STOCK MARKET WATCH, Monday June 29

Source: du

STOCK MARKET WATCH, Monday June 29, 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 26, 2009

Dow... 8,438.39 -34.01 (-0.40%)
Nasdaq... 1,838.22 +8.68 (+0.47%)
S&P 500... 918.90 -1.36 (-0.15%)
Gold future... 941.00 +1.50 (+0.16%)
10-Yr Bond... 3.54 0.00 (-0.06%)
30-Year Bond 4.33 0.00 (-0.05%)

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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

Tuning In the Volume
BY BRIAN PRETTI

So, we find ourselves fast approaching the end of quite the eventful quarter for the financial markets, no? The markets have clearly discounted the fact that the world is not about to come to an end by any means. But it seems that as we look into the third quarter now the hard work begins. There is an old saying in the markets when contemplating the end of a bear that is transitioning to a new bull market. First comes price, then comes optimism, and then come earnings. As you know full well, given action and investor behavior in 2Q, we now have the price and the optimism. The hard part will be the earnings. Quarter end institutional antics are what they are. We went into this quarter with a lot of institutional investors meaningfully underweight risk assets. And it has been these very higher risk assets/sectors that have led the performance derby charge in 2Q. But the reality of current earnings and forward guidance lies dead ahead in the next three to four weeks. Of course we will have plenty of “beat the estimates” cheering going on, but it will be especially important to watch how the markets react to the earnings. As always, the key tell is not the news, but how the markets react to the news. Stay tuned as we do not have long at all to find out exactly how this will unfold.

But another key issue concerning market health has been on my mind for a good month or so now and that is the character and fingerprints of volume, or should I say lack of volume follow through. So what does life look like as we move into the second half of the year? Let’s have a look.

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

Ain't gonna happen.

SINGAPORE – Oil prices hovered above $69 a barrel Monday in Asia as traders look to macroeconomic indicators this week for signs of improvement in the U.S. economy.

Benchmark crude for August delivery rose 23 cents to $69.39 a barrel by late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. On Friday, it fell $1.07 to settle at $69.16.

....

Investors will be eyeing economic data this week, including the Labor Department's June unemployment report. The jobless rate hit a 25-year high of 9.4 percent in May, jumping from 8.9 percent the previous month.

....

In other Nymex trading, gasoline for July delivery fell 0.54 cent to $1.87 a gallon and heating oil dropped 0.61 cents at $1.72. Natural gas for July delivery plunged 3.0 cents to $4.08 per 1,000 cubic feet.

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

NEW YORK (Reuters) - The average price of a gallon of gasoline in the United States remained virtually unchanged from two weeks ago as crude oil prices hovered at about $70 per barrel, according to an industry analyst.

The national average for self-serve, regular unleaded gas was nearly $2.6613 a gallon on June 26, while two weeks ago it cost $2.6607, according to the nationwide Lundberg survey of gas stations.

The stability was mostly a function of oil price inertia, according to survey editor Trilby Lundberg. The price of crude oil per barrel hovered in a narrow range of about $69 to $71 in the past two weeks, Lundberg said in an interview on Sunday.

http://www.reuters.com/article/domesticNews/idUSTRE55R26T20090628

LONDON (Reuters) - Global gas demand is likely to fall for the first time in half a century this year, threatening investments in new production and a serious supply crunch from 2013, the International Energy Agency said on Monday.

"We have moved from a tight supply and demand balance with extremely high gas prices to an easing one with plummeting prices," Nobuo Tanaka, executive director of the IEA said on the day the energy adviser to 27 industrialized countries also cut sharply its mid-term forecast for oil demand.

....

Falling sales volumes and low prices have slashed producers' cash flows, while regulatory uncertainty and the credit crunch will likely further jeopardize new projects and undermine long-term energy security when economies recover, the IEA warned.

"Financing problems are likely to bedevil all new construction projects in 2009 and even into 2010," it said, adding that unless several new liquefied natural gas (LNG) projects were approved over the next 18 months there would be a severe lack of new production capacity after 2012.

http://www.reuters.com/article/reutersComService_3_MOLT/idUSTRE55S25F20090629

NEW YORK – It was a crime of epic proportions: a multibillion dollar Ponzi scheme that wiped out fortunes, drained retirement nest eggs, ruined charities and foundations, and even pushed some investors to commit suicide.

Six months after the scandal came to light, the battle lines over Bernard Madoff's punishment have been drawn. His lawyer insists 12 years in prison is enough. Prosecutors demand a 150-year sentence that would guarantee the 71-year-old spends his final days behind bars.

....

Prosecutors argued in court papers Friday that federal sentencing guidelines allow the 150-year sentence. Any lesser term, they said, should at least be the equivalent of a life sentence.

http://news.yahoo.com/s/ap/20090629/ap_on_bi_ge/us_madoff_scandal

(Reuters) – Dow Jones futures dipped 0.1 percent, S&P 500 futures were down 0.01 percent while Nasdaq futures traded 0.02 percent higher on Monday morning at 4:45 a.m. EDT, pointing to a flat opening for Wall Street's main equity indexes.

With corporate earnings and economic data calendars virtually void of potentially market-moving events, the focus will be on the sentencing of confessed swindler Bernard Madoff.

At a court hearing due to begin at 10 a.m. EDT, U.S. District Judge Denny Chin is expected by legal observers to sentence Madoff, 71, to an effective life term in prison.

http://news.yahoo.com/s/nm/20090629/bs_nm/us_markets_stocks

Bernie Madoff's sentencing is going to move the markets?

How this event could move the markets is another link in the chain showing just how irrational the markets are.

If he gets 12 years then the Bulls are firmly in control. Life plus 30, and the Bears will be calling the shots for the foreseeable future :wtf: geez

He easily would face at least ten and up to thirty years. And then, he probably would have stolen around a couple hundred bucks.

Just as reliable and solves the sentencing issue at same time.

edited: clarity

The government probably employs necromancers.

(Down a bit for today after being down a lot for the day before. I like it. FICA can do what it wants.)

= Held by the Public + Intragovernmental(FICA)
= 7,090,100,564,668.36 + 4,273,413,799,696.85
DOWN 2,856,149,844.34 + UP 717,574,353.22

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 306,731,942 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 $37,047.05.
A family of three owes $111,141.16. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 34 days.
The average for the last 23 reports is 2,688,627,718.97.
The average for the last 30 days would be 2,061,281,251.21.
The average for the last 34 days would be 1,818,777,574.60.
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$/day.
There were 107 reports in 156 days of Obama's part of FY2009 averaging -0.67B$ per report, -0.38B$/day so far.
There were 182 reports in 268 days of FY2009 averaging 7.36B$ per report, 5.00B$/day.

PROJECTION:
There are 1,305 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 17.9T$.
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)
06/25/2009 11,363,514,364,365.21 BHO (UP 736,637,315,452.13 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: 1,338,789,467,452.80 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
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 ------------*******
06/10/2009 +000,124,232,779.18 ------------********
06/11/2009 +000,484,710,305.16 ------------********
06/12/2009 +000,342,814,514.03 ------------********
06/15/2009 +022,279,783,785.91 ------------********** Mon
06/16/2009 +000,300,303,919.12 ------------********
06/17/2009 -000,017,732,893.60 ----
06/18/2009 -005,859,665,194.24 --
06/19/2009 -000,316,361,675.40 ---
06/22/2009 +000,024,707,752.58 ------------******* Mon
06/23/2009 +000,354,103,704.29 ------------********
06/24/2009 -034,732,231,983.69 -
06/25/2009 -002,856,149,844.34 --

-20,056,924,040.30 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,698,882,561,106.14 in last 280 days.
That's 1,699B$ in 280 days.
More than any year ever, including last year, and it's 167% of that highest year ever only in 280 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 280 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=3940385&mesg_id=3940423

(Debt up a bit for today after being down a bit for yesterday after a lot down for the day before yesterday. Just fine. FICA can do what it wants.)

= Held by the Public + Intragovernmental(FICA)
= 7,090,436,316,081.58 + 4,272,044,101,311.77
UP 335,751,413.22 + DOWN 1,369,698,385.08

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 306,739,142 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 $37,042.81.
A family of three owes $111,128.44. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 2,473,301,182.33.
The average for the last 30 days would be 1,896,197,573.12.
The average for the last 31 days would be 1,835,029,909.47.
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$/day.
There were 108 reports in 157 days of Obama's part of FY2009 averaging -0.72B$ per report, -0.41B$/day so far.
There were 183 reports in 269 days of FY2009 averaging 7.31B$ per report, 4.97B$/day.

PROJECTION:
There are 1,304 days remaining in this Obama 1st term.
By that time the debt could be between 13.2 and 17.8T$.
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)
06/26/2009 11,362,480,417,393.35 BHO (UP 735,603,368,480.27 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: 1,337,755,520,480.90 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
06/08/2009 +000,015,040,049.19 ------------******* Mon
06/09/2009 +000,025,670,087.48 ------------*******
06/10/2009 +000,124,232,779.18 ------------********
06/11/2009 +000,484,710,305.16 ------------********
06/12/2009 +000,342,814,514.03 ------------********
06/15/2009 +022,279,783,785.91 ------------********** Mon
06/16/2009 +000,300,303,919.12 ------------********
06/17/2009 -000,017,732,893.60 ----
06/18/2009 -005,859,665,194.24 --
06/19/2009 -000,316,361,675.40 ---
06/22/2009 +000,024,707,752.58 ------------******* Mon
06/23/2009 +000,354,103,704.29 ------------********
06/24/2009 -034,732,231,983.69 -
06/25/2009 -002,856,149,844.34 --
06/26/2009 +000,335,751,413.22 ------------********

-19,495,023,281.11 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008.
US borrowed $1,697,848,614,134.28 in last 281 days.
That's 1,698B$ in 281 days.
More than any year ever, including last year, and it's 167% of that highest year ever only in 281 days.
And it is over 100% of ANY dismal Bush, for any dismal Bush-year, ONLY IN 281 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=3944065&mesg_id=3944074

TOKYO – Japan's industrial output rose for the third straight month in May, the government said Monday, as manufacturers encouraged by signs of improving demand rushed to replenish inventories.

Industrial production in the world's second-biggest economy increased 5.9 percent from the previous month, matching a rise in April that marked the biggest jump since March 1953. Output continued to fall from a year earlier though the rate of decline eased.

The figures add to evidence that Japanese companies are springing back to life after an unprecedented plunge in global demand dragged the country into its steepest recession since World War II. Massive government stimulus spending around the world, particularly in China, is helping fuel sales of cars, equipment and machinery.

....

Much of the recent growth has been driven by manufacturers rebuilding depleted stockpiles. But a slowdown looks likely as this catalyst fades, said Chiwoong Lee, an economist at Goldman Sachs in Tokyo.

http://news.yahoo.com/s/ap/20090629/ap_on_bi_ge/as_japan_economy

---

Any uptick in production is not surprising when one considers the thrashing Japan has received over the past two years. Industrial production, as regularly reported, has fallen off a cliff to the greatest extents since the end of World War Two.

June 25 (Bloomberg) -- Wall Street’s largest trade group has started a campaign to counter the “populist” backlash against bankers, enlisting two former aides to Treasury Secretary Henry Paulson to spearhead the effort.

In memos of confidential meetings with top financial executives, the Securities Industry and Financial Markets Association said it began this month the “execution phase” of the operation, which pledges to “embrace change” and accountability. The plan targets policy makers and the media in New York, London, Washington and Brussels and calls for a “city-by-city, grass roots” approach.

The securities industry “must be perceived as part of the solution, which will allow it to better defend against populist overreaction,” the documents, prepared for a June 17 meeting of SIFMA’s board, said.

....

The internal papers call for using regional securities firms, many of which have escaped notoriety in the financial crisis, to push the industry’s message with their local members of Congress. The plan notes that brokers across the country can also be used.

....

SIFMA represents about 600 securities firms, brokerages and asset-management companies. It counts among its members the biggest U.S. banks, including Goldman Sachs Group Inc., Citigroup Inc. and JPMorgan Chase & Co., which have received capital injections from the $700 billion Troubled Asset Relief Program. Bloomberg Tradebook, a broker-dealer subsidiary of Bloomberg News’s parent Bloomberg LP, also belongs.

http://www.bloomberg.com/apps/news?pid=20601109&sid=ag9sosR7ZW3g

They did a lot of real public relations, not just lip service, after the S&L crisis--haven't done squat on this one. Of course, it's not over and nobody's gone to jail yet, either.

Why would a firm that presumably stayed clean during this mess want to stink from their shit?

Since they are paying
GOPer Brunswick group $70,000 a month
GOPer BKSH & Associates $10,000 a month
Dem Brilliant Corners $5,000 a month

it figures they are relying more heavily on GOPers.


They want to push back against the populists but they hire more GOPers than Dems? Do any of these people even know what will win a populist's hearts and minds?

They couldn't be THAT deaf, dumb and blind. Could they?

from Naked Capitalism:


Ozy here: This makes me wonder if this could be a reason why China has refused to allow the Yuan to float.

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

Last trade 79.903 Change -0.037 (-0.05%)

US Dollar Surges as China Backtracks on 'Super-Sovereign Currency' Comments

http://www.dailyfx.com/story/special_report/special_reports/US_Dollar_Surges_as_China_1246249122229.html



The US Dollar surged in overnight trading after China’s central bank chief Zhou Xiaochuan said his country’s foreign exchange reserve policy is “quite stable”, alluding to the fact that the world’s largest holder of US Treasuries will not be diversifying away from the greenback for the time being. China’s call for a ‘super-sovereign’ currency weighed on USD last week. The Euro tested as low as 1.4002 while the British Pound touched 1.6450 ahead of the opening bell in Europe.

...more...

US Dollar Eyes Breakout versus Euro on Nonfarm Payrolls Results

http://www.dailyfx.com/story/currency/eur_fundamentals/US_Dollar_Eyes_Breakout_versus_1246062887887.html

The US Dollar finished the week modestly lower against key counterparts, and an end-of-week dollar decline suggests that very short-term momentum favors further losses. Yet markets remain extraordinarily indecisive, and the lack of extended moves in the US dollar has left Euro/US Dollar and British Pound/US Dollar pairs in especially narrow ranges. A busy US economic calendar in the week ahead nonetheless promises potential fundamental impetus for major breakouts. Highly market-moving US Non Farm Payrolls numbers and other key economic releases could finally clarify economic outlook and establish much-needed direction in US dollar trading.

The infamous US Nonfarm Payrolls reports promises fireworks across US Dollar currency pairs, but earlier-week economic event risk could just as easily set the tone for the USD after several weeks of lackluster price action. First on the ledger, Tuesday’s Conference Board Consumer Confidence numbers are expected to show a modest improvement in domestic sentiment through the month of June. The survey’s headline index has improved dramatically after setting record-lows through February, but the number nonetheless suggests that consumers remain especially pessimistic on sizeable job losses and incredible wealth destruction. The question remains: is the worst of the economic crisis now over? The sharp turnaround in Consumer Confidence suggests the worst may be past us, but improving optimism has not resulted in increased spending—thereby having a limited effect on the US economy. Any further improvements in the Conference Board figures would be encouraging, but we will need higher confidence numbers to translate into increased consumption to truly claim that the worst of the recession is now over.

Next on the ledger, markets will watch for noteworthy results out of Wednesday’s ISM Manufacturing results. The ISM report will shed light on conditions in domestic industry, and it will be important to watch for continued signs of improvement in domestic demand. The survey’s New Orders and Production indices plummeted to record-lows through the end of 2008, but steady improvements actually left the New Orders index in positive territory for the first time since October, 2007 through May’s survey data. The encouraging signs certainly boosted outlook for domestic demand. Yet it remains key to watch for continued improvement to cement the case for a sustained turnaround in production. Given that the US Nonfarm payrolls report will be released the very next day, markets will likewise pay close attention to any noteworthy shifts in the ISM Manufacturing Employment index.

Last but most certainly not least, the Bureau of Labor Statistics will publish official estimates for job destruction/creation in the US economy in Thursday’s Nonfarm Payrolls report. The US economy has shed an incredible 7.0 million jobs since December, 2007, and forecasts call for a further 350,000 job losses through June. A much smaller-than-expected decline in May boosted market outlook for the US economy, but the data only tells us that the rate of job losses slowed—not that employment actually improved. To really boost the odds of economic recovery, NFP data will need to show much more dramatic improvements. Any signs of deterioration could just as easily dash hopes that the worst of the recession is now past.

Risky asset classes remain in a fragile state, and we continue to claim that the S&P 500 topped through the month of June. If risk sentiment takes a sharp turn for the worse, we could finally see the US Dollar make a sustained breakout against major counterparts. A busy economic calendar could prove to be the catalyst for a sustained turn, and it will be critical to watch financial markets in days ahead.



...more...

http://www.reuters.com/article/businessNews/idUSTRE55Q20K20090627?feedType=RSS&feedName=businessNews

CHICAGO (Reuters) - Too many regulators will only increase costs and reduce credit opportunities for consumers, JPMorgan Chase & Co Chief Executive Jamie Dimon warned in a column he wrote in Saturday's Wall Street Journal.

While praising President Barack Obama's efforts to reform the U.S. financial system, Dimon said the emphasis should be on strengthening existing regulators over creating new ones.

"Any regulatory overhaul should ensure that governmental oversight of the financial system is efficient," wrote Dimon, who is widely regarded as the top banker to have been least tarnished by the financial crisis. "We should avoid the temptation to have multiple regulators just for the sake of having them.

"Three or four different regulators all looking at (and fighting over) the same issue is not a wise use of taxpayer money," he said. "Companies can't operate that way. Neither should the government."

Obama last week unveiled a sweeping package of reforms to rewrite the rules for banks and capital markets in response to a severe financial crisis that has dragged down economies worldwide for more than a year.

...more...

when pigs fly

Why not triple the amount of individuals who scrutinize the bidness dealings of these major resource-sucking banks; streamline the oversight process so that oversight agencies will not constantly engage in turf wars; and, finally, strengthen the laws (i.e. reinstate Glass-Steagall) that govern banking so as to remove any reason for Jamie Dimon ever to pen a whiny column in defense of recklessness ever again.

and when pigs fly, we call them pigeons!

From Calculated Risk:


This puts three-pronged scrutiny on Geithner's assertion that these banks "legacy" assets are merely misunderstood. This, of course, hints at their hidden, unrealized and honest-to-goodness value that's indeed much greater than a seven ounce mound of cat feces. I look forward to reading these reports for the additional scrutiny on Geithner's dog-n-pony show stress tests that were of equivalent value as the aforementioned cat by-product.

Of greater concern: this reports and its subsequent analysis will place in the open everything we knew to be true before and after the Spin Tests: the banks are still crippled and, as CR says, should have been nationalized a long time ago.

Some really good points here:


Good stuff can be found here. Here's the link.

S&P 500 +2.80 916.70 6/29 9:03am

NASDAQ +3.75 1480.50 6/29 9:03am

Dow Jones +25.00 8398.00 6/29 8:50am

http://money.cnn.com/data/premarket/index.html

9:51
Dow 8,438.84 Up 0.45 (0.01%)
Nasdaq 1,830.88 Down 7.34 (0.40%)
S&P 500 917.37 Down 1.53 (0.17%)
10-Yr Bond 3.469% Down 0.037
NYSE Volume 480,735,312.5
Nasdaq Volume 235,540,500

09:45 am : The stock market is oscillating in the first few minutes of trading. The gyrations have taken stocks off of their initial gains and momentarily into the red.

Health care stocks have failed to recover. The sector is down 1.0% as health care tech, health care equipment, and managed health care companies all move markedly lower. Their weakness comes amid ongoing efforts to reform health care, which has often been an unsuccessful endeavor in past years.

Meanwhile, energy stocks are sporting a solid 1.0% gain. Their gain comes as oil prices extend an early advance to trade with a 2.2% gain near $70.65 per barrel.DJ30 +20.86 NASDAQ +0.07 SP500 +1.24 NASDAQ Adv/Vol/Dec 918/190 mln/1327 NYSE Adv/Vol/Dec 1296/79 mln/1287

09:15 am : S&P futures vs fair value: +2.30. Nasdaq futures vs fair value: +0.50. This morning's modestly positive bias has held steady so that stocks continue to look as if they will start the session slightly higher. The uptick comes despite a lack of positive catalysts or market-moving headlines and follows several choppy, thinly traded sessions last week. Last week's trading volume didn't pick up until the annual reconstitution of the Russell Indices and some end-of-quarter window dressing drove trading volume in the NYSE above 2 billion shares on Friday. Continued window dressing could drive volume during the next two sessions. That could be offset later in the week as participants ready themselves for the long, holiday weekend, though there will be plenty of data released later this week to keep up involvement.

Look at that S car Go! (punchline to a joke I cannot remember completely)(any help greatly appreciated).

Eddie Murphy in "Trading Places" appropriately.

Bastards.

http://robertreich.blogspot.com/2009/06/great-debt-scare-why-has-it-returned.html


It’s the kind of thing I expect to hear from deficit hawks and chicken littles -- from the self-described "fiscally responsible" right, from the scolds Ross Perot and Pete Peterson, from my former cabinet colleague Bob Rubin. But yesterday I was shown slides developed by the putatively liberal Center for American Progress intended to make the point. And today’s front page story in the New York Times, by the eminent David Leonhardt, entitled "Sea of Red Ink: How It Spread From A Puddle," puts the issue right before our progressive noses, so to speak.

The Great Debt Scare is back.

Odd that it would return right now, when the economy is still mired in the worst depression since the Great one. After all, consumers are still deep in debt and incapable of buying. Unemployment continues to soar. Businesses still are not purchasing or investing, for lack of customers. Exports are still dead, because much of the global economy continues to shrink. So the purchaser of last resort -- the government -- has to create larger deficits if the economy is to get anywhere near full capacity, and start to grow again.

Odder still that the Debt Scare returns at the precise moment that bills are emerging from Congress on universal health care, which, by almost everyone’s reckoning, will not increase the long-term debt one bit because universal health care has to be paid for in the budget. In fact, universal health care will reduce the deficit and cumulative debt -- especially if it includes a public option capable of negotiating lower costs from drug makers, doctors, and insurers, and thereby reducing the future costs of Medicare and Medicaid.

Even odder that the Debt Scare rears its frightening head just as the President’s stimulus is moving into high gear with more spending on infrastructure. Every expert who has looked closely at the nation’s crumbling infrastructure knows how badly it suffers from decades of deferred maintenance -- bridges collapsing, water pipes bursting, sewers backed up, highways impassable, public transit in disrepair. The stimulus, along with the President’s long-term budget, also focus on the nation’s schools, as well as America’s capacity to reduce emissions of greenhouse gases. These public investments are as important to the nation’s future as are private investments.

First, some background: Deficit and debt numbers mean nothing in and of themselves. They take on meaning only in relation to something else. And the most important something else, in terms of deciding whether the nation can afford such deficits or debts, is the size of the national economy.

Pay close attention, in particular, to the debt/GDP ratio. True, that ratio is heading in the wrong direction right now. It may reach 70 percent by the end of 2010. That’s high, but it’s not high compared to the 120 percent it was in 1946, after the ravages of Depression and war.

Over time, the basic way America has reduced the debt/GDP ratio is by growing the U.S. economy. GDP growth makes even large debts manageable. When the economy is cooking, more people have jobs and better wages. So they pay more taxes. And they require less unemployment assistance and other social insurance. That’s why it’s so important now, in the depths of depression, that government, as purchaser of last resort, steps in and runs large deficits. Without large deficits this year and next, and perhaps the year after, the economy doesn’t have a prayer of getting back on a growth path, and the debt/GDP ratio could really get ugly.

That growth path, by the way, will be faster and stronger if the nation invests in our infrastructure, our schools, and our environment -- which is exactly what Obama aims to do. In this respect, national budgets are like family budgets. It’s dumb for an indebted family to borrow more money to take a world cruise. But it’s smart even for an indebted family to borrow money to send their kids to college. So too with the Obama budget. Public investments, just like family investments, build future wealth. They allow faster growth. They make the debt/GDP ratio even lower and more manageable over time.

Don't get me wrong. I'm not saying there's nothing to worry about when it comes to long-term deficit and debt projections. I'm just saying now's not the time to worry, and we ought to temper our worries by understanding the larger context.

Not every expert agrees that a deficit-driven stimulus is the best and fastest way to get the economy back on a growth track, or that public investments can speed growth. Conservative economists, Republicans, and many Wall Streeters are skeptical because they don’t think government can do anything well. But look at the record of the last seventy-five years -- look at how the nation got out of the Great Depression, and consider the critical role public investments have played since then in speeding the nation’s growth, investments such as the interstate highway system -- and you have ample evidence that the deficit hawks are wrong. They were wrong when they convinced Bill Clinton to chuck a large part of his investment agenda (the nation is now paying the price) and they're wrong now.

So, back to the mystery. Why are the ostensibly liberal Center for American Progress and New York Times participating in the Debt Scare right now? Is it possible that among the President’s top economic advisors and top ranking members the Fed are people who agree more with conservative Republicans and Wall Streeters on this issue than with the President? Is it conceivable that they are quietly encouraging the Debt Scare even in traditionally liberal precincts, in order to reduce support in the Democratic base for what Obama wants to accomplish? Hmmm.

http://www.latimes.com/business/la-fi-numonarch10-2009jun10,0,7571143.story?page=1

The St. Regis Monarch Beach, ]B]infamous as the hotel where American International Group sponsored a luxury retreat just days after accepting a federal bailout, has been scheduled for a foreclosure auction.

The companies that own the resort are in default on a $70-million loan from Citigroup Global Markets Realty Group, people knowledgeable about the debt said Tuesday.

Negotiations continue in an effort to avoid an auction, according to those sources. But unless something is worked out, the St. Regis will go on the block July 7, to be sold to the highest bidder, according to a "terms of public sale" document obtained by The Times....

...Business is so bad -- and funding so expensive -- that hardly any hotels are being sold these days, and most are now worth 50% to 80% less than at the peak, said hotel broker Alan X. Reay of Atlas Hospitality Group in Costa Mesa...


IN THE MUSICAL "ANNIE", THE FEMALE ACCOMPLICE (VILLAIN) IS NAMED 'LILY ST. REGIS, AFTER THE HOTEL'".

http://www.correntewire.com/obama_rewards_att_warrantless_surveillance_ceo_ed_whitacre_chairmanship_gm

hank gawd -- or the 11 dimensional chess player -- that FISA reform gave the telcos retroactive immunity! Because otherwise Ed Whitacre, 17-year AT&T Chairman and CEO, would be in jail -- since FISA violations were felonies, back when we had the rule of law -- instead of being tapped to run GM! Online WSJ:

The 67-year-old Mr. Whitacre is known as a straight-talking, no-nonsense executive with a track record of cutting big deals and working closely with the U.S. government , skills that could prove critical for GM as it orchestrates a massive restructuring under close scrutiny of the U.S. Treasury.

Indeed. And "working closely with the U.S. government" very profitably. Last I checked, that illegal surveillance made AT&T what? $750 a pop? Not much per unit, but those millions add up!

Of course, Whitacre was real strong on net neutrality, too. Not. So I bet the netroots are up in arms about this one, right? Not.

But let's look on the bright side! He's an old white dude who donates Republican!

UPDATE Oddly, or not, newly minted Democrat Arlen Spector -- the kind of rat who boards a sinking ship -- doesn't mention retroactive immunity at all in his new article on limiting executive power in the New York Review of Books. Editorial standards over there have fallen, haven't they? I can't imagine why.

UPDATE See, kidz, it really is possible for the econoblogs and the poliblogs to crosslink!

Another campaign promise kept.
Hooray.

I just discovered that the quotes I was going to mention from SavetheInternet.com are fake (intended to be humorous).

GE’s (GE) CEO Jeff Immelt wants the US to focus on rebuilding its manufacturing economy in the hope of expanding the American export base. The notion is laudable, but financially impossible.



According toReuters, “The U.S. should work to have manufacturing represent about 20 percent of employment, more than double its current level, he said.” Immelt believes that revenue for the financial services industry will not be adequate over the long term to drive a permanent revival of national fortunes and that consumer spending will also not make a large enough contribution to future GDP growth.

Immelt is right, but his solutions are not possible. The economy may not advance beyond a 1% or 2% GDP growth for the next several years. Unemployment at 10% or better, especially for any prolonged period, will make a rebound in consumer activity nearly impossible.

The trouble with rebuilding the American industrial base is simple. It would be unimaginably expensive. The Administration’s stimulus package only devotes about 10% of its spending to true infrastructure building. The is a modest amount of at $787 billion package. It will help rebuild a portion of the nation’s roads, schools, broadband and energy grid systems, but that does nearly nothing to re-create the factories and assembly lines which once produced goods for the US and the world. Those facilities are now in places like Mexico and China.

To give an idea of the order of magnitude of the costs of erecting new production facilities, Chinese investors will spend as much as$6.5 billion to create a hybrid electric car plant that will eventually employ 25,000 people in Tennessee. Converting America back to a manufacturing economy that could be a net exporter of goods would cost in the trillions of dollars. This would have to be done during a period when the national budget is already remarkably stretched and large corporations are unlikely to make massive capital expenditure. It would have to be done with a large decrease in the cost of US labor, which would undermine consumer spending by cutting American wages.

US businesses and the government only have two ways to sharply improve GDP. The first is to rebuild the financial services industry as quickly as possible. . . .The other sector that has been a huge engine of economic growth in the American economy is technology, even though much of the hardware for the industry is built overseas.

http://247wallst.com/2009/06/27/ges-ge-flawed-vision-of-the-new-economy/#more-39225

So unless our derivatives based financial system is restored, the US's GDP is toast.

It can and must be done, and not on the backs of consumers.

It starts with tariffs and seed money. Microloans to build up what still exists, to drive out the exports. Small hand-crafts: clothing, furniture, shoes. Pretend we are a third-world country (only it isn't pretending) and go from there. Small scale plastics. Did you know that the plastic bag around your morning paper comes from China? How can they compete? Because nobody here makes them at all anymore, most likely. Of course, with the newspapers dying, so will that item of import, but there are others that will not go away that could start up with just one machine. And build a business out of PROFITS not loans.

continuing with the GE story....


6/29/09 Government Bails Out General Electric

"But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE...Public records show that GE Capital, the company's massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government's actions have been "powerful and helpful" to the company."

That fact that public money is being used to support General Electric, through their GE Credit group which chartered two small Utah banks raises several issues.

When people argue for state sovereignty in issues like banking and credit cards this is of course appealing to states rights people like this blogger. But when those regulations cross over the lines of interstate commerce and federal funds, the answer should always be 'no' as it merely opens the door to regulatory manipulation and state corruption. The experience with credit card debt limits and state regulation has been a blot on the regulatory landscape for many years.

There is nothing wrong with GE owning a financing operation. There was and needs to be the appropriate regulation of it, and that should include the ability to fail and take down part of General Electric shareholder value.

This 'behind the scenes' and 'under the table' decision-making has become far too common in Washington.

The banks must be restrained, and balance restored to the system, before there can be a sustained economic recovery.

http://jessescrossroadscafe.blogspot.com/2009/06/government-bails-out-general-electric.html


6/29/09 Washington Post
How a Loophole Benefits GE in Bank Rescue
Industrial Giant Becomes Top Recipient in Debt-Guarantee Program
By Jeff Gerth and Brady Dennis

General Electric, the world's largest industrial company, has quietly become the biggest beneficiary of one of the government's key rescue programs for banks.

At the same time, GE has avoided many of the restrictions facing other financial giants getting help from the government.

The company did not initially qualify for the program, under which the government sought to unfreeze credit markets by guaranteeing debt sold by banking firms. But regulators soon loosened the eligibility requirements, in part because of behind-the-scenes appeals from GE.

As a result, GE has joined major banks collectively saving billions of dollars by raising money for their operations at lower interest rates. Public records show that GE Capital, the company's massive financing arm, has issued nearly a quarter of the $340 billion in debt backed by the program, which is known as the Temporary Liquidity Guarantee Program, or TLGP. The government's actions have been "powerful and helpful" to the company, GE chief executive Jeffrey Immelt acknowledged in December.

GE's finance arm is not classified as a bank. Rather, it worked its way into the rescue program by owning two relatively small Utah banking institutions, illustrating how the loopholes in the U.S. regulatory system are manifest in the government's historic intervention in the financial crisis.

more...
http://www.washingtonpost.com/wp-dyn/content/article/2009/06/28/AR2009062802955.html?hpid=topnews

100% corruption.

GRAND RAPIDS -- Harvey Gainey and others flying on business for the bankrupt trucking giant Gainey Corp. will be sitting in coach.

"Not first class, not business class," U.S. Bankruptcy Judge James Gregg said in a verbal ruling on Monday. "You'll travel like most of the rest of us do."

The ruling was in response to complaints by Gainey Corp. creditors that company officials did not comply with a letter of agreement signed in January governing when and how charter flights can be used versus commercial air.

Company officials chartered a Lear jet through Gainey Aircraft Corp. on six occasions between Jan. 23 and April 7 of this year, according to court proceedings, with a cost totaling more than $105,000.

Gregg said they failed to provide documentation showing a charter flight was justified for those trips.

http://www.mlive.com/news/grand-rapids/index.ssf/2009/06/bankruptcy_judge_rules_harvey.html

Too bad Gainey Corp didn't get its funding from the government who never asks its debtors to rein in their excess.

Do you think it's only a fluke, or the shape of things to come?

it is almost SOP for them to require company execs to stop spending the cash. This is the first time I've seen where the execs didn't heed the banksters orders.

Which is why it makes it so maddening that the banksters didn't allow the feds to put restrictions on them during their bailouts.

the Department of Justice today released its ruling on Continental and United's petition for complete Antitrust Immunity on all international routes the two carrier serve, which would allow the two carriers to more closely coordinate sales, marketing and pricing. . . Today's ruling denied the joint application on the basis of its limitation and, in some cases, elimination of competition on international routes

http://www.examiner.com/x-15043-Austin-International-Travel-Examiner~y2009m6d29-Department-of-Justice-denies-ContinentalUnited-ATI-request-citing-monopoly-of-USChina-air-routes

by Christmas.....

June 29 (Bloomberg) -- Investors are moving in lockstep like never before, driving up stocks, commodities and emerging markets and risking a replay of last year, when they all plunged the most since World War II.

The Standard & Poor’s 500 Index, whose increase in the past three months was the steepest in seven decades, is rallying in tandem with benchmark measures for raw materials, developing- country equities and hedge funds. The so-called correlation coefficient that measures how closely markets rise and fall together has reached the highest levels ever, according to data compiled by Bloomberg.

The herd mentality threatens to leave investors with no refuge amid signs that the worst U.S. recession since 1958 isn’t abating. While bulls say it makes sense that markets climb together after the S&P 500, copper and oil lost more than 38 percent in 2008, RiverSource Investments LLC and Harris Private Bank are telling clients that diversification strategies to smooth out returns won’t work. They suggest shifting money to cash and bonds on concern gains will evaporate.

“If everything’s moving in the same direction, you can’t build a portfolio that has varying degrees of risk,” said David Joy, chief market strategist at RiverSource, which manages $125 billion in Minneapolis. “If we don’t start to see tangible evidence of economic improvement, there’s enough tentativeness among investors that they may be quick to retreat.”

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

Hard to believe this was on Bloomberg's site.

wow, that is amazing
********************



Harry Markowitz, 81, who won the Nobel Prize for economics in 1990 for his work on portfolio theory, says that last year’s collapse reinforces his view that even the most unlikely outcomes are possible in any year.

‘Thundering Herd’

“The thundering herd is still with us,” said Markowitz, a professor of finance at the Rady School of Management at the University of California, San Diego. “Nature draws into a bushel basket full of returns and finds a next return every year, and I believe there’s another 1929 somewhere in that bushel basket. 2008 was not a refutation, it was a confirmation.”
more...
http://www.bloomberg.com/apps/news?pid=20601103&sid=aSSzKSJaiuGM

edit: the article has been pulled, maybe it's there again.

:shrug:

I read it earlier. It's still missing.

Look at the opening drop on our futures chart. Is that a correlation?

sometimes the article is there, and sometimes not.

maybe it is in my system cache?

The article is back up. Does this latest version closely resemble the original? It seems like the author has tried to balance out the optimist vs. pessimist views. However, I'll use the data from the article to solidify my view that the markets are going to crash soon in July.

Last Updated: June 29, 2009 16:11 EDT

Personally, I think July is still a bit soon for a market crash, I'm guessing it will be October, like the other major market crashes.

echoes these sentiments. It really is stunning how varying degrees of quality, from gristle to prime rib, have moved in concert.

Healthcare suffers these days. That's understandable with the Pubic Option so hot. But banks? But the biggest of the big? The same who have received bailout funds? They should be trading for pennies, if anything.

True - it is odd to find this at Bloomberg. For that matter - to find this at any high profile finance website certainly is worthy of attention.

over the web by many others in the last couple of weeks. And as always you savvy SMWers have known what's been happening and have been letting us know about it in almost every daily thread.

But Bloomberg letting the general public in on the story was news I thought. It also got me wondering why they were doing so. Hmmmm.

http://www.youtube.com/watch?v=akVL7QY0S8A

The Coming Collapse Of The Middle Class (video 57:37)
Distinguished law scholar Elizabeth Warren teaches contract law,
bankruptcy, and commercial law at Harvard Law School.
She is an outspoken critic of America's credit economy,
which she has linked to the continuing rise
in bankruptcy among the middle-class.

Where ignorance is bliss, I'm not sure I wanted to know this, although I was well aware of parts of it. It's gonna be a French Revolution, folks. Nothing less will do the job.

Elizabeth Warren speaks well, keeps your attention, and has very good charts and graphs to back up. Wasn't that amazing what people spend less on from 30 years ago, compared to today. They spend less on clothing, food and appliances. So what do they spend more on today than 30 years ago? Housing, health insurance and child care.