STOCK MARKET WATCH, Wednesday June 10

Source: du

STOCK MARKET WATCH, Wednesday June 10, 2009

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

AT THE CLOSING BELL ON June 9, 2009

Dow... 8,763.06 -1.43 (-0.02%)
Nasdaq... 1,860.13 +17.73 (+0.96%)
S&P 500... 942.43 +3.29 (+0.35%)
Gold future... 954.70 +2.20 (+0.23%)
10-Yr Bond... 3.86 -0.01 (-0.36%)
30-Year Bond 4.66 +0.05 (+1.00%)

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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

Happy Days Are Here Again
by Frank Barbera

Since we began getting cautious on the US Stock Market back on May 12th with the S&P at 912, the index has retained a bullish bias, but has nevertheless largely remained in a range (+/- 30 S&P Index points around 912) with lows in the 880 area and highs in the 940 zone, abutting the January 2009 peak. In a recent GST newsletter I told readers that I expected one final push to the low 940 area which then developed the following day. Nevertheless, the stock market has gone from “disaster central” six months ago to apparently ‘bullet proof’ right now, refusing to decline. This leaves investors with a difficult dilemma, to either jump on board the stock market advance or hold off and hope that prices relent.

At the recent Morningstar Conference in Chicago, I had a chance to catch up with legendary investor Jeremy Grantham who did an excellent job in discerning the recent market low. His advice to investors interested in ‘jumping on board’ the advance was a “go-slow” message. He likened the rally as the return of crazed institutional investors engaged once again in the lemming like ‘investment performance derby.’ Hence, there is no solid ‘logic’ for this advance, just a lot of panicked money managers who will lose their jobs if they don’t put money to work. Can you believe how stupid this industry has become? All the research, all the analysis, and in the end, investment managers squander investor capital because they are too scared to take an independent stand. Well, ten years of that approach has produced, guess what? Negative returns -- big surprise! In Grantham’s view, while he allowed for the possibility that the rally could move still higher as the herd of institutions continue to panic, he also cautioned investors that the current rally would be followed by seven lean years. That’s seven lean years. He told investors who felt compelled to try and trade to be sure to measure out their capital and keep a good chunk of it in reserve so that when prices begin to fall once again, and the negative psychology returns, they will have capital left to go shopping with.

At the same conference, legendary bond guru Bill Gross of PIMCO, told investors that the current recession was ‘structural’ and it could take an entire generation (20 to 30 years) for the US economy to pass through this difficult phase. He spoke of an economy set to endure chronically higher unemployment (NAIRU – Non-Accelerating Inflation Rate of Unemployment) on the order of at least 7 to 8%, and likely much higher inflation in the years ahead. None of this is good news for the equity market, and all of these important bearish fundamentals are delightfully being momentarily placed aside by the herds mad-cap rush back into stocks. Of course, if individuals manage their capital in this manner, playing follow the leader, they won’t have capital to invest very long as institutional stock market psychology can change from one week to the next.

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

I can understand the stupidity--Reagan started it with his mezmerizing, and Bush carried to extremes with his fear and greed and total support of anti-intellectual, lower brain reactions. It was the American culture, similar as in how yogurt is cultured, curdled by the introduction of bacteria, that agent of corruption.

What I cannot understand is why it continues today, in the face of all the havoc and pain and loss. Evidently, that pain and havoc and loss hasn't been hitting the right people. The body politic needs to be disinfected.

Bring on the FRSP!

terror. It's quite understandable that no one can think any more.

Everyone -- well, almost everyone -- really wants to go back to the good ol' Clinton days, remembered more fondly in retrospect than they were in reality. The twin shocks of 9/11 and the collapse of the economy have put people on overload. And the general culture of "it's not MY fault" has them it total denial. Facing the truth is far too painful.

I've not posted much on SMW lately because it's been too painful for me, too. It's not that I can't face the truth of the economy and Obama's continuing slide into right wing nutcase conservatism, but that metaphorical screaming at the overwhelming stupidity saps my psyche.

Matt Taibbi's pice from AlterNet/Rolling Stone is a classic. Paulson DID lead us into catastrophe and pulled his own (and his friends') billion-dollar nuts out of the fire first. Bush was a total fuck-up, and Cheney was worse. But it's the totality of the fuck-up that boggles the mind. The collapse of the economy, the housing foreclosure mess, the health care mess, the continued quagmire of Iraq and Afghanistan.

There is no good news, not on a grand, class-wide scale, for the working/middle class. None. But we've been taught for four generations (or maybe a lot more) that violent revolution is bad. What happened in Russia was bad. Even what happened in France was bad, because they didn't just do away with a bad government, they actually killed those they felt were responsible. (Never mind that the civilized English did it 140-odd years earlier.)

We're also so very isolated from the rest of the world. It's always "us" and "them," with "them" being just about everyone who isn't instantly recognizeable as one of "us." We don't speak other languages; we don't travel (except on sanitized cruises). We know nothing of other cultures, other history. We live our lives, especially the past two or three generations, in what is made to appear like self-sufficient little boxes, dependent on no one, responsible for no one.

The discussion on an Ayn Rand thread over in editorials this past week-end brought back just how pervasive that pseudo-philosophy has become, and how deadly. We are living in the last days of Atlas Shrugged. The trajectory of the real collapse is different, and there will be no static electricity generator to save us, but too many of us still believe in a savior, a miracle, a fat lottery winning that will make all the problems go away.

There is no such thing as a protestant work ethic, except as it applies to the other guy. the real mark of god's favor is unearned wealth, and our culture has bought into the god thing far too deeply.

In my little informal group that meets for coffee each morning, one of the women said she was looking forward to a long road trip planned for this summer because her husband would do all the driving and she was going to have lots of time to read. "And the first book I'm going to read is Atlas Shrugged," she said with a big smile and a twinkle in her eye. "I haven't read it for probably 20 years and I just loved that book. I just loved it."

I nearly threw up on her, but that's beside the point.

This is a woman who has never had to deal, as an adult, with the real world. As a child, she grew up poor, but as she has told us many times, someone always came along to help out. She went to private (Catholic) schools from kindergarten through college, always on scholarships. She never had to work during school, never borrowed for her education. and yet she is proud of "always being on my own and paying my own way, never being dependent on anyone else." She never had children.

And while her experience may not be identical to many of the general ranks of deaf and blind Americans, her attitude is. Violence is bad, unless it provides me with the comforts I've come to expect and it's kept out of my direct line of sight. Slavery is bad, unless it provides me with lots of cheap clothes and shoes and other non-essentials. Pollution is bad, unless I'm making it and to avoid it would cause me inconvenience. And socialism is the worst evil of all, unless it's benefiting me and I can easily rationalize it as something else.

And this attitude is pervasive. I see it even in my more progressive friends. I see it even in



Tansy Gold

Don't be so hard on yourself. Yes, I've known women like the one you mention. And men. But they are lightweights. they don't get to change much of anything, because they don't get involved.

The thing is, though, there are so MANY of those lightweights, and by their sheer numbers they do affect policy, even if they do nothing more than vote. And many of them do at least that much.

And when I say I even see tinges of that attitude in myself, I only mean that it's virtually universal, to some degree or other. Friends and acquaintances comment on my flashy plastic made in china sandals, and I always say they're available at the swap meet, $12 a pair, and I think gee, I could stop there and pick up another pair or two, I've got the spare cash. But I already have four pair, don't need any more, don't need to send more of my money into the coffers of those who profit off slave labor. So I stop at four pair. But why didn't I seek out a US manufacturer of sandals and spend $48 on one pair? That's why I say the attitude is pervasive. None of us is perfect. And that's the way human beings are.

Even



Tansy Gold

http://michaelprescott.net/hickman.htm


"Romancing the Stone-Cold Killer: Ayn Rand and William Hickman

by

Michael Prescott"


Part One: Ayn Rand's "real man"

Recently I was rereading Scott Ryan's fascinating, albeit highly technical, critique of Ayn Rand's philosophy, Objectivism and the Corruption of Rationality, and getting a lot more out of it the second time, when I came across a fact culled from a posthumous collection of Rand's journal entries.

In her journal circa 1928 Rand quoted the statement, "What is good for me is right," a credo attributed to a prominent figure of the day, William Edward Hickman. Her response was enthusiastic. "The best and strongest expression of a real man's psychology I have heard," she exulted. (Quoted in Ryan, citing Journals of Ayn Rand, pp. 21-22.)

At the time, she was planning a novel that was to be titled The Little Street, the projected hero of which was named Danny Renahan. According to Rand scholar Chris Matthew Sciabarra, she deliberately modeled Renahan - intended to be her first sketch of her ideal man - after this same William Edward Hickman. Renahan, she enthuses in another journal entry, "is born with a wonderful, free, light consciousness -- the absolute lack of social instinct or herd feeling. He does not understand, because he has no organ for understanding, the necessity, meaning, or importance of other people ... Other people do not exist for him and he does not understand why they should." (Journals, pp. 27, 21-22; emphasis hers.)

"A wonderful, free, light consciousness" born of the utter absence of any understanding of "the necessity, meaning, or importance of other people." Obviously, Ayn Rand was most favorably impressed with Mr. Hickman. He was, at least at that stage of Rand's life, her kind of man.

So the question is, who exactly was he?

William Edward Hickman was one of the most famous men in America in 1928. But he came by his fame in a way that perhaps should have given pause to Ayn Rand before she decided that he was a "real man" worthy of enshrinement in her pantheon of fictional heroes.

You see, Hickman was a forger, an armed robber, a child kidnapper, and a multiple murderer.

Other than that, he was probably a swell guy.

In December of 1927, Hickman, nineteen years old, showed up at a Los Angeles public school and managed to get custody of a twelve-year-old girl, Marian (sometimes Marion) Parker. He was able to convince Marian's teacher that the girl's father, a well-known banker, had been seriously injured in a car accident and that the girl had to go to the hospital immediately. The story was a lie. Hickman disappeared with Marian, and over the next few days Mr. and Mrs. Parker received a series of ransom notes. The notes were cruel and taunting and were sometimes signed "Death" or "Fate." The sum of $1,500 was demanded for the child's safe release. (Hickman needed this sum, he later claimed, because he wanted to go to Bible college!) The father raised the payment in gold certificates and delivered it to Hickman. As told by the article "Fate, Death and the Fox" in crimelibrary.com,

"At the rendezvous, Mr. Parker handed over the money to a young man who was waiting for him in a parked car. When Mr. Parker paid the ransom, he could see his daughter, Marion, sitting in the passenger seat next to the suspect. As soon as the money was exchanged, the suspect drove off with the victim still in the car. At the end of the street, Marion's corpse was dumped onto the pavement. She was dead. Her legs had been chopped off and her eyes had been wired open to appear as if she was still alive. Her internal organs had been cut out and pieces of her body were later found strewn all over the Los Angeles area."

_________________________________________________________________________________________________

Turns out, perhaps all of Ayn Rand's much touted philosophy of "Objectivism" was largely being a groupie of a sociopath...

Who knew? :shrug: (Well, ME for one...) No wonder the Corporatist Sociopaths are so drawn to this sludge. They are drawn to what they know. If Ayn can justify a child killing con man... Well, she could justify anything.

Oh, and you need to add your post to your journal... Tansy! ;)

And THANK YOU for reminding me about the journal.



Remember, too, that I first read Atlas Shrugged when I was about 19 and totally apolitical. The logic of it made sense, if you accept her givens. But her givens don't work in reality, and that's what too many of her devotees can't grasp.

Rational self-interest, a term that has been applied to Randian thought more than once, actually implies the reality of a human community. At a base level, if you're too fucking greedy, they might just kill you off in self-defense. So there has to be a reasonable compromise. Unfortunately, no one gets into that part of it. All they see is the justification of naked greed and hey, that's enough!

:blech:

ANY high school English teacher assigning it.

It's too long. Most kids won't read it. And it's boring.

As literature, it's poorly written. There is no flowing prose, so poetry in the words. It's pedestrian.

As character study, it's even worse. There is no hero's journey. No one is transformed. No one learns anything.


I'm not saying it isn't done; I'm just saying that as a novel of American literature, it lacks in virtually every element of "literary" value.

And this is coming from someone who struggled with and hated The Old Man and the Sea, or Life's a bitch and then the sharks eat your dreams. I found The Pearl (8th grade) monumentally depressing. Even To Kill a Mockingbird, which I just reread a few weeks ago, is discouraging.

But how could you have a (meaningful) classroom discussion on Atlas Shrugged if the students don't have sufficient background in other forms of political economy? Is there any kind of examination of the reliance on science fiction in AS? Galt's Gulch can't operate without its magical invisibility shield or its static electricity converter.

Is the writing of the novel put into context, Rand's personal background and the post-war red scares?

Where are the workers in the novel? Who operates Rearden's mills? Who will build the rolling stock for Taggart Transcontinental? Who will plow the fields and raise the vegetables? (Great cartoon in the week-end discussion thread, btw)

All it would take is one student to ask some hard questions. . . . like what happens to Eddie Willers.

Maybe I should do a blog on "A student's giude to Atlas Shrugged, or how to get your teacher NOT to assign this boring piece of crap."



TG

Which makes the Ayn Rand 'child-killer' groupie's reverence of Hickman even more revolting. As, "The Fountainhead" is the book most closely associated with his, "What is good for me is right." libertarian ideal. :hurl:

What surprises me even more is that it was a prominent banker's child who Hickman exploited and murdered... So, does the embrace of this book by the Financier Class reflect that their predatory responses are strongest in their own circles? And if that's true, what (if any) regard must they have for the average person other than contempt? In any other real world group this connection with Hickman preying on a member of their social peers would result in the book's rejection by the group... But, Nooooo! In the Predatory Financial Class, it only makes them embrace it MORE! Can you believe it? :shudder: You see, this is what we're up against and it takes every fiber of my being to even be witness to this idea of bargaining and compromise with the likes of these free-ranging criminals.

One of the things that struck me a few years after my first reading of AS was that Dagny never got pregnant. (Neither did Cheryll, the only other prominent female of fertile age.) Children are virtually never mentioned, except iirc for a criticism of some nameless woman who refused to order her children to share and the whining Jeff Allen (formerly of 20th C Motors) does regarding some little girl who needed braces and The Company voted to give her the braces for her "self-esteem" and thereby denied a request by some old man who collected classical music records. Margie's self-esteem was dismissed while the record collector was canonized.

The point being that without pregnancies, there is no continuation of the species -- Rand didn't go the test-tube sci/fi route -- and yet motherhood is the absolute antithesis of "I swear, by my life and my love of it, that I will never live for the sake of another man nor ask another man to live for mine."

I didn't know about the Hickman thing until this week-end, because I really walked away from most thing Randian many many years ago. But it may very well be -- I'm no psychologist -- that where children are traditionally seen as financial assets to the working class, they are less valued by the financier class than other assets and therefore someone like a Hickman is considered LESS of a threat because the ideology is okay and kids are, well, expendable??? Is that too harsh a judgment?

I have to say that I didn't like The Fountainhead, or maybe I just didn't get it. I read it once and never went back to it. Not sure I could now.


TG

Whom OUR PARTY is perfectly happy with assigning life/death decisions about Health Care. If they choose a status-quo compromise this is what they get. Which, is just fine if you're more concerned with handing even more money to these predatory psychopaths instead of, say... Health care to the citizens.


They've already proven they put profit before providing health services dozens of times... In fact, it was so bad even Schwarzenegger had to sign a law restricting their ability to deny legitimate claims.

Let me say one thing that I believe touches on one aspect of being human, inherently subject to the odd conditions of such: we live with contradictions all the time. A good student of history will say that you cannot judge past events as those who lived in it were creatures of their own time. Moving forward, looking back, we see how ridiculous those apparently good calls, at the time, actually were. Because they served to perpetuate additional bad calls moving forward.

Where I condemn the past is in the present, when we as creatures of habit repeat the mistakes of our forebears in an attempt to correct inconveniences that grew from bad decisions of the past. That's a form of insanity. We really need to read more history and eschew the idea of resurrecting it.

As for your friend who relishes the chance to read Atlas Shrugged while ignoring the world outside her window - that's too bad. I feel sorry for her. "The unexamined life is not worth living," Socrates said at trial for heretical teachings. Those who have tasted the bitter wine of self-actualization justifiably recoil at the notion of savoring arrested development, two decades old.

I embrace my bitterness and contradiction. I own problems that need correcting. That makes life worthwhile for me. And, yes, I too feel bitter at how matters have been handled by an administration that rode to victory with so much promise. Still I hope for the best a pragmatist can expect in an election cycle.

08:30 Trade Balance Apr
Briefing.com -$29.5B
Consensus -$29.0B
Prior -$27.6B

10:30 Crude Inventories 06/05
Briefing.com NA
Consensus NA
Prior +2.87M

14:00 Treasury Budget May
Briefing.com NA
Consensus -$181.0B
Prior -$165.9B

14:00 Fed's Beige Book

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

U.S. April trade gap widens 2.2% to $29.2 bln
8:30am Today

U.S. April trade gap close to consensus forecast
8:30am Today

U.S. April imports fall to lowest since Sept. '04
8:30am Today

U.S. April exports drop to lowest since July '06
8:30am Today

SINGAPORE – Oil prices soared above $71 a barrel Wednesday in Asia, reaching a 2009 high, as investors poured money into the commodity as a hedge against a weakening U.S. dollar and inflation.

Benchmark crude for July delivery was up $1.41 at $71.42 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Tuesday, it jumped $1.92 to close at $70.01.

Oil has jumped more than 100 percent in three months as traders have cheered news showing the worst of a severe U.S. recession is likely over, and have brushed off data — such as a 9.4 percent unemployment rate in May — that suggest crude demand will remain weak.

.....

In other Nymex trading, gasoline for July delivery rose 2.11 cents to $1.99 a gallon and heating oil gained 2.58 cents to $1.83. Natural gas for July delivery was up 6.3 cents at $3.80 per 1,000 cubic feet.

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

"You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of OIL."

I am looking forward to the end of OIL. The end of OIL means the end of Oil Companies, the BFEE will be another has-been, and World War, war for oil resources, will come to a screeching halt.

Modern Warfare will be impossible without Oil. Without fuel for the bombers, the drones, the tanks, the HumVees, without petroleum for the bombs and the ubiquitous plastic, without the massive industry, little tinpot dictators like Bush will be reduced to less than Kim Jong Il status--standing in platform shoes or high-heeled cowboy boots and having temper tantrums on radio.

It is a future with many compensations for the loss of Oil. The end of plastic except for the most vital medical uses, for example...going back to wood and metal furnishings, and real fiber carpets and clothing, eliminating the daily road rage for electric trains and buses, I could see us all quite happy.

Not to mention that Monsanto, with their pesticide-dependent products, will be out of business. And factory farms will find that their waste products are in great demand for fertilizer. Big Business in general will get a whole lot smaller, more people sized. Globalism will cease to plague us.

The factory farm will be another entity sent to the compost pile. Without oil the guys who plant and harvest much of our food are out of business. No more 400 horsepower tractors plowing hundreds or in some cases thousands of acres.

I wonder how many folks do not think about what is going to happen to our source of food if the end of oil does come to pass. There will need to be a whole lot of green thumbs to get the green shoots to grow.

I suppose you could make electric tractors, but the amount of distance one could go...

and it would take a really long extension cord! :rofl:

and perhaps that need would prevent diversion of same to less useful and productive uses.

there will be a propane powered tractor at an auction. They are older than the hills and usually not in good shape.

by GM. For Example!

"The farmer used his oxen."

I dunno about oxen but a guy offered me a pair of Percherons last week. He said they were a good working pair. Maybe I ought to think this over!

And search for Brian on YouTube. HILARIOUS! And G-rated to boot!

my dad's two favorite sayings Hard work never killed anybody, and What do you think I had all you kids for, now get to work.

Have a good day Roland99 !

I prefer Shires and Clydesdales, but a good pair of draft horses will pay you back a thousand-fold!


Tansy Gold, betraying her 70s back-to-the-land dreams

This is turning out to be a very difficult decision.

Have a good one!

There was a farmer whose property abutted the place I lived. He had a team of enormous Belgians, kept mostly for showing at local fairs and such, but kept in shape by tending one of the fields on the farm. I got to talk to him one day and he said he'd gladly farm with nothin' but horses if he had his druthers.

(Don't ask me why this isn't working -- it's a link to a photo I took in early March 1971. I've NEVER been good at posting pix to DU)




(On second edit, duh, I guess it IS working!)

About that same time, there was a story on 60 minutes about a guy in Minnesota who switched from motorized to direct horsepower. He cut his acreage to what he could comfortably handle by himself with a single team and discovered that he worked less and profited more, because the expenses were less. Again, iirc, he was able to go almost exclusively organic. no chemical fertilizers.

It's not like the horses work for free. There's feed and vet bills and so on, but it seems to me the trade-off would be worth it.


When in doubt, I always head for Mother. Mother Earth News, that is.

http://www.motherearthnews.com/Happy-Homesteader/Tractors-Horses-Amish.aspx

Bio-engineering at its finest.

Now, unlike Congress, I'm willing to entertain some variance on what form this pool will take. (Mostly, because I don't have any 'feeling' for how things are going to shake out... I really don't. It's difficult to gage pure speculation.)

With that in mind... How do you want to run the pool?

Some suggested items to wager on...

Peak value?
Date of peak value?
Date someone somewhere admits that escalating oil speculation is going to kill any 'green shoots'?
Date someone somewhere realizes that oil speculation is the means the former investment 'banks' are going to try to rack up enough money to pay back the TARP funds so they can clear a hefty bonus next Fall? (Ha. Yeah, like that will ever be admitted.)

Any others?

What's your choice?

(Debt moves up .015B$. That's small.)

= Held by the Public + Intragovernmental(FICA)
= 7,109,946,379,411.88 + 4,280,307,730,315.22
UP 15,040,049.19 + UP 2,295,608,013.10

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 307-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: $9.78, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 306,609,542 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,149.05.
A family of three owes $111,447.16. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 19 reports in the last 30 to 31 days.
The average for the last 19 reports is 6,924,227,066.84.
The average for the last 30 days would be 4,385,343,809.00.
The average for the last 31 days would be 4,243,881,105.48.
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$/day.
There were 94 reports in 139 days of Obama's part of FY2009 averaging 0.05B$ per report, 0.06B$/day so far.
There were 169 reports in 251 days of FY2009 averaging 8.08B$ per report, 5.44B$/day.

PROJECTION:
There are 1,322 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 18.6T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
06/08/2009 11,390,254,109,727.10 BHO (UP 763,377,060,814.02 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: 1,365,529,212,814.70 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/15/2009 +013,064,365,189.63 ------------**********
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******
05/26/2009 +000,178,213,075.69 ------------******** Tue
05/27/2009 +000,332,821,919.42 ------------********
05/29/2009 +019,434,324,960.50 ------------**********
06/01/2009 +078,540,152,146.76 ------------********** Mon
06/02/2009 +000,543,288,286.72 ------------********
06/03/2009 -000,003,266,733.82 -----
06/04/2009 +011,755,789,483.75 ------------**********
06/05/2009 -000,226,149,345.97 ---
06/08/2009 +000,015,040,049.19 ------------******* Mon

141,038,498,115.75 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,725,622,306,468.03 in last 263 days.
That's 1,726B$ in 263 days.
More than any year ever, including last year, and it's 170% of that highest year ever only in 263 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 263 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=3914135&mesg_id=3914150

(Debt moves up .025B$. That's small again.)

= Held by the Public + Intragovernmental(FICA)
= 7,109,972,049,499.36 + 4,281,487,205,929.59
UP 25,670,087.48 + UP 1,179,475,614.37

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 307-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: $9.78, ABOUT TEN BUCKS for a 1B$ 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 12 seconds we net gain a another American, so at the end of the workday of the report, there should be 306,616,742 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,152.11.
A family of three owes $111,456.33. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 20 reports in the last 30 to 32 days.
The average for the last 20 reports is 6,638,272,998.59.
The average for the last 30 days would be 4,425,515,332.39.
The average for the last 32 days would be 4,148,920,624.12.
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$/day.
There were 95 reports in 140 days of Obama's part of FY2009 averaging 0.01B$ per report, 0.04B$/day so far.
There were 170 reports in 252 days of FY2009 averaging 8.04B$ per report, 5.42B$/day.

PROJECTION:
There are 1,321 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 18.6T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
06/09/2009 11,391,459,255,428.95 BHO (UP 764,582,206,515.87 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: 1,366,734,358,516.50 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
05/18/2009 -000,012,816,531.74 ---- Mon
05/19/2009 +000,244,659,127.63 ------------********
05/20/2009 +000,422,183,214.17 ------------********
05/21/2009 +016,742,591,292.36 ------------**********
05/22/2009 +000,007,301,981.46 ------------******
05/26/2009 +000,178,213,075.69 ------------******** Tue
05/27/2009 +000,332,821,919.42 ------------********
05/29/2009 +019,434,324,960.50 ------------**********
06/01/2009 +078,540,152,146.76 ------------********** Mon
06/02/2009 +000,543,288,286.72 ------------********
06/03/2009 -000,003,266,733.82 -----
06/04/2009 +011,755,789,483.75 ------------**********
06/05/2009 -000,226,149,345.97 ---
06/08/2009 +000,015,040,049.19 ------------******* Mon
06/09/2009 +000,025,670,087.48 ------------*******

127,999,803,013.60 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,726,827,452,169.88 in last 264 days.
That's 1,727B$ in 264 days.
More than any year ever, including last year, and it's 170% of that highest year ever only in 264 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 264 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=3915576&mesg_id=3915584

WASHINGTON – House lawmakers on Tuesday said they have subpoenaed the Federal Reserve to hand over e-mails, notes and other documents related to its role in Bank of America Corp.'s acquisition of Merrill Lynch & Co.

The lawmakers' subpoena comes after claims that top government officials pressured Bank of America Corp. CEO Ken Lewis to complete the bank's purchase of Merrill Lynch, threatening his job security. Lewis has testified that he had been advised by the officials, former Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke, not to disclose details of Merrill Lynch's difficult financial position, according to New York State Attorney General Andrew Cuomo.

The Fed and Paulson have denied pressuring Bank of America to buy Merrill Lynch.

....

In April, Attorney General Cuomo confirmed reports that Lewis had told him that Paulson and Bernanke had pressured him to go through with the deal.

http://news.yahoo.com/s/ap/20090610/ap_on_bi_ge/us_fed_subpoena

The Financial Times reports that the House Oversight committee wants to have a little chat with the Fed over the widespread reports that it muscled BofA more than a tad to complete its acquisition of Merrill after the Charlotte bank learned that the securities firm had posted large losses in December and tried to exit the deal.

What is noteworthy about this move is that this is apparently the first time in 20 years that Congress has subpoenaed the Fed. Some will lament the supposed loss of Fed independence, but Willem Buiter has already tagged the Fed as the second least independent major central bank, surpassed only by the Bank of Japan.

As we noted in an earlier post, the Fed began selling out its vaunted independence in the Greenspan era, when the Maestro made nice to the Clinton administration for an unidentified quid pro quo. presumably reappointment as Fed chairman. And Bernanke hasn't simply been coordinating policy with the Treasury, but has instead acted as an off balance sheet vehicle for the Treasury, enabling it to circumvent budgetary constraints and evade the need for Congressional approval (and oversight too).

So while it is a positive step to see this shot across the Fed's bow, Congress peculiarly is not going after the elephant in the room, namely the Fed's increasing role, as Buiter put it, as quasi-fiscal agent of the Treasury.

http://www.nakedcapitalism.com/2009/06/house-subpoenas-fed-re-merrill-sale-to.html

The main act, Goldman Sachs, is tossing BoA under the Congressional bus as a sleight of hand to continue their mismanagement of everything else.

that go back to J.P. Morgan's heyday in the early 20th century. Start a rumor even if it's based on a shred of fact. Then capitalize on the losses of your rival.

It's fundamental, really. Sun Tzu knew this approach in warfare: If you can control the enemy's charge then you have won the battle.

June 10 (Bloomberg) -- Fiat SpA said a U.S. Supreme Court ruling cleared the way for the purchase of most of Chrysler LLC assets and expects the transaction to close “shortly.”

The new company, Chrysler Group LLC, will be 20 percent owned by Turin, Italy-based Fiat, 9.85 percent by the U.S., 2.46 percent by Canada and 67.69 percent by a United Auto Workers union retiree health care trust fund. The U.S. and Canadian governments financed the sale with $2 billion.

....

U.S. Supreme Court judges yesterday rejected bids from creditors to block the transaction, which will allow Chrysler to sell its best assets to the new, Fiat-led company. The court overturned objections by Indiana state pension funds and U.S. consumer advocates, saying the challenges didn’t meet the legal standard for an emergency stay of the deal.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ac_6.eekDURQ

the Chrysler/Fiat deal is a go.

June 10 (Bloomberg) -- Ten lenders that persuaded the U.S. yesterday to sell back preferred shares for $68 billion may need to spend another $5.1 billion on warrants held by the Treasury to free themselves from government curbs.

JPMorgan Chase & Co.’s warrants alone are worth $1.8 billion, followed by Morgan Stanley at $789 million and Goldman Sachs Group Inc. at $609 million, according to estimates by Linus Wilson, assistant finance professor at the University of Louisiana at Lafayette. He values warrants of all 10 companies at $3.7 billion to $4.6 billion, while Credit Suisse AG estimated $4 billion to $5.1 billion on June 2.

....

The American Bankers Association has said the U.S. doesn’t deserve a windfall in return for holding warrants for a few months or for investing in banks that weren’t in danger of failing. The Washington-based trade group said in April the warrant buybacks create an “onerous exit fee” and a “punitive obstacle” to leaving TARP.

....

Banks get the right of first refusal on buying back their warrants. If they can’t agree with Treasury on a price, the government may try to sell them at auction to third parties, a Treasury official said in an interview in May.

http://www.bloomberg.com/apps/news?pid=20601103&sid=a2aY_usXQ3yw

That's all I need to hear in order to know that what follows next is some self-dealing, manipulative, lying, ****!

Banks, you got money from us. Banks, you owe us money. Banks, money costs money. You owe us money for the money.

Something like what I heard for going $2.10 over on a small checking account for our high school granddaughter and being walloped with a $35 fee. Especially since it was covered that afternoon before 6. Sorry, I can't understand "onerous" or "punitive" when it comes to collecting money owed to me and millions of other taxpayers, bankers.

Read a post on DU yesterday about a cancer victim in his seventies who went in and "robbed" a bank as he has no health insurance and he has no way left to pay his bills.

The judge gave him five years, saying that he will that way get the meds he needs and the treatment, and since it is a terminal cancer, he will not outlive the sentence. Just an average citizen who has to go to jail in order to get needed healthcare.

I also read about how Paulson was able to defer paying taxes on 200 million dollars through the timing on his taking up his position at the Federal Reserve. Just an average Wall Street criminal, who will always have his needs met and no penalties ever.

What is wrong with this nation - that there can be such discrepancies!

They have been evicted from the Dow list of thirty industrial stocks. They are replaced by Travelers and Cisco.

Actually, that's a wish, not a prediction or promise. But when it's so green and growing outside, it's hard to believe in winter and worse.

:donut: :donut: :donut:

I was out-of-town yesterday and did not return until late evening. Too tired to turn on the computer, I tried catching up with things this morning from yesterday's thread in an abbreviated amount of time.

I'm still looking for more data on my "bond market as next bubble" idea. Right now, I'll just re-post this chart.

wow.

With all the talk of "green shoots" of economic recovery, America's banks are pushing back on efforts to regulate them. While politicians talk about their commitment to regulatory reform to prevent a recurrence of the crisis, this is one area where the devil really is in the details - and the banks will muster what muscle they have left to ensure that they have ample room to continue as they have in the past.

The old system worked well for the banks (if not for their shareholders), so why should they embrace change? Indeed, the efforts to rescue them devoted so little thought to the kind of post-crisis financial system we want that we will end up with a banking system that is less competitive, with the large banks that were too big too fail even larger.

It has long been recognized that those America's banks that are too big to fail are also too big to be managed. That is one reason that the performance of several of them has been so dismal. When they fail, the government engineers a financial restructuring and provides deposit insurance, gaining a stake in their future. Officials know that if they wait too long, zombie or near zombie banks - with little or no net worth, but treated as if they were viable institutions - are likely to "gamble on resurrection." If they take big bets and win, they walk away with the proceeds, if they fail, the government picks up the tab.

....

Restructuring gives banks a chance for a new start: new potential investors (whether holders of equity or debt instruments) will have more confidence, other banks will be more willing to lend to them, and they will be more willing to lend to others. The bondholders will gain from an orderly restructuring, and if the value of the assets is truly greater than the market (and outside analysts) believe, they will eventually reap the gains.

But what is clear is that the Obama strategy's current and future costs are very high - and so far, it has not achieved its limited objective of restarting lending. The taxpayer has had to pony up billions, and has provided billions more in guarantees - bills that are likely to come due in the future.

....

We need to break up the too-big-to-fail banks; there is no evidence that these behemoths deliver societal benefits that are commensurate with the costs they have imposed on others. And, if we don't break them up, then we have to severely limit what they do. They can't be allowed to do what they did in the past - gamble at others' expenses.

http://www.thejakartapost.com/news/2009/06/09/america039s-socialism-rich-corporate-welfarism.html

http://zerohedge.blogspot.com/2009/06/goldman-now-dominating-dark-pool.html

The last time I discussed dark pools, it was in the context of SEC regulation due to the increasing sense of opacity of what happens in this subset of the stock market. A new Reuters article adds fuel to the fire, indicating that not only are dark pools aggressively taking away from exchange trading action, but it is in fact bank-run dark pools that are the primary culprit.

"Dark pools," where orders are anonymously matched so that traders do not alert the wider market to their intentions, have triggered concerns that stock pricing may not be transparent.

But the growth of those run by broker-dealers such as Goldman Sachs and Credit Suisse are squeezing other "dark" electronic trading venues, as well as exchanges, resulting in lower fees.

"The dark pools are definitely going to grow; the wild card is any new regulation," said Dmitri Galinov, director and head of liquidity strategy at Credit Suisse's advanced execution services, running the bank's CrossFinder dark pool.

Overall, dark market share rose last year, but in the last eight months hit a ceiling near 9 percent of the U.S. market.

And while dark pools controlled by independent private ventures such as ITG would be a perfectly normal response to market demand for liquidity facilitation, it is surprising to discover that a vast majority of the pools are in fact controlled by the very same recipients of TARP funding (who are now doing all they can to issue stock so they can repay their TARP bonus burden).

Dark pools owned by brokers and large market makers accounted for 70 percent of all dark U.S. equity volume in April, up from 64 percent in December and from 58 percent a year earlier, according to Rosenblatt Securities, a widely referenced agency broker that tracks 18 dark pools.

Dark pools, which usually publish trades to the consolidated tape with little detail well after they are executed, have been around for decades, but their brands have gained more exposure in the last few years.

As frequent Zero Hedge readers know, when it comes to program trading on a traditional exchange such the NYSE, Goldman Sachs is by far the most dominant force. It is by Goldman's own admission that the primary reason for this monopoly is to facilitate high-frequency trading in the open market. It would only be fitting that Goldman would be the dominant market player in the dark pool high-frequency market as well. And, as it turns out, it is.

Goldman's Sigma X was the largest in April, followed by market maker GETCO's Execution Services, and Credit Suisse's CrossFinder -- the winners benefiting from the collapse of other investment banks such as Lehman Brothers.

Justin Schack, vice president of market structure analysis at Rosenblatt, said broker-run dark pools had grown because they're faster, cheaper and open to algorithms -- the computerized trading programs that dominate the market, especially during volatile periods such as last year's crash.

"Market structure has changed over the last five or six years in ways that favor small size, rapid-fire trading," Schack said. (SPY IOI anyone?)

The most successful bank-run dark pools have steady participation from individuals, or retailers, whose standing trade orders are gobbled up by high-frequency players who use algorithms and account for about 65 percent of the market.

Why is Goldman Sachs so obsessed with high frequency trading, be it in the open market or in dark pools? Would it have something to do with traditional liquidity providers getting cremated in the current market as a function of usual mean reversion factors getting obliterated.

As was previously noted, the ample room for manipulating this shadow market has been the reason why none other than the SEC has started taking a much more cautious look at what goes on under the surface.

(R)egulators, exchanges and others have raised concerns that dark pools do not publicize their quotes, that there is a general lack of comprehensive data on them, and that some provide early messages, or "looks," to specific market players about upcoming orders.

"I am concerned that (undisplayed quotes) may not promote public confidence in the equity markets," James Brigagliano, co-acting director of the U.S. Securities and Exchange Commission's trading and markets division, told a major market structure conference in New York last month.

Most amusing is the response by Bank of Monetreal's Doug Clark, managing director of quantitative execution services, on whether Canadian banks could launch dark pools: "There would be instant vilification from the rest of the public. So I don't think they're going to do it." So apparently even the "backward national park" to the north is sufficiently advanced to know not to dabble in a form of exchange which is essentially a platform for shady dealing to occur under the public's radar.

And yet, here in America, the investing public not only does not care about these underground exchanges but also welcomes them happily, because they "lower trading fees." But all is well - let's just leave all the dark pool regulation to the SEC. They have proven beyond a reasonable doubt that when it comes to issues such as market manipulation, be it by individuals or semi-nationalized corporations, they are a phenomenal first line of response. And in the meantime the general public will happily keep on buying stocks, unaware of what is really happening on the margin.

For those interested in more data on dark pools, attached is a dated piece by Rosenblatt Securities discussing some of the major aspects of this market, and also validating Goldman's Sigma X market dominance in significant detail.

Also, a good representation of how certain funds take advantage of micro block trading (which may or may not have been done on a dark pool), I refer readers to the following 13-G filed recently by Millennium Partner in Composite Technology Corp: amusingly Izzy Englander's firm discloses the stock offloading pattern in the Schedule A in vivid detail. It is a stunner.

SEE ORIGINAL ARTICLE FOR LINKS

I'm glad Naked Capitalism is offering Durden a forum.

As for the dark pools trading: it sounds like a great idea for anyone with something to hide.

Going to have to read this in detail tonight.

Thanks.

This is the Obama administration, where all we need is the talking points that say we want the stinkin' transparency.

Jun 10, 2009, 6:24 a.m. EST

U.S., China optimism lifts stock futures

By Steve Goldstein, MarketWatch
Fixes amount of TARP money paid back

LONDON (MarketWatch) -- U.S. stock futures on Wednesday pointed to a strong start as investors went back into equities and commodities on confidence surrounding the U.S. and Chinese economies.

S&P 500 futures rose 11.3 points to 950.90 and Nasdaq 100 futures rose 12.5 points to 1,513.20. Futures on the Dow Jones Industrial Average rose 100 points.

On a day when U.S. banks paid back $68 billion of federal assistance, U.S. stocks finished Tuesday with another largely range-bound session. The Dow Jones Industrial Average fell 1 point, the S&P 500 rose 3 points, while the tech-heavy Nasdaq Composite rose 18 points after an improved profit forecast from chipmaker Texas Instruments.

But asset classes that are particularly sensitive to the economy improved on Wednesday.

Besides stock futures, oil futures rallied past $71 a barrel. Oil has been helped by the Department of Energy's increase of its 2009 oil price forecast. Data on weekly energy inventories is due at 10:30 a.m. Eastern. API's own report showed a larger-than-expected draw of crude stocks.

Amazing how things can improve so much while we sleep.

NEW YORK (CNNMoney.com) -- U.S. stock were set to open higher Wednesday after the Supreme Court cleared the way for Chrysler to exit bankruptcy and a rise in oil prices.

At 6:55 a.m. ET, Dow Jones industrial average, S&P 500 and Nasdaq 100 futures were higher, recovering from earlier lows.

Futures measure current index values against perceived future performance and offer an indication of how markets may open when trading begins in New York.

Art Hogan, chief market strategist at Jefferies & Co., said the potential rally is based on expectations for inflation in such "hard assets" as oil, which is now selling for more than $71 a barrel, as well as coal, steel, copper and natural gas.

http://money.cnn.com/2009/06/10/markets/premarkets/?postversion=2009061007

S&P 500 +12.70 952.30 6/10 7:39am

NASDAQ +14.50 1515.25 6/10 7:27am

Dow Jones +98.00 8840.00 6/10 7:26am

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

Last trade 79.624 Change -0.218 (-0.28%)

Pound, Euro Still Supported By Risk Appetite, But Will Rising Oil Prices Dim Outlook For Recovery?

http://www.dailyfx.com/story/bio1/Pound__Euro_Still_Supported_By_1244628622620.html

The Pound has started to give back some of its gains after reaching as high as 1.6443 following the release of the U.K. trade balance report and manufacturing numbers. Output in the U.K. rose for a second month by 0.3% as demand for automobiles grew on the back of easing credit markets. Meanwhile, the visible trade balance widened to -£7000 from -£6589 as rising imports outpaced a slight increase in exports. The lack of an improvement in demand for British goods considering the improvement in global conditions may be a concern for traders and adding weight to the sterling.

The sterling fell nearly 100 pips after the release of the data but it may be attributed to profit taking as the GBP/USD rose over 600 pips in the past two days. It is clear that forex traders are looking past the political turmoil in the country and focusing on the improving fundamentals which continued with the growth in manufacturing output in April. The mining and oil sectors saw 2.4% and 2.5% gains during the month as rising commodity prices have spurred the increase in activity. Indeed, oil has risen back above $70 bbl which has helped pushed energy equities higher and the increase in risk appetite has been a driver of bullish cable price action. However, the expectations of rising gas prices will dim outlook for consumer spending and could slow the pace of a global recovery. Therefore, we could start to see rising concerns begin to weigh on currencies that have benefited from the increasing optimism.

The Euro has also come under pressure after reaching as high as 1.4143 during overnight trading as we have started to see some profit taking. There was mixed data from the Euro-zone as French industrial production unexpectedly fell by 1.4% versus expectations if a 0.2% gain. Growth remains a challenge for the country as the Euro-zone finds itself in the worst recession since WWII. Meanwhile, Italian output rose by 1.1% which was more than the 0.8% that economists forecasted and the highest in a year. However, it ended 11 straight months of contraction. Indeed, growth figures for the country showed that the economy contracted by 2.6% in the first quarter as global demand has shrunk for Italian goods. The Euro has been tied to risk appetite and with U.S. futures pointing toward a higher open, we could see Euro strength return.

The dollar continues to be on the run as demand for equities and commodities continue to plague the greenback. Event risk today will come in the form of the trade balance, monthly budget statement and the Fed Beige book report. The U.S. trade deficit is expected to widen to $29.0 billion from $27.6 billion as consumer demand starts to improve as the economy stabilizes. Meanwhile, traders will be closely watching to see if government spending is on a decline after the Obama administration has pledged significant cost cutting in an attempt the trim the deficit in half by the end of the President’s term. Fears are growing that if the government cuts spending drastically it may slow the recovery process for the economy. The biggest threat to the dollar may come from the Fed Beige book as the forward looking indicator will show how the 12 federal districts are performing and the expectations for the various regions. It typically generates a reaction from equity markets which could impact dollar price action.

...more...

Yen Crosses Well Bid Overnight on Flow Back into Yield

http://www.dailyfx.com/story/bio2/Yen_Crosses_Well_Bid_Overnight_1244631944106.html

Data in the overnight session of trade was light, but this was not reflected in price action which continued to see a flow back into the higher yielding currencies. The antipodeans were the prime beneficiaries as a result, with higher US equity futures and commodity prices helping to fuel the relative strength. The Yen crosses were also very well bid, with Gbp/Jpy, Cad/Jpy and Aud/Jpy, all managing to squeak out fresh 2009 highs. There were however more concerns over the state of the Eastern European economies, with Fitch warning that Latvia faces a “significant and rising” risk of currency devaluation. Sweden was also in the news announcing that it would be borrowing some EUR3B from the ECB to ensure financial stability. In the Eurozone, German CPI came in as expected, while in the UK data was mixed, with a stronger industrial production release but much weaker trade balance. Bank of England Barker was on the wires expressing her concern over the sustainability of any economic pick-up. US mortgage applications have come out at -7.2%, showing an improvement from the previous week’s -16.2% reading. Looking ahead, Canada international merchandise trade (0.8B expected) and new house prices (-0.5% expected) are due at 12:30GMT, along with the US trade balance (-$28.7B expected). Later in the day, the Fed Beige Book and US monthly budget statement (-1$75B) are due at 18:00GMT. US equity futures show all major indices opening up more than 1%, while commodities are very well bid with oil leading the way after breaking to fresh yearly highs above $71.



...more...

6/10/09 A Top-Level Economy Based On Credit/Consumption
Charles Hugh Smith

The U.S. economy produces little surplus and as a result it has lived off expanding credit and frivolous consumption. A top-level economy without a foundation of surplus will collapse.


One of the key insights in Joseph Tainter's The Collapse of Complex Societies is that once an economy's primary surplus dwindles to zero, it is doomed to implosion. The U.S. surplus has been less than zero for decades.

Correspondent Michael S. recently recommended this article on Joseph Tainter's work: Professor at USU says U.S. society may collapse:

Tainter, who heads the department of environment and society at Utah State University, told the newspaper that the current course of the economy and what some believe is a desperate effort to shore up the complex and almost inscrutable financial sector of the economy are manifestations of at least a partial collapse that invariably follows a society's boom.

That the U.S. economy is primarily "top-level" consumption teetering on a dwindling foundation of real surplus is painfuly obvious. This "you can't parody American life, it's a self-parody" article, Growing Up in a Recession (BusinessWeek) appears to be sympathetic to the poor folks who once raked in $250,000 a year producing nothing of value and cheers their valiant attempts to "re-invent" themselves into some equivalently useless work which they hope will produce $250,000 of "value".
.
.
Elsewhere in the article, other people who once earned $240,000 are stunned that the merry-go-round actually ground to a halt. Unable to confess that their former "professions" were top-level frivolities without any real economic value, thay are picking through the shards of the consumer society, hoping that magical thinking will get them through "this rough patch."

Uh, I hate to be the one to tell you, folks, but this rough patch will last about 20 years--or maybe longer. The reason is that the entire 25-year bull market in everything from 1982-2007 was built not on surplus production which could be traded at a profit but on ever-larger mountains of debt: debt taken on by our government, corporations and households. Behold reality:


The chart clearly shows that debt has replaced production and surplus as the source of spending money in every level of the U.S. economy. But credit has this funny characteristic: it is based on collateral of some sort. Once the collateral (houses, office towers, stock portfolios, net income, etc.) decline in value then there is no basis for additional credit.

more...
http://www.oftwominds.com/blogjune09/top-level06-09.html

edit: Chris Martenson has also said that the next 20 years will be unlike the previous 20 years. See sig line for links...

and equal distribution. We have neither, nor is it a policy, officially, culturally, or any other way. Only the greenest of the green see a sustainable, equitable economy as a goal. Everyone else is wrapped up in the infinite growth model, or some variation thereof.

Because I'm a glutton, and I want to see the twisted logic people use to ease the cognitive dissonance.

so far

:eyes:

to deal with the cognitive dissonance.

It's so f*cking frustrating sometimes.

And then Plaster it all over GD claiming it is "Fact", and that this is "Proof Of Things Getting Better".

Then if someone brings up legitimate questions or posts something that contains facts, figures, or analysis that counters the Propaganda, they dismiss it, mock, insult, or just say it doesn't exist.

I always wondered what living with the cognitive dissonance in 1930's German was like.

I have a feeling we are about to find out.

there are a lot of people laughing about it daily over at progressive independent dot com.

Who LIED about EVERYTHING for Eight Years concerning the economy, now that our "Football Team" has the ball, it is the undisputed WORD OF GOD.

This is incredible.

It is becoming clear that many DU'ers don't give one scintilla of a shit about The Truth, they care about being on the Winning Team, and believing whatever the coaches tell them is the Truth.

At the risk of getting myself TS'ed forever, isn't this what THE OTHER SIDE DID FOR EIGHT YEARS WITH THEIR DICTATOR?

Are we becoming that which we so staunchly fought against?

I think I am regrettably beginning to believe so.

SOME of us have not yet drunk the FlavorAid. We may be a minority, but we're still here, still questioning.

Seriously -- SMW is THE safe/sane place on DU, maybe on the whole intertubenetsthingy, because the worst of it is that our QB seems to be calling some of the same plays as the old one, probably sent in from the same coaching staff. He just does it with a little more grace and skill. . . .


:hug:



TG

World is FLAT.

Last night there was a thread about the Banks paying back the TARP money, and how it was good for US business, and I seriously think some people are going Mentally Ill with the level of spin and rationalization they are using.

The country is slowly going insane.

I have to admit, I am frightened right now by most people.

where you had to cross your eyes a bit, relax and let the picture reveal its depth?

(You get points if you get THAT reference.) :)

is the 72' yawl on which I crewed as a teenie. Days polishing teak, nights playing trio sonatas on the deck.
Punktlos bin ich... :yoiks:

We missed you the last week or so.

Hpe everything is going well.

Everything IS actually going well.

Business is starting to pick up, but I am still VERY Cautious at this point.

I think we are getting lucky, but I hope it's a trend.

Does that make me a failure and unworthy?

The reference is from the Movie Mall Rats by Kevin Smith. :)

The big running joke throughout the film is that William is standing in front of one of those Magic Eye Pictures, trying to make out what it is. Everyone else can see The Sail Boat, but he cannot. :)

My son-in-law went to school with Kevin Smith. I'm going out to Jersey in August. I better not tell him I can't see the sail boat. . . .

;-)


TG

That is so cool he went to school with him. Does he have any good stories?

My Best Friend in High School was Dolly Parton's Nephew, so that is my brush with Greatness. :) (And she really IS the Salt Of the Earth. Wonderful, WONDERFUL woman.)

weekly read. :hi:

I would really like to know what went on in a few of those folks' heads :crazy:

My two trusted economists, Paul Krugman and Ravi Batra, are at opposite poles on the future of the US economy. Krugman says it looks like the recession is over. Batra says the S&P will take another nosedive this summer and not really come back for at least a year.

What should I do with my equities?

Look for the one who uses the least qualifiers (may, should, might, if...) and the most verifiable facts in the discussion of their opinion.

Chrysler and GM are bankrupt, closing hundreds/thousands of dealers and shutting down factories laying off thousands/millions of workers. More jobs are vanishing than being created. Does this look like green shoots, or weeds.

There is something like $1.2 quadrillion derivatives with just $20 trillion market value. These have yet to unwind.

From reading elsewhere, expect a total market meltdown. Maybe in a few weeks, or a few months.

Plan accordingly.



Edit for these statistics

According to the Bank for International Settlements, the total outstanding derivatives notional amount is $684 trillion (as of June 2008)<2> with a gross market value of $20 trillion.
http://tinyurl.com/ykt7q5

I have read estimates that the derivatives market, globally, now could be 800 trillion to 1200 trillion, that's 1.2 quadrillion!

To put these large numbers into perspective, the world GDP is 60 trillion and the GDP of the United States is 14 trillion.
http://tinyurl.com/y2pn7u

According to CNN's bailout tracker, the United States has committed over $10 trillion of our taxpayer money for bailouts. While this is a huge amount to keep our economy, it is not enough to keep the derivative markets from eventually bursting.
http://tinyurl.com/cncuyf

During a Mercury retrograde.

Mercury retrograde means that you have misleading indicators - probably in this case the fact that the people trading on Wall Street need to keep their jobs and show their bosses they can move money around.

Once Mercury goes direct, then you have to start worrying about how long or short term whatever resource you had during the retrograde would involve. (It went direct on May 31st)

I don't see any long term reasons to believe that further optimism should be looked for. But maybe there is a way to keep Wall Street propped up/inflated with commodities trading?

(One of my principle reasons for fooling around with astrology is over the past twenty five years, the Mercury retrogrades always end up being as the classic astrologer would describe them. What comes to me and looks great during the three weeks of retrograde usually ends up being very different when that planet changes and goes direct.)

Those seem to be the only days things go well and I accomplish anything.

NEW YORK, June 9 - U.S. commercial real estate mortgage servicers are seeking to extend maturing loans for up to five years in a bid to prevent borrowers from defaulting and giving up office, retail and apartment buildings at distressed levels, an industry executive said on Tuesday.

The moves by special servicers, which oversee mortgages in or near default, would sharply increase the maturity of the loans from the six- to 12-month extensions commonly negotiated today, John D'Amico, a senior managing director at Centerline Capital Group, told Reuters after a panel hosted by the Commercial Mortgage Securities Association in New York.

Modifying loans has consumed the $700 billion market for commercial mortgage securities this year. Frozen credit markets have limited refinancings for maturing loans in commercial mortgage-backed securities, resulting in a wave of defaults and exacerbating the impact of the U.S. economic recession.

Loans coming due in CMBS will grow to $42 billion in 2010 and $69 billion in 2011, from $15 billion this year, according to Credit Suisse.

The urgency has also risen since the fourth quarter of 2008 as special servicers have taken on hundreds of new loans due to default or a reduction in cash flow that may presage a default. The balance of troubled commercial real estate loans soared 48 percent last quarter to $23.7 billion, and will surely grow due to the April bankruptcy filing by No. 2 U.S. mall owner General Growth Properties Inc., according to Fitch Ratings.

FIGHTING FOR TIME

The loan "workout" process has often turned "nasty" as servicers try to hammer out terms agreeable to a variety of borrowers, lenders and investors that will limit losses and prevent foreclosures, a lawyer said at the CMSA conference on Monday. Among sticking points, lenders often demand borrowers put up additional equity, and the extensions add risk for CMBS investors because it delays return of their principal.

But with property prices falling and outlooks dire, parties are coming to terms with longer extensions, D'Amico said.

http://news.alibaba.com/article/detail/markets/100115927-1-us-commercial-loan-servicers-seek.html

since Dec. 31st 2008? Perhaps you could also post a graph of these indexes?

Thanks.