they're criminals and don't want anyone else to look back at their crimes.

We either hold criminals accountable or America goes nowhere.

My family runs to their 'professional financial planner', who tells them the market always comes back, recovery is just around the corner. I come from a large family, and not one has listened to me either.
:shrug:

When more and more people lose their job, their income, savings, home, health insurance, and are hungry, then they will listen. There won't be anything further to lose.

Welcome, Come back tomorrow! Ozy will post a new thread.
:hi: