STOCK MARKET WATCH, Friday August 14

[ozymandius]

Source: du

STOCK MARKET WATCH, Friday August 14, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials In Prison = 4

AT THE CLOSING BELL ON August 13, 2009

Dow... 9,398.19 +36.58 (+0.39%)
Nasdaq... 2,009.35 +10.63 (+0.53%)
S&P 500... 1,012.73 +6.92 (+0.69%)
Gold future... 956.50 +4.00 (+0.42%)
10-Yr Bond... 3.60 0.00 (0.00%)
30-Year Bond 4.43 -0.11 (-2.38%)

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

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie, Silver and US$

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This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. a slight change to the lineup

Thanks to the other one's request, we now have a US$ index chart on the main page. Additional props to UpInArms for providing the link.

:hi:

[DemReadingDU]

18. Great, thanks! n/t

[ozymandius]

2. Market Observation

Retail Sales and Frugal Shoppers, Two Peas in Same Pod
BY MIKE SHEDLOCK

In the face of mounting job losses with the only real demand coming from cash for clunkers and other silly stimulus programs doomed to fail, it should not be surprising to anyone for retail sales to drop. Nonetheless, Bloomberg notes the following surprise: Sales Unexpectedly Decrease as Job Losses Mount.

Sales at U.S. retailers unexpectedly fell in July, raising the risk that consumers will keep cutting back as job losses mount and temper a recovery from the worst recession since the 1930s.

Purchases decreased 0.1 percent, the first drop in three months, as shrinking demand at department stores such as Macy’s Inc. and Wal-Mart Stores Inc. overshadowed a boost from the cash-for-clunkers automobile incentive program, Commerce Department figures showed today in Washington.

Retail sales were projected to rise 0.8 percent, according to the median estimate of 76 economists in a Bloomberg News survey.

Macy’s, the second-biggest U.S. department store chain, said yesterday it cut inventories 7.5 percent in the second quarter from a year ago as sales dropped.

Other reports today showed companies trimmed inventories in June for a 10th consecutive month, and prices of imported goods dropped in July for the first time in six months as the cost of commodities such as petroleum and chemicals decreased.

Figures from the retail sales report showed the government’s cash-for-clunkers plan did boost auto purchases, confirming industry data released earlier this month. Sales at dealerships and parts stores climbed 2.4 percent last month, the biggest gain since January.

You Can't Spend What You Don't Have

With ever tightening credit standards, and credit card companies like Chase (JPM), American Express (AXP) and Citigroup (C) slashing card limits, buyers are very mindful of costs as Pay Raises Are the Worst in 33 Years.

.....

Peas in the Deflationary Pod

Retail sales, frugal shoppers, and price slashing efforts at Wal-Mart, Safeway, Whole Foods and Giant, along with their Canadian counterparts, are all peas in the same deflationary pod.

Consumer attitudes towards spending have changed for good. So have banks' attitudes towards lending. It's tough to raise prices in this kind of environment. Deflation is alive and well in regard to consumer credit, bank lending standards, consumer attitudes, retail sales, and even store prices.

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

[Dr.Phool]

36. What a surprise!

You would think that all of these people without jobs, would have more free time on their hands to go shopping.

[ozymandius]

3. Today's Reports

08:30 Core CPI Jul
Briefing.com 0.1%
Consensus 0.1%
Prior 0.2%

08:30 CPI Jul
Briefing.com 0.0%
Consensus 0.0%
Prior 0.7%

09:15 Capacity Utilization Jul
Briefing.com 68.5%
Consensus 68.3%
Prior 68.0%

09:15 Industrial Production Jul
Briefing.com 0.5%
Consensus 0.4%
Prior -0.4%

09:55 Mich Sentiment-Prel Aug
Briefing.com 70.0
Consensus 69.0
Prior 66.0

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

[ozymandius]

19. On the Defense of Goobermental Reports

Barry Ritholtz gives great dope slap.

Defining Recessions; Mis-defining NBER

Here’s another of those articles that look so embarrassing one year later:

Can you imagine an article that insinuates that the government, not an independent academic commission, was the more objective arbiter of data? That argued we should let the pols decide when recessions start and end?

Insane, right?

Let’s go to our WTF were you thinking file:

“But what exactly is a recession? The popular definition is two consecutive quarters of economic contraction. But NBER provides a little more room for judgment with its definition of “a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real gross domestic product, real income, employment, industrial production, and wholesale-retail sales.” Justice Potter Stewart might have had more succinct wording than NBER: “I know it when I see it.”

Why not let the federal government be the arbiter of when we are in a recession? After all, the federal government collects and disseminates economic data, and by all accounts quite credibly.

WTF planet do you live on buddy? I would bet that the majority of savvy knowledgable watchers of markets and economic releases would laugh their arses off at the phrase: “by all accounts quite credibly.”

Here's a link to the original piece.

[UpInArms]

33. Consumer prices unchanged in July (after seasonal adjustments)

8:32a US July energy prices down 0.4%

8:32a US July food prices down 0.3%

8:31a US CPI down 2.1% y-o-y, largest drop since '50

8:31a US July core CPI rises 0.1%, as expected

8:31a US July CPI unchanged, as expected

http://www.marketwatch.com/story/consumer-prices-unchanged-in-july-2009-08-14

WASHINGTON (MarketWatch) -- U.S. consumer prices were unchanged in July, after seasonal adjustments, and were down 2.1% year-over-year in the sharpest annual decline since 1950, the Labor Department reported Friday. Analysts polled by MarketWatch had expected no change in the monthly consumer price index. For July, energy prices fell 0.4%, and food prices fell 0.3%, while prices rose for goods such as new vehicles, tobacco, medical care and apparel. The core CPI, which excludes often-volatile food and energy prices, rose 0.1% in July, matching analysts' expectations. Of note, shelter prices in July fell 0.2%, the largest decline since 1982, while prices for meat, poultry, fish and eggs fell 1.3%, the largest decline since 1979. In June the overall CPI rose 0.7%, while the core gained 0.2%.

[UpInArms]

42. Weird Capacity Utilization and Production report numbers:

U.S. July industrial production up 0.5%
9:15am Today

U.S. July capacity utilization rises to 68.5%
9:15am Today

U.S. July output up for first time since October
9:15am Today

U.S. July output gain due to 20% rise in vehicles
9:15am Today

U.S. July factory output up 1%, most in 3 years
9:15am Today

U.S. July output gain less than 0.7% expected
9:15am Today

[UpInArms]

43. Aug. UMich consumer sentiment falls to 63.2 - below 69.0 expectations

U.S. Aug. UMich consumer sentiment falls to 63.2
9:56am Today

U.S. Aug. UMich sentiment below 69.0 expectations
9:56am Today

[Hugin]

56. And it's down 3 from the Prior 66.0... to boot.

Those guys were predicting a high 60s? :lol: :eyes:

[ozymandius]

4. Oil rises slightly to near $71 despite weak demand

SINGAPORE – Oil prices rose slightly to near $71 Friday in Asia as investors brushed off bad U.S. economic news, betting instead the American economy, the world's largest crude consumer, will recover later this year.

Benchmark crude for September delivery was up 24 cents to $70.76 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. On Thursday, the contract added 36 cents to settle at $70.52.

.....

In other Nymex trading, gasoline for September delivery rose 1.15 cents to $2.03 a gallon and heating oil gained 0.79 cent to $1.91. Natural gas for September delivery jumped 2.9 cents to $3.37 per 1,000 cubic feet.

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

[UpInArms]

30. Oil futures up 25 cents at $70.76 a barrel

Oil futures up 25 cents at $70.76 a barrel
8:09am Today

[ozymandius]

5. Geithner Sees Good Vital Signs (Ready your rotten tomatoes!)

WASHINGTON -- U.S. Treasury Secretary Timothy Geithner said the Obama administration wouldn't allow Wall Street to return to such old habits as taking on excessive risk, and that plans to overhaul financial-market regulation were on track.

Mr. Geithner pushed back against criticism that Wall Street, which is returning to profitability, is also returning to business as usual, in an interview with The Wall Street Journal.

.....

Some banks, including those that received government bailout money, are earning record profits, increasing pay and ramping up risk. Goldman Sachs Group Inc., for instance, recently recorded its most profitable quarter ever and boosted its degree of risk-taking as measured by how much money it could lose in a single day.

.....

Still, the administration is concerned about the potential for populist anger, particularly as banks resume paying high salaries and bonuses to executives. Last week, Wells Fargo & Co. said it increased base salaries for top executives to get around government rules capping bonuses for firms receiving bailout funds.

.....

Mr. Geithner said the financial-services sector needs better oversight and tougher rules if the U.S. is to avoid a repeat of the financial crisis. He said the administration's proposed regulatory revamp would offer better protection with the Federal Reserve overseeing the country's largest financial firms, a new regulator for mortgages and credit cards, and tougher oversight of credit derivatives and hedge funds, among other things.

http://online.wsj.com/article/SB125018847622029839.html

---

Start throwing.

[florida08]

22. omg

the fed?

[Dr.Phool]

38. This coming from the same clueless moron.

He was in charge of the New York Fed during the build-up to the collapse. It happened on his watch.

I guess when most of your chickens are dead, the smart thing to do is hire more foxes.

[Demeter]

47. You Can Raise Fox for Its Fur

I'm hankering for a full-length red fox coat, myself--it suits my colors! God knows, it was cold enough last winter for same...

[tclambert]

94. Well, I wish they had started the "regulatory revamp" earlier,

but I have to agree we need it. Based on their track record so far, I expect them to find a solution that sort of works, but falls far short of the best possible solution. The "too big to fails" are making money again, not on the verge of collapse. But seems like I heard of about three better, more efficient ways to achieve that goal, right here on Stock Market Watch.

Now if the Bush administration were still in charge (shudder), or a McCain/Palin administration, I would expect them to set a lofty-sounding goal, and then completely fail at the implementation. Yet they would still hold a photo op on Wall Street in front of a big banner saying, "Economy Saved."

[Demeter]

95. It Only LOOKS Like They Are Making Money

because they don't pay for their capital loans. And every cent they steal from a sucker, er, customer, goes into keeping their CDS afloat. No, it's not good times rolling again.

[ozymandius]

6. More U.S. home sellers cutting prices: survey

NEW YORK (Reuters) – One in four U.S. homes for sale on August 1 had their prices marked down at least once since landing on the market, data compiled by real estate website Trulia.com showed on Friday.

A total of 24.4 percent of homes had their prices reduced in July, up from June's 23.6 percent. The average discount was 10 percent from the original price, or $40,173 of a median house value, Trulia.com said in its monthly price report obtained exclusively by Reuters prior to its release.

The average markdown dropped slightly from June's 10.4 percent, Trulia said.

.....

Of the luxury homes, categorized by those costing $2 million or more, 25 percent have seen a reduction, up from 24.3 percent. The average decrease for a luxury home was 14 percent off the original asking price, the data showed.

For homes listed for less than $2 million, 25 percent have seen a reduction, up from 24 percent. The deduction, however, was only 9 percent off the original asking price, the data showed.

http://news.yahoo.com/s/nm/20090814/bs_nm/us_usa_economy_housing

[ozymandius]

7. Fed orders CIT to submit capital plan

NEW YORK (Reuters) – The U.S. Federal Reserve has ordered CIT Group Inc (CIT.N), the cash-strapped corporate lender struggling to avoid bankruptcy, to submit a plan for raising capital and meeting debt obligations within 15 days.

The order from the powerful regulator comes as CIT, which on Monday again warned it may seek bankruptcy protection if debt restructuring efforts fall through, scrambles to line up new financing. CIT's shares climbed by as much as 19 percent after it announced Wednesday's order on Thursday.

.....

The lender to small and medium-sized companies has been struggling since 2007 amid spiraling loan losses caused by an ill-timed foray into subprime mortgages.

It received $2.33 billion in bank bailout money from the U.S. Treasury Department in December, but bank regulators last month rejected the 101-year-old lender's request to issue government-guaranteed debt, which would have helped CIT raise cash in still-turbulent markets.

http://news.yahoo.com/s/nm/20090813/bs_nm/us_cit_fed

[ozymandius]

8. Euro Zone's Consumer-Price Decline Accelerates

Consumer prices in the 16 countries that use the euro accelerated their decline to a fresh record low rate in July, but the earlier-than-expected return to growth in Germany and France may lead to a quicker rebound.

The European Union's official statistics agency, Eurostat, said Friday the consumer price index in the euro zone fell 0.7% on the year in July. In June the year-to-year rate fell 0.1%, the first annualized decline in the currency bloc's 10-year history.

The annual decline was greater than the 0.6% drop expected by economists surveyed by Dow Jones Newswires. The yearly CPI rate remains well below the level of around 2% growth that the European Central Bank targets in the medium term, although the ECB has said it expects consumer prices to decline for several months before beginning to increase by the end of the year.

However, unexpected news that the German and French economies may have pulled out of recession in the second quarter could lead to a readjustment of that forecast, as a return to growth in the currency bloc's two largest economies will exert upward pressure on prices.

http://online.wsj.com/article/SB125023987851631707.html?mod=googlenews_wsj

[ozymandius]

9. European shares rise in early trade; oils gain

LONDON, Aug 14 (Reuters) - European shares rose in early trade on Friday, helped by gains overnight in Asia and the United States, with energy companies among the biggest gainers as hopes of a global economic rebound remained intact.

At 0835 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.4 percent at 952.00 points.

Energy companies were among the early gainers, as crude prices CLc1 edged up towards $71 a barrel, on global economic recovery hopes.

.....

He added that weak U.S. retail sales data on Thursday could yet take its toll on the market, depending on confidence data from the University of Michigan, due at 1355 GMT.

.....

Across Europe, Britain's FTSE 100 .FTSE, Germany's DAX .GDAXI and France's CAC-40 .FCHI were up between 0.5 and 0.7 percent.

http://www.reuters.com/article/marketsNews/idUSLE31818520090814

[ozymandius]

10. Colonial Bank on 'brink of collapse'

LONDON (CNNMoney.com) -- Southern regional bank Colonial Bank is on the verge of failure, a federal judge said in granting a request made by Bank of America to freeze Colonial's assets.

U.S. District Judge Adalberto Jordan ruled Thursday in favor of Bank of America (BAC, Fortune 500), which had requested a temporary restraining order to keep Colonial from liquidating or transferring assets worth $1 billion.

.....

The lawsuit filed by Bank of America involved more than 6,000 mortgages issued by its subsidiary and held in trust by Colonial. According to the motion, Bank of America is owed more than $1 billion in assets but Colonial has failed to pay the amount owed.

Trouble has been brewing recently for Colonial, which is owned by Montgomery, Ala.-based parent Colonial BancGroup (CNB). Last month, the bank said in a statement that it had "substantial doubt about Colonial's ability to continue" due to uncertainties about its ability to increase its capital levels.

.....

Last week Colonial said it was informed by the Department of Justice that it was the target of a federal criminal investigation relating to its mortgage warehouse lending division and alleged accounting irregularities.

http://money.cnn.com/2009/08/14/news/companies/colonial/?postversion=2009081404

[Robbien]

14. This is the bank which funded Taylor Bean's fraudulent loans

The Taylor Bean which was closed down by the FHA last week for suspicion of fraud.

Ha, Colonial stiffing BAC. No honor amongst crooks I see.

[ozymandius]

16. What a great bit of info. Of course, I had to look it up.

From the WSJ:

Taylor Bean Ceases Lending

Taylor, Bean & Whitaker Mortgage Corp., one of the largest independent home-loan providers, closed its mortgage-lending operation Wednesday, an event that further consolidates an industry increasingly dominated by a few big banks.

The failure of the privately held Taylor Bean, based in Ocala, Fla., came a day after the Federal Housing Administration barred it from making loans insured by the government agency. Taylor Bean was the nation's 12th-largest home-mortgage lender for the first half of the year, and the third-largest originator of FHA loans in June, according to Inside Mortgage Finance, a trade publication.

.....

It isn't clear what prompted the FHA to suspend Taylor Bean. On Tuesday, the Department of Housing and Urban Development, which oversees the FHA, said the company had failed to submit a required financial report and to disclose "certain irregular transactions that raised concerns of fraud." Taylor Bean on Wednesday disclosed a similar suspension by Freddie Mac, the government-backed mortgage investor that has purchased a large share of Taylor Bean's production in recent years.

There is a local angle here, for me, in that all non-essential employees at an Atlanta branch lost their jobs a week ago. - ozy

[Robbien]

20. There's a big story here in this Taylor Bean/Colonial mess, I believe

Freddie Mac is in trouble over the loans. Ginnie Mae is involved in the loans. Fired employees are saying Taylor Bean's files are so bad that it is hard to even know which loans are good.

And of course MSM is so engrossed with green shoots and end of recession stories it barely mentions any of this.

[Demeter]

27. It's Like Leprosy

The contagion was hidden for so long that now pieces are falling off and the damage is permanent.

[Robbien]

68. Over at a loan broker discussion site

the conversations for the last two weeks are all about not being able to get funding for mortgages now that this warehouse lending operation is shut down.

I expect the housing numbers for August are going to be in the toilet.


They also are saying that there is only a 50-50 chance of someone else picking up this business if, and only if, the government takes over about five billion of losses incurred by Taylor Bean.

[Demeter]

72. We Had the Exact Same Problem in Oct When We Went Condo

even those who weren't underwater had a hard time getting a mortgage--there was no lending save FHA.

[Robbien]

32. An amazing story:Calif. man says his mortgage fraud helped ruin U.S. economy, victimized Taylor Bean

Earlier this year, Christopher Jared Warren posted an online confessional.

He said he had helped ruin the U.S. economy. At 26, he described how he had gotten rich off of lies, and how he and his colleagues had defrauded mortgage holders of millions. He asked for mercy.

Then Warren split. Using a fake name, he chartered a plane to Beirut, Lebanon, and a five-star resort on the Mediterranean Sea. Five days later, he tried to come back, but Canadian border patrol officers arrested him — with $70,000 in cash and 4 ounces of platinum in his cowboy boots.

When a $100 million mortgage scam involving Warren exploded weeks later in Sacramento, Calif., the federal government's indictment highlighted one wholesale mortgage lender in particular that Warren had defrauded: Taylor, Bean & Whitaker of Ocala.

<snip>

But the relationship between Taylor Bean and Warren's company, Triduanum Financial Inc., sheds light on how the system worked, or rather didn't work. The combination of a shady mortgage lender and a lack of oversight from the company that bought its loans turned into a toxic mess.

Taylor Bean relied heavily on brokers and "correspondent" lenders — like Warren's company — to originate their mortgage loans. Then, as a wholesale mortgage lender, Taylor Bean financed the loans by tapping into a line of credit with other financial institutions. Its chief source: the now deeply troubled Colonial BancGroup.

Taylor Bean dealt with many loans that banks wouldn't touch. It was one of the few lenders handling FHA loans for manufactured homes. In the first half of 2009, when many banks were tight on lending, Taylor Bean approved $17 billion in mortgage loans and was the third-largest FHA lender in the country.

Warren's seven-page essay, posted on his mortgage company's Web site, detailed his life as a mortgage "fraudster."

<snip>

Warren's last company, Triduanum Financial Inc., entered Taylor Bean's universe last October — as the financial services industry was in utter upheaval. Triduanum applied with Taylor Bean to become a correspondent lender, meaning it could fund and close mortgage loans in its own name and then sell the loans to Taylor Bean within a few days or weeks.

In a two-month period — from Nov. 26 to Jan. 27 — Taylor Bean bought 30 loans from Triduanum that were never actually closed.

Warren and a partner redirected $7 million from those loans to gold bullion dealers, a Swedish bank account, a jewelry company and rare coin dealers.

In a lawsuit against Triduanum, Taylor Bean said it was misled from the get-go. Triduanum's application was rife with omissions and lies.

But Taylor Bean didn't catch those lies and oversights before it gave the company authority to start making loans.

more . . .

http://www.tampabay.com/news/business/article1025884.ece


The guy's website where he posted his "confession" is no longer available. This site posted a complete copy of it
http://fraudtalk.blogspot.com/2009/02/california-fugitive-charged-in-100.html


At least he is now sitting in a jail cell.

[UpInArms]

34. from his "statement"

We found investors that were not re-pulling credit reports, so we would change a 500fico to a 700 fico, a person in foreclosure and make It look like they were never late, fake w2s, pay stubs, bank statements, verification of deposits, none of which was being re-verified. These investors, who were securitizing these assets as AAA rated were not even verifying anything in the files? I am sure that their investors were assured everything from correspondents was being audited. Every time a lender caught a file we would “fire” the employee produce termination paperwork to the investor, and re-hire the employee under a different alias. Over the course of the 3 years, over $810,000,000 in mortgage backed securities originated from my companies. That’s a 24 year old selling a billion dollars in bad mbs securities which by 2008 were in default without doubt.

[Demeter]

48. So THAT'S How They "Fix" Your Credit?

[FarCenter]

45. Colonial Bank is $26 Billion in assets

The FDIC is going to take quite a hit on this one.

[DemReadingDU]

69. Denninger: Colonial closing, Is FDIC still solvent?

8/14/09 One Of Three Down; Is The FDIC Still Solvent?
Karl Denninger

The FDIC usually waits until the close of business Friday; they must have had a slight problem with withdrawals......

Left unsaid is what's going to happen to the FDIC's deposit insurance fund on this one - my guess is that it will be ugly, as these guys were up to their necks in Florida on development projects that went bad. The "value" of that paper may be very close to zero; if the FDIC avoids doing one of their 40% loss deals I will be quite surprised.

A 40% loss on this one would, if my math is right, kill the rest of their insurance fund plus quite a bit and put the FDIC in the position of immediately needing to go hit up Treasury for more money.

That ought to be good for confidence, right?

Oh, there are two more on the "you're dead" list that I've been talking about for a while: CORUS and Guaranty, both of which have said they (as of last filing) have a negative Tier Capital Ratio, meaning that they are formally underwater and IMHO should have been seized months ago.

But don't worry, Treasury has an infinite credit card to keep funding the FDIC with, right?

http://market-ticker.org/archives/1335-One-Of-Three-Down;-Is-The-FDIC-Still-Solvent.html
or
http://tinyurl.com/kjouy5
edit for tinyurl




8/14/09 BB&T Said to Be Taking Colonial in Year’s Biggest Bank Failure

BB&T Corp., the North Carolina lender that bought back a $3.1 billion stake from the U.S. government, is taking over offices and deposits of Colonial BancGroup Inc., according to a person familiar with the matter.

Colonial, Alabama’s second-largest bank, is being closed by regulators today, the person said, becoming the largest U.S. bank failure of 2009 after an expansion into Florida saddled the lender with more than $1.7 billion in soured real-estate loans.

Colonial said last month there was “substantial doubt” it could survive and on Aug. 7 said its warehouse mortgage-lending business is the target of a U.S. criminal probe. The Securities and Exchange Commission issued subpoenas for documents related to accounting for loan loss reserves and participation in the Troubled Asset Relief Program, the bank said.

A call to Colonial spokeswoman Merrie Tolbert wasn’t immediately returned. “The FDIC does not comment on open institutions,” agency spokesman David Barr said in an e-mail.

Regulators are closing banks at the fastest pace in 17 years amid mounting losses on real-estate loans in the worst economic crisis since the Great Depression. The FDIC is offering to share losses with buyers of failed banks, reviving a practice used during the U.S. savings-and-loan crisis in the late 1980s.

BB&T on June 17 redeemed preferred shares that had been sold to the U.S. Treasury under TARP, joining nine other banks permitted to quit the fund.

Second-Quarter Loss

Colonial posted a $606 million second-quarter loss, its fifth straight deficit, mostly because of soured loans to developers and home builders in Florida. A planned $300 million injection by an investor group collapsed and the bank hasn’t met capital requirements to qualify for money from TARP, the $700 billion U.S. bailout program for financial firms.

Colonial was founded in 1981 in Montgomery by Chief Executive Officer Bobby Lowder, who oversaw acquisitions in Florida, Georgia, Nevada and Texas, where economic growth outpaced Alabama. Lowder stepped down as chairman in January after failing to raise capital as required by regulators.

BB&T has declined 10 percent in the past year, compared with a 30 percent fall in the 24-member KBW Bank Index. Colonial has declined 94 percent.

Colonial shares did not open this morning in New York Stock Exchange composite trading.
http://bloomberg.com/apps/news?pid=20601087&sid=aXsSaA6DJw_4

[Demeter]

76. Like Wow, Man. (My tribute to the 40th anniversary of Woodstock)

[ozymandius]

11. Bank of America May Expand Commodities Group 25% in Three Years

Aug. 14 (Bloomberg) -- Bank of America Corp., the biggest U.S. lender, may expand its metals and energy team by 25 percent in the next two to three years as a rebound in commodities attracts billions of dollars of investments.

The bank, which bought Merrill Lynch & Co. for $29 billion in January, already hired people in China, Singapore, India and Japan, David Goodman, co-head of global commodities, said by phone from London Aug. 7. The commodities group is now about 600 people, people familiar with the matter said.

.....

The bank will probably take more delivery and storage of industrial metals, Goodman said. Metals will become “a significant part in our revenue,” he said.

Lead and tin stockpiles in warehouses monitored by the London Metal Exchange have more than doubled this year, while aluminum inventory increased 96 percent, zinc 70 percent and nickel 38 percent.

China, the world’s largest metals consumer, said industrial production expanded 10.8 percent in July. Chinese copper imports expanded for five consecutive months through June.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a81I.3GqIzvM

[Demeter]

28. What was that about not taking risky ventures, Ben?

[rfranklin]

40. It's simple! The welathy have too much spare cash...they are

distorting markets in their quest to make even more money off that spare cash. If most of that money was redirected to consumers who actually need to spend it, our economy would not have experienced the "financial crisis" that we've seen in the last year or so. Banking and financial wheeling and dealing are arguably the only enterprise that has grown in the U.S.A. over the past ten years (other than weapons manufacture, of course.) Over the past few years more than 10,000 full service bank branches were opened. All the better to collect more late fees, overdrawn fees, etc. Again, nothing productive, just money making money.

Again, the problem is that the uber wealthy have too much money and do not know what to do with it other than create chaos as they try to geometrically increase their holdings without creating any value.

[Demeter]

49. If that Excess Cash Was Diverted to Taxes, As It's Supposed to Be

most of our national problems would be solved instantly.

[Ghost Dog]

90. That is exactly what is happening

(among the unimaginative wealthy classes of the overconsumed, misguided rich countries).

[Festivito]

12. Debt: 08/12/2009 11,658,192,962,449.83 (DOWN 8,293,022,558.06) (Up .08B.)

(Debt up .08B$, i.e. 81M, FICA side down over eight billion.)

= Held by the Public + Intragovernmental(FICA)
= 7,330,714,241,624.47 + 4,327,478,720,825.36
UP 81,638,592.29 + DOWN 8,374,661,150.35

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: $9.77, ABOUT TEN BUCKS for a 1B$ 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 307,077,542 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 $37,964.98.
A family of three owes $113,894.94. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 24 reports in the last 30 to 33 days.
The average for the last 24 reports is 5,566,111,345.20.
The average for the last 30 days would be 4,452,889,076.16.
The average for the last 33 days would be 4,048,080,978.33.
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$/day.
There were 141 reports in 204 days of Obama's part of FY2009 averaging 7.26B$ per report, 5.06B$/day so far.
There were 216 reports in 316 days of FY2009 averaging 7.56B$ per report, 5.17B$/day.

PROJECTION:
There are 1,257 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.2T$.
It could be higher. It could be lower.

HISTORICAL:
President's term begins and ends on Jan 20.
(Guess who might want to hide the Reagan Bush years. Jan 20 data is missing before 1993.)
01/20/1993 _4,188,092,107,183.60 WJC Inaugural
01/22/2001 _5,728,195,796,181.57 WJC (UP 1,540,103,688,997.97)
01/20/2009 10,626,877,048,913.08 GWB (UP 4,898,681,252,731.43)
08/12/2009 11,658,192,962,449.83 BHO (UP 1,031,315,913,536.75 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: 1,633,468,065,537.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
07/23/2009 +010,040,233,982.08 ------------**********
07/24/2009 -000,124,358,216.07 ---
07/27/2009 +000,077,777,899.40 ------------******* Mon
07/28/2009 +000,420,333,618.55 ------------********
07/29/2009 +000,733,026,310.02 ------------********
07/30/2009 -026,031,384,097.19 -
07/31/2009 +095,534,108,940.65 ------------**********
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******
08/06/2009 -000,578,106,269.92 ---
08/07/2009 +000,290,467,707.81 ------------********
08/10/2009 +000,222,135,743.03 ------------******** Mon
08/11/2009 +000,246,752,500.45 ------------********
08/12/2009 +000,081,638,592.29 ------------*******

75,790,679,639.80 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power.
Since then US borrowed $1,993,561,159,190.76 in last 328 days.

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=4012870&mesg_id=4012978

[ozymandius]

13. Toxic Loans Topping 5% May Push 150 Banks to Point of No Return

This is some fitting Friday news. We seem to be privy to a list of banks whose lobbies will soon smell of pizza. - ozy

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

The biggest banks with nonperforming loans of at least 5 percent include Wisconsin’s Marshall & Ilsley Corp. and Georgia’s Synovus Financial Corp., according to Bloomberg data. Among those exceeding 10 percent, the biggest in the 50 U.S. states was Michigan’s Flagstar Bancorp. All said in second- quarter filings they’re “well-capitalized” by regulatory standards, which means they’re considered financially sound.

.....

Missed payments by consumers, builders and small businesses pushed 72 lenders into failure this year, the most since 1992. More collapses may lie ahead as the recession causes increased defaults and swells the confidential U.S. list of “problem banks,” which stood at 305 in the first quarter.

Cash Drain

Nonperforming loans can eat into a company’s earnings and deplete cash, leaving banks below the minimum capital levels required by regulators. Three lenders with nonaccruing ratios of at least 6.2 percent as of March were closed last week. Chicago- based Corus Bankshares Inc., Austin-based Guaranty Financial Group Inc. and Colonial BancGroup Inc. in Montgomery, Alabama, each with ratios of at least 6.5 percent, said in the past month that they expect to be shut.

.....

Corus, with more than two-thirds of its loans nonperforming, has the highest rate among publicly traded banks. The company said last month that it’s “critically undercapitalized” after five consecutive quarterly losses tied to defaults on condominium construction loans. Randy Curtis, Corus’s interim chief executive officer, didn’t respond to calls for comment.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTTT9jivRIWE

[Robbien]

17. Article out today about an escrow officer pleading guilty to setting up strawman loans

Christopher S. Bartlemus, 31, of Phoenix, pleaded guilty to conspiracy counts in two separate indictments on August 10 and August 12, 2009. In one case, Bartlemus pleaded guilty to Conspiracy to Commit Wire, Bank and Mail Fraud and in a separate case, to Conspiracy to Commit Bank Fraud. Sentencing is set before Judge McNamee on November 2, 2009 and Judge Campbell on November 16, 2009.

Bartlemus’ role in the conspiracy stemmed from his position as an escrow officer with Security Title Agency. During the charged conspiracies he facilitated “cash back” at closing to third parties who were unrelated to the transactions. He failed to disclose the assignment of these funds to the lenders. All of the homes where he facilitated a third party assignment, in violation of lender’s instructions, have gone into foreclosure.

In case 1 (0256) Bartlemus was charged in a flipping scheme which lists 32 properties which were purchased by straw borrowers with “cash back” at closing. Indicted with him were:

1. Mario G. Bernadel - a real estate investor and owner of Compass Development, LLC
2. April J. Lucero - a former loan officer at Sterling Home Mortgage and owner of Lamp Light Marketing
3. Amanda L. Adorno - former assistant to Lucero and owner of D.L.A Developments
4. Marcos R. Branch - a loan officer at Value Mortgage Funding and owner of AMB Consulting
5. Brittany Ann Parrish - a loan officer at Achievers Financial and owner of Phoenix Development Company
6. John H Webber III - an alleged recruiter of straw borrowers and owner of JC Development
7. Stephanie McWilliams - a straw borrower and employee of BJ Group Homes who allegedly falsely verified employment of other straw borrowers.

In case 2 (0368) Bartlemus was charged in a flipping scheme which lists 5 properties which were purchased by straw borrowers with “cash back” at closing. Indicted with him were:

1. Eitan Maximov - a real estate investor and owner of Connect American Worldwide, Eilon Properties, Nogara Financial and Aragon Stables.
2. Rivka Lewis - a straw borrower
3. Joshua Lewis - a straw borrower
4. Andrew Ament - an appraiser


http://arizona.realestaterama.com/2009/08/13/escrow-officer-pleads-guilty-to-his-role-in-cash-back-mortgage-fraud-schemes-ID0100.html


Every day we hear about new ways people were scamming the mortgage business. I am surprised only five percent of the loans out there are toxic.

[kickysnana]

21. Mortgage scammers must repay millions

The two men who masterminded a huge mortgage fraud scheme that lay waste to parts of north Minneapolis are in prison and say they're broke.

And now they're on the hook for $11.7 million, a federal judge ruled Tuesday.

In a five-minute court session in Minneapolis, U.S. District Judge Joan Ericksen ordered restitution from Jonathan Helgason and Thomas Balko, co-owners of a Roseville-based firm that bought and then resold houses for inflated prices to straw-buyer investors, mostly in north Minneapolis.

http://www.startribune.com/politics/state/52966402.html?elr=KArks:DCiUBcy7hUiD3aPc:_Yyc:aU7DYaGEP7vDEh7P:DiUs

A Twin Cities real estate agent was sentenced to more than 16 years in prison for a mortgage fraud scheme.

Larry Maxwell, who's 54 and from Minneapolis, must also pay a $500,000 fine and $2 million in restitution.

In April, a Hennepin County jury found Maxwell guilty of 18 counts of racketeering, theft by swindle, forgery and identity fraud. After a seven-week-long trial, the jury returned the verdict in less than three hours.

http://kstp.com/news/stories/S1082707.shtml?cat=206

[Demeter]

29. Update the Masthead, Ozy!

Couple more in prison.

[ozymandius]

71. You'll see them on Monday.

I really wish some big fish would get snagged in the net.

[Demeter]

75. You Need Minnows For Bait

All will come to pass in the fullness of time--I just hope it's over before any more real people are hurt.

[DemReadingDU]

44. Denninger weighs in about those 150 banks

8/14/09 Banking On The Financial System? Not So Fast!
Karl Denninger

Hoh hoh hoh! We're finally seeing some recognition of what I've been talking about for the last two years!


Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.


And Bloomberg appears to have recognized the key problem with these banks (all of which should have been shut over a year ago):


Excluding the stress-test list, banks with nonperformers above 5 percent had combined deposits of $193 billion, according to Bloomberg data. That’s almost 15 times the size of the FDIC’s deposit insurance fund at the end of the first quarter.


Yeah, that's a problem.


But the real problem is regulatory malfeasance. See, the purpose of the Tier Capital Ratio is to permit the government (FDIC) to come in via the OTS or OCC before the regulatory capital cushion is entirely depleted, and if the law is actually followed and people actually do their jobs, there is no loss to the depository insurance fund.

That is, so long as a bank's assets can be sold (in total) for more than its liabilities (deposits) there is no loss. The bank may go bust from a standpoint of being a "going concern" but there is no hit to the taxpayer, no hit to the depository fund and no problem (other than for the shareholders of the bank involved.)

But when you allow banks to lie for two years for the explicit purpose of "trying to earn their way through the cycle" you hitch your argument to the view that the real issue is one of consumer confidence, not excessive debt and loose lending.

Only a fool would have argued that given what we know of the lending environment from 2003-2007, yet that is exactly the argument that Bernanke, Paulson, Geithner, Bair and others have made through this entire mess!

President Obama should have closed all banks for a week when he first came into office, sent in the examiners, and allowed those with non-performing loan bases of 2% or less to re-open. He should have set forth a 2% non-accrual standard and stuck by it - hit that, you're closed. Period.

But that would have run dimensionally contrary to the viewpoint that we must "enhance lending" to get out of this recession - a foolhardy perspective when the reason you're in recession in the first place is that too many people made too many loans to too many people who had no money to pay them back!

Now we're stuck - we appear to have "avoided" a Depression, but we have in fact done no such thing. We have instead played "extend and pretend" writ large on the taxpayer's back, and yet the default rate continues to explode higher because we have refused to force these institutions to disgorge their bad assets.

In reality the root of this problem lies with lax (or absent) regulation over the last ten years in the banking sector, where "fog a mirror" loans were available for virtually any purpose.

As a consequence of our government's refusal to face this problem head-on in 2007 and 2008 (despite many calling for it, myself included) we are nowhere near the end of this crisis, despite rallies in the stock market. Indeed, I remain convinced that recognition of reality will come fast and hard in the next year or so as these "not too big to fail" firms blow up one by one, forcing regulators to come in and close them, and finally, asset valuations are forced down to a realm that comports with reality.

http://market-ticker.denninger.net/archives/1332-Banking-On-The-Financial-System-Not-So-Fast!.html

[ozymandius]

15. Blackstone CEO “Earns” $702 million

From The Big Picture:

Chief Executive Officer Stephen Schwarzman, a founder of the company, is cashing out.

This years lucre — $700 million, plus some minor salary — is the first of 5 equal payments that will net him a cool $4.7 billion dollars. Nice work if you can get it.

All I can say for sure is this represents a massive transfer of wealth from Shareholders to management.

Bloomberg:

The package for Schwarzman included $2.3 million of compensation and almost $699.8 million from the vesting of one- quarter of the equity granted as he took the firm public at $31 a share in 2007, said the Portland, Maine-based Corporate Library. Schwarzman, Blackstone’s founder, was granted $4.7 billion in equity at the time of the offering, said the Corporate Library, which specializes in governance issues. . .”

more at link...

[UpInArms]

26. Blackstone's Schwarzman tops U.S. CEO payroll: study

http://www.reuters.com/article/businessNews/idUSTRE57C5AX20090813?feedType=RSS&feedName=businessNews&sp=true

BOSTON (Reuters) - Taking his private equity firm public paid off big for Blackstone Group LP's Stephen Schwarzman, who became the top-paid chief executive in the United States last year, a title he is likely to retain for some time, according to an analysis released on Thursday.

But the surest route to big bucks was running an oil or natural gas company. Their CEOs represented seven of the 10 highest-paid U.S. CEOs in 2008, according to a report by independent research group The Corporate Library.

Schwarzman bumped Oracle Corp's Larry Ellison down to No. 2 on the list. They were followed by seven oil CEOs and Michael Jeffries, head of teen apparel retailer Abercrombie & Fitch Co.

The year stood out for the amounts the top-paid executives received, as seven people secured total compensation of more than $100 million. Just three made that much a year before and two of them were retiring CEOs, said Greg Ruel, a Corporate Library research associate who coauthor the report.

Ellison's compensation, for instance, soared to almost $557 million, from $192 million.

Another major shift was how few executives outside the oil and gas industry made the list.

"It's so filled with petroleum executives," Ruel said, adding that the result reflected executives cashing in on stocks that until last summer were still chasing oil's rally to a record high near $150 a barrel.

The study ranks CEOs on "total realized compensation," which includes cash pay and bonus, perks, plus the value of stock options exercised and the vesting of restricted shares, Ruel said.

...more...

[Robbien]

35. All the LBOs which generated that equity he is cashing out on

have been (and will continue to be) falling into bankruptcy court where the US taxpayer picks up the bill.

[UpInArms]

23. dollar watch

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

Last trade 78.346 Change -0.063 (-0.08%)

Risk Appetite Hits New Highs For the Year, How High Can It Go?

http://www.dailyfx.com/story/topheadline/Risk_Appetite_Hits_New_Highs_1250216132057.html

Like the underling markets, risk appetite was exhibiting high levels of volatility this past week without making true progress. Nonetheless, carry interest and many of the other speculative asset classes are just off of their highest levels for the year. However, as this market recovery matures, the scrutiny over the fundamental drive behind this move will increase.



• Risk Appetite Hits New Highs For the Year, How High Can It Go?
• Growth Outlook Improves, But is it the Level of Expansion to Support Yields?
• Financial and Credit Conditions Improving But Stimulus Exit Strategy Focused on Growth

Like the underling markets, risk appetite was exhibiting high levels of volatility this past week without making true progress. Nonetheless, carry interest and many of the other speculative asset classes are just off of their highest levels for the year. However, as this market recovery matures, the scrutiny over the fundamental drive behind this move will increase. And, while a perfunctory look at the better-than-expected GDP readings and downtick in the US unemployment rate these past few weeks may seem the perfect catalyst for sure-footed bull trend, the outlook for risk and reward is much more complicated than that. Taking stock of the general level and health of the markets, momentum looks fully supportive of a steady rise in risk appetite. From investors’ traditional market of choice, the S&P 500 has been stuck in a range for the past two week; but the ceiling on this congestion happens to mark the highest level for the index in 10 months. However, it is notable that this advance has developed on a steady decline in volume since the March reversal. This offers a unique insight that currency traders aren’t privy to due to the lack of accurate volume data. As for the FX world, risk-sensitive currencies have maintained their trajectory; but conviction has waned over the past week. Whether this is a hiccup or the making of a reversal, it is too early to tell. Yet, looking at the underlying measures of expected return and volatility for this liquid asset class, the elements for a recovery seem to be there as volatility hits lows not seen since before Lehman and yield forecasts rise.

A good balance of risk and reward is the essential measure for each trade; but it is also the foundation for sentiment and investment flows for the broader market. This is what needs to be kept in mind when considering whether we are entering a long-term bull wave for the global economy and markets. Over the past week, the data and official forecasts that have been releases have offered additional fuel to the claim that we are indeed heading towards a sustainable recovery. From the US – the world’s largest economy – the monthly non-farm payrolls (NFP) report supported the smaller than expected contraction in second quarter GDP reported the previous Friday with the first downtick in the unemployment rate since April of 2008. Optimism was furthered with the surprising expansion in the Euro Zone’s two largest members – Germany and France. These are just a few of the early signs that the global economy is indeed recovering from its worst slump since the Great Depression. However, a tempered recession – and even a return to positive growth – does not ensure the next market phase. Without a recovery in employment and consumer demand, the economy will stagnate after government support is withdrawn. Eventually, speculation will have come to the point that it has overshot the true, sluggish pace of growth and the premium will be deflated. However, due to the influx of sidelined funds this may not happen until the fourth quarter. In the meantime, there are still lingering issues with toxic debt on government balance sheets and the need to reduce government deficits.

...more...

Euro Steady Despite Continued Disinflation, But Declining Interest Rate Exceptions Could Weigh Going Forward.

http://www.dailyfx.com/story/dailyfx_reports/daily_brief/Pound__Euro1250246801430.html

The Euro has seen very little volatility overnight after an initial descent to start Asian trading despite Euro-Zone CPI in July falling below expectations of -0.6% to -0.7%. The sharp fall in oil prices from a year ago continues to filter through the economy and led to a 14.4% decline in the energy component. A 0.5% decline in French 1Q non-farm payrolls beat expectations of -0.8% and could explain the unexpected growth from the country during the period. The offsetting data points did little to change interest rate expectations leaving the single currency range bound between 1.4255-1.4285.

Despite yesterday’s surprising growth figures we have seen markets expectations for tightening over the next year according to Credit Suisse overnight index swaps steadily decline from 80.9 to 59.2. This could be a sign that Euro weakness may be ahead as the optimism derived from signs that the recession is ending is replaced by diming expectations for future growth. Indeed, equity markets seem poised for a pull back which should weigh on the Euro given its strong correlation. We have seen resistance at 1.4310-61.8% Fibo of 1.4448-1.4087 which could lead to another test of the 50-Day SMA at 1.4086 which continues to provide support.

The Pound saw a spike lower ahead of a BoE bond auction but quickly regained its footing on a report that showed U.K. home repossessions fell 10% in the second quarter from the prior period. Lower interest rates and tolerant lenders helped limit the number of properties seized but the 11,400 homes repossessed was a rise of 14% compared with the same period the previous year, according to the Council of Mortgage Lenders. However, the BoE still felt the need to add to their asset purchase program as credit conditions remain challenging and if employment doesn’t improve we could see a set back in the third quarter. The GBPUSD found resistance at the 20-Day SMA at 1.6590 and failure to close back above the level today may lead to another test of the 50-Day SMA at 1.6452.

The dollar has remained range bound overnight as risk appetitive has waned after yesterday’s weak retail sales. Fears that consumer consumption will be subdued going forward have offset the signs that the global economy is stabilizing and raise concerns that we are headed for a “W” shaped recovery. Today’s University of Michigan consumer confidence is expected to rise to 69 from 66 which could offset some concerns. Last month we saw an unexpected decline as job losses weighed on sentiment. The major release crossing the wires today is the consumer price index which may not be that market moving as the Fed sent a clear signal that interest rates will remain at low levels for the foreseeable future. Therefore, the expected decline from -1.4% to -1.9% shouldn’t impact interest rate expectations and calm concerns that upside risks for inflation are increasing. The July Industrial production shouldn’t be overlooked today as the global cyclical indicator is forecasted to show an improvement of 0.2% which would reinforce the growing positive growth outlook and may spur risk appetite and dollar weakness.

...more...



a "W" shaped recovery! hahahahaha!

well, folks, it was a "W" shaped fiscal fiasco!

And thanks, Ozy, for putting the dollar chart up there - that was an excellent idea from the other one :thumbsup:

:hi:

[UpInArms]

24. UBS tax deal seen involving big accounts

http://www.reuters.com/article/businessNews/idUSLE31799020090814?feedType=RSS&feedName=businessNews

ZURICH (Reuters) - A landmark settlement that will spare UBS a lengthy and damaging U.S. tax trial is set to be signed next week and will involve the disclosure of the biggest holders of secret Swiss accounts.

"The signing will most likely take place next week," a source familiar with the situation told Reuters on Friday.

The source did not want to disclose any details from the settlement, but the New York Times said on Friday Swiss accounts in the name of U.S. residents over a certain dollar amount would be disclosed to U.S. tax authorities.

Earlier this week, the U.S. and Swiss government initialed an out-of-court settlement to end a dispute over whether the Swiss bank should be forced to disclose the names of 52,000 rich U.S. clients suspected of tax evasion.

However, the parties did not disclose details of the deal, which ends a protracted tax dispute that has damaged UBS's image abroad and threatened Switzerland's prized bank secrecy.

The details of the settlement will also be made public next week, the source added.

The New York Times said the settlement would involve UBS disclosing the names of U.S. clients who had set up offshore entities to evade taxes and those who had contact with Swiss-based UBS bankers in person, by telephone or e-mail.

...more...

[UpInArms]

25. 150 American UBS clients may face criminal charges: report

http://www.reuters.com/article/businessNews/idUSLE27650520090814?feedType=RSS&feedName=businessNews

(Reuters) - 150 American clients of UBS are likely to face criminal charges related to tax evasion in the United States, the New York Times reported, citing a person briefed on the matter.

The person told the paper that several inquiries across the country were being handled by dozens of prosecutors and would result in criminal complaints.

The paper said it was unclear where the U.S. government got the client names from.

<snip>

Accounts over a certain dollar amount would be included, the paper said.

...more...

[DemReadingDU]

31. Six Lobbyists Per Lawmaker Work to Shape Health-Care Overhaul

8/14/09 Six Lobbyists Per Lawmaker Work to Shape Health-Care Overhaul

If there is any doubt that President Barack Obama’s plan to overhaul U.S. health care is the hottest topic in Congress, just ask the 3,300 lobbyists who have lined up to work on the issue.

That’s six lobbyists for each of the 535 members of the House and Senate, according to Senate records, and three times the number of people registered to lobby on defense. More than 1,500 organizations have health-care lobbyists, and about three more are signing up each day. Every one of the 10 biggest lobbying firms by revenue is involved in an effort that could affect 17 percent of the U.S. economy.

These groups spent $263.4 million on lobbying during the first six months of 2009, according to the Center for Responsive Politics, a Washington-based research group, more than any other industry. They spent $241.4 million during the same period of 2008. Drugmakers alone spent $134.5 million, 64 percent more than the next biggest-spenders, oil and gas companies.

“Whenever you have a big piece of legislation like this, it’s like ringing the dinner bell for K Street,” said Bill Allison, a senior fellow at the Sunlight Foundation, a Washington-based watchdog group, referring to the street in the capital where many lobbying firms have offices.

more...
http://www.bloomberg.com/apps/news?pid=20601110&sid=aqMce51JoZWw

[Demeter]

50. If The Congress Simply Dropped the Age of Eligibility For Medicare

by 5 years every year, they could do without all the loopholing, buttonholing, and so forth. No great massive new bill, bureaucracy, or pork-barrelling.

Just coverage for those who have none, oldest and sickest first. Everyone in 10 years.

This is just so nuts.

[DemReadingDU]

67. Agreed!

I wrote to both my Senators, Congressman, and White House yesterday such that the Medicare system is already in place. Just open it up to the uninsured, oldest and sickest. Why is this so difficult for the politicians to understand?????

[Demeter]

73. They Can't See Any Benefit to Themselves OR Their Constituents

Big Pharma, Big Insurance, Big Hospital Chains, etc.

[Robbien]

37. Federal Reserve Balance Sheet Update: Week of August 12, 2009

Total Federal Reserve balance sheet assets for the week of August 12 of $1,990 billion (an increase of $13 billion from the prior week) consisting of:

* Securities held outright: $1,373 billion (an increase of $107 billion MoM, resulting from $43.7 billion in new Treasury purchases, $53.8 billion increase in MBS and $9.4 billion in Agency Debt), or $18.6 billion increase sequentially
* Net borrowings: $340.5 billion (a decline of $47 billion month over month)
* Float, liquidity swaps, Maiden Lane and other assets: $277 billion (another record decrease of $83.7 billion month over month due to a continued reduction in Central Bank Liquidity Swaps ($32 billion) and ($52) billion in CPFF outstandings).The rate of decline sequentially has, however, slowed dramatically and was just $5.6 billion lower than the prior week (after a $37.7 billion reduction in the prior week). It appears the Fed has reached the threshold in removing Swap and CPFF liquidity.
* Foreign central bank liquidity swaps have hit another lowest level since the Lehman bankruptcy ($76.2 billion), athough the rate of sequential decline has slowed to a crawl. We would not be surprised if next week the Fed indicated more liquidity was being pumped into CB Swaps.

Foreign holdings of US Securities decreased for the first time in 5 months by $299 million sequentially (weekly) to $2,809.9 billion from $2,810.2 billion in the prior month. Keep in mind in the same time period the Fed purchased over $16.6 billion of Treasuries, indicating that in the last week the Fed was the only purchaser of Treasuries.

http://seekingalpha.com/article/156144-federal-reserve-balance-sheet-update-week-of-august-12-2009

[UpInArms]

39. last week the Fed was the only purchaser of Treasuries

:scared:

[florida08]

41. and will continue to be

according to Chris Hedges and John Lancaster

[DemReadingDU]

46. Paul Craig Roberts: Spinning the Economic News

Spinning the Economic News

By Paul Craig Roberts

August 12, 2009 "Information Clearing House" --- Last Friday a Bloomberg.com headline read: U.S. Stocks Gain, Treasuries Drop as Unemployment Rate Declines.

Let’s have a look at the reported decline in the rate of unemployment. Do you believe that the US auto industry added 28,000 jobs in July amidst GM bankruptcy, sell-off and close-down of GM auto divisions, and demise of GM suppliers? No? Well, that’s what the Bureau of Labor Statistics reported.

The 28,000 new jobs were created by “seasonal adjustments.” July is a month when jobs are automatically added by the BLS to seasonally smooth the layoffs of auto workers during July’s retooling for the new model year. This year most of the retooling did not occur, yet the annual seasonal adjustments did. Adjustments are also made for supporting industries, which are partially idled while auto production halts for retooling.

More phantom jobs were created by the “Birth-Death Model.” The payroll jobs data contains guesses about the numbers of new startup company hires and jobs lost from business failures. Failed businesses don’t report the lost jobs (deaths), and new jobs from startups (births) are not captured in the reporting. The government estimates these numbers, but the estimates are based mainly on growth periods, not on recessionary times. Consequently, during economic downturns, the estimates from the Birth-Death Model overestimate the number of new startup jobs and underestimate the job loss.

The employment outlook was further improved by pushing another cadre of workers, who have been unemployed for too long, off the unemployment rolls. Remember that since the Clinton administration, the long-term discouraged (people out of work for more than one year) are not counted as being in the work force. The length of the current downturn means that short-term discouraged workers, who are counted among the unemployed, are now moving into the long-term discouraged category, which simply erases their existence and lowers the measured rate of unemployment.

All sorts of distortions can find their way into the official statistics. For example, industrial production estimates are based on electricity consumption. Unusually hot weather, which causes a jump in air conditioning use, appears in the statistics as an increase in industrial output. Cool weather spells during summer reduces electricity use and results in a phantom drop in industrial output.

Nominal retail sales figures can increase from an uptick in inflation.

An increase in real GDP can be the result of underestimating inflation.

Other distortions come from the year to year comparisons. As time passes, new comparisons are no longer with previous peaks, but with more recent lows. Thus, reported declines are less severe than previously, which makes things sound better when they aren’t.

By spinning the financial news, the appearance of recovery is created, and this lures people back into the stock and real estate markets where they can lose the remainder of their wealth.

http://informationclearinghouse.info/article23254.htm

[Demeter]

51. Beijing considers appeal of WTO ruling

http://www.ft.com/cms/s/0/326b9c4a-882c-11de-82e4-00144feabdc0.html

since FT requests I NOT repost: the gist of it is:

China restricts books and movies through monopoly on distribution; WTO ruled against them. China thinking of appeal, corporations think they stand no chance, just for the experience...

Why anyone thinks China actually WANTS foreign ideas let into the country is beyond my comprehension! What part of Communist fascist governemnt don't they understand?

[Demeter]

59. China backtracks on PC software filters

http://www.ft.com/cms/s/0/8836165c-8839-11de-82e4-00144feabdc0.html

China bows to foreign computer hardware/software manufacturers' demands for free speech. This is totally ironic.

[Demeter]

52. US retail sales fall unexpectedly

http://www.ft.com/cms/s/0/2761e976-87ff-11de-82e4-00144feabdc0.html

The usual disengenuous BS:

Retail Sales unexpectedly fell.
Unemployment unexpectedly rose.
?Foreclosures accelerate, unexpectedly.

[Demeter]

53. California to stop issuing IOUs

http://www.ft.com/cms/s/0/3141b008-8862-11de-82e4-00144feabdc0.html

Schwarzennegger gonna redeem them all with bonds (I just summarize this stuff!)

Must have had a good drug year in California.

[Demeter]

54. Warning over US cash-for-clunkers scheme

http://www.ft.com/cms/s/0/940088ae-8830-11de-82e4-00144feabdc0.html

Good for auto manufacturers, sucking all the cash out of the room for any other retailers...economists can be so indignant when stating the obvious!

[neverforget]

60. So what happens when the Cash for Clunkers is over? What happens

to demand then? So, for 2 months, car sales will be really good, but afterward, not so much.

[Demeter]

64. I'm sure the theory is that this little trickle will generate a mighty flood of spending

but Ben's been wrong before, and Summers/Geithner haven't a clue. With their blinders and earplugs firmly in place, they will lead us to the abyss yet again with sure-footed strides. Don't call them the 3 Stooges for complimentary reasons!

[Demeter]

55. Iceland seeks help from UK fraud office

http://www.ft.com/cms/s/0/b3c9d512-8832-11de-82e4-00144feabdc0.html

"to discover whether criminal wrongdoing played a role in bringing down Iceland’s banking sector."

Yah think?

Iceland cries Uncle, England and Netherlands consider mercy (HA!)

[Demeter]

57. US sees quick victory in Afghanistan

http://www.ft.com/cms/s/0/0980bb84-885f-11de-82e4-00144feabdc0.html

MacNamara lives! Worse yet, they transferred his brain to Defense Secretary Gates.

Will somebody shoot out the light at the end of that tunnel, please?

[Tansy_Gold]

97. Um, excuse me, but after we've been there for eight effing years,

"quick" is no longer an option.


:wtf: are they usin' for brains? Oh, right, McNamara's, and he's dead.


Tansy Gold

[Demeter]

58. Eurozone data raise hopes for recovery

http://www.ft.com/cms/s/0/4ed29388-87dd-11de-82e4-00144feabdc0.html

Having rigorously disinfected their banking systems by making good choices and doing the right (if difficult) things (and stopping the foolishness), and forbidding that infected Typhoid-Mary Yankee kid to come over and play in their sandbox anymore, Germany and France are actually having recovery. Good luck to them!


The economists are confounded by this. Enough said.

Financial Times may want to reconsider their ban on reposting...I'm having WAY too much fun summarizing them!

[OverDone]

61. This is no Recession

This is crazy, the market is only down 140 points, it should be down like 4000. I listen to these people on TV saying recession over, yeah right just look at the job news people. I check the sites above and other ones like dailyjobcuts , and there is no recovery. We are losing jobs at a rapid rate. How do you have a recovery with no jobs, answer me that... Amazing whats going on

[Demeter]

63. All True. Welcome to the Hand-Holding Therapy Thread of SMW

You're in good company here.

[Robbien]

66. Welcome to DU OverDone

:hi:

You couldn't have picked a better thread than the SMWer thread to post your very first post.


We are living in interesting times. When the rhetoric coming from "The Powers That Be" is so far removed from reality it is hard to keep from going nuts.


Again, welcome. :hi:

[ozymandius]

74. Indeed, crazy.

Compound this information with the daily S&P P/E ratio. The term "crazy" barely touches the whole enchilada.

Edit to say "welcome" to DU and the Stock Market Watch!

[Dr.Phool]

78. CNBC was blatantly lying through their teeth yesterday morning.

The first thing I do in the morning, is pull up SMW. I checked everything, went to the dog park, and then checked everything out on SMW again.

I got to the gym at 9:30 am, and CNBC morning bell was on in front of my treadmill. They're talking about great numbers in retail, MalWart, and unemployment! :wtf: Cramer and his merry band of losers.

I just looked at the numbers 20 minutes earlier, and their was nothing, nothing good about them.

Even with closed captioning, their voices are like fingernails on a blackboard. I switched it to the Weather Channel. Even the weatherman is right more often than these clowns.

[Ghost Dog]

93. Was there an option to actually, you know,

switch it off?

[OverDone]

79. Thank

Thanks both of you. Yeah just amazes me looking at everything and when I saw that site I had to share :-)

[Hawkowl]

88. Bacteria, Boids and Market Instability

"Old-time economics saw investors as rational individuals, all behaving autonomously in a logical fashion, rather like Mr. Spock umbilically attached to Deep Thought. Today not even economists really believe that this is how people actually operate, but figuring out something better is a not insignificant task. Psychologists, however, have long known that what happens in the gaps between people is as important as what happens in the gaps between their ears – so is there something going on in the interactions between investors, which causes market instability?.......

If we start by making a few assumptions about what investors actually do in real life – like, for instance, that they don’t behave rationally and that they tend to copy successful behaviour from people they’re closely connected to – we can rapidly create a model that produces outputs that look very different from those generated by models of people who behave independently and rationally. In fact the output of these models looks a lot like the readout we see from a seismograph when an earthquake occurs.

So it seems that the interactions between investors and how these interactions affect their willingness or otherwise to invest is the critical thing in these models. Fundamental value is, in fact, not the most important issue most of the time. Indeed, what seems to be really important is the internal behaviour of the participants, not the external behaviour of companies out in the real-world. Which simply confirms the suspicions of harassed leaders of industrial companies – the markets don’t care about real business issues."


http://www.psyfitec.com/2009/07/bacteria-boids-and-market-instability.html

[tclambert]

85. "End of recession" and "end of recovery" are two very different animals.

And may occur years apart. The economists regard it as technically the end of the recession when GDP ticks up at all. To recover what was lost during this recession may well take 5 years. If the economists speak carefully, they will say the recovery begins the same day the recession ends.

As I have pointed out before, being the lone pompatus of optimism here, jobs have increased in three months this year, April, June, and July. But those are raw numbers, not factoring in population growth. America needs to add about 1 million new jobs per year to keep up with the population. Between the recession and the Bush years not keeping up, we're "down" something like 10 million jobs. During the Clinton years, we added an average of about 3 million jobs per year. We would need about 4 of those years to get back to status quo ante. That's ante Bush, not anti-Bush, though anti-Bush is a virtuous quality.

The stock market and jobs don't correlate very well. They keep saying jobs are a "lagging indicator." Seems like everything else starts heading upwards before jobs. That kind of makes sense. When business starts picking up, employers don't start hiring right away. They wait until current employees working overtime can't keep up with new orders.

[tclambert]

87. Oh, welcome to DU and SMW.

If you are of a pessimistic turn of mind regarding economics, you will meet many friends on Stock Market Watch.

[OverDone]

96. Thanks

Hahaha, Funny. Thanks

[Ghost Dog]

92. The rich get richer. That's all that matters

(to them, and they pull the (political) strings).

And if the not-rich are more easily downtrodden, that makes life easier for the rich (cheaper, more compliant services/servants).

Welcome :hi:

[Demeter]

62. Blunders sustained Madoff fraud

http://www.ft.com/cms/s/0/043d580a-878b-11de-9280-00144feabdc0.html

Ineffective regulation and monitoring on both sides of the Atlantic sustained Madoff's fraud for decades. The regulators were happy with the paperwork, and never verified or cross-checked anything.

Madoff's right-hand man, Mr DiPascali, 52, pleaded guilty on Tuesday to 10 criminal charges and is singing like a bird. He is NOT naming names, however. The prosecution is fishing for more stoolies with an eye for survival to come forth.

Also big investment banks refused to lend money to hedge funds to invest in Madoff because they had no evidence that he ever did any trading---BUT NOBODY CARED TO DROP A DIME ON THIS BASTARD! Let's see, big investment banks: Lehmans, Bear Stearn, Merrill Lynch, Citigroup and GOLDMAN SACHS????

In spite of their overall incompetence, the SEC nearly caught on, when they went after a feeder fund in 1992....1992.....Monica! Was this all about a girl, or a Ponzi scheme?

[Hawkowl]

65. Walls Street's Continuing Syndication Of Its Own "Secured" Debt Via Equity Markets

This is unbelievable and terrifying. The snake truly eating its tail.

"In April Zero Hedge discussed the potential conflict of interest of secured lenders providing equity financing to companies in which they are the primary secured lender, with a "debt repayment" use of proceeds, in essence using the raised equity to pay down the debt on which the underwriters themselves are on the hook for. Not surprisingly, this was all occurring in the context of REITs - the same companies that face a massive credit crunch as numerous CRE loans come due for refinancing in the 2011-2014 timeframe. It seems this game of "bait and switch" continues unabated.

The most recent and blatant example of this bait-and-switch occured a two days ago, on August 12, when REIT U-Store-It, ...raised $120 million of equity using underwriters Bank of America and Wells Fargo. From the offering prospectus " to use the net proceeds from the sale of the common shares offered by this prospectus supplement to repay existing indebtedness, including a portion of the outstanding balance of the revolving loans under our unsecured credit facility, and for general corporate purposes." While as noted above, we and others have written about this very real conflict of interest, this case comes with a spin."

http://www.zerohedge.com/article/walls-streets-continuing-syndication-its-own-secured-debt-equity-markets

So we have Bernake printing money fast enough to melt the presses, giving it to banks who multiply it by 10x under the fractional reserve system, using it to pump up the stock market which is then used to underwrite and sell equities in the companies which owe the banks and the proceeds used to pay down the indebtedness? This is really beginning to make my head spin.

[Demeter]

70. The Real Crash Will Be a Sight to Behold

we ain't seen nothing, yet. sigh.

[DemReadingDU]

77. like a global financial tsunami

:scared:

[truthisfreedom]

80. Kiting, in it's ultimate form.

[DemReadingDU]

81. video: High Frequency Trading

8/14/09 HFT For Beginners, appx 11.5 minutes
http://www.zerohedge.com/article/hft-beginners

[Hawkowl]

83. Doh!

You scooped me! :-)

[Hawkowl]

82. HFT, Flash trading for dummies

Outstanding video presentation on how the large investment banks (i.e; Goldfellas, the vampire squid) are using computers and high speed algorithms to front run, skim the liquidity rebates (think of the movie Office Space) and otherwise manipulate the stock markets.

It has been estimated that of all the recent trading activity in the stock markets, 70% is simply these HFT computers trading with each other!

http://www.zerohedge.com/article/hft-beginners

[DemReadingDU]

84. Hey!

If the vampire squid is doing this on the way up, manipulating to new highs, I shudder to think what HFT could do when the algorithm is changed to sell on the way down.

:nuke:

[mullard12ax7]

86. Recessions are over all over the world! Too bad nobody believes the lies.

I guess the entire culture of corruption that hasn't been addressed might have something to do with that. Go buy some gas, check out the rigged prices. Go buy some food, look at the smaller portions and genetically modified poison. Go get sick, see what happens. Get a loan, watch the tricks begin. Find a job, then watch it get axed. Watch the TV, nothing but lies and propaganda.

We either arrest people or we just keep getting worse. We let goddamn war criminals walk free and pretend it's better if we just forget about them, how delusional is that?

[tclambert]

89. And at closing time, the market is just about back to where it started Monday.

Major indices down about 1% for the day. A late surge (of manipulation?) brought them up a little from earlier levels.

Dow: -0.82%, Nasdaq -1.19%, S&P -0.85%.

Dow opened Monday at about 9326, closed today about 9321.
Nasdaq opened Monday about 1995, closed today about 1985.
S&P 500 opened Monday about 1005, closed today about 1004.

All that fluctuating about, and for the week, NO CHANGE. "It is a tale told by an idiot, full of sound and fury, signifying nothing."

[truthisfreedom]

99. And the futures... anyone looked at the futures lately?

As of 3:35AM Eastern,

DJIA INDEX 9,198.00 -123.00
S&P 500.... 991.20 -14.60
NASDAQ 100 1,595.50 -19.50

Cripes! I missed this... Nikkei drops over 3%?

[tclambert]

91. There's Value in Real Estate, if You Find Your Florida

by Paul Sullivan
Friday, August 14, 2009

provided by
The New York Times

The last thing most people are thinking of investing in right now is real estate. The collapse of residential values stung almost all homeowners. And the commercial market, from offices to shopping malls, is full of uncertainty as unemployment rises and consumer spending continues to be weak.

Yet there are those who argue that this is a once-in-a-generation opportunity to buy property. Greg Rand, managing partner at Better Homes and Gardens Rand Realty, a brokerage in the suburbs north of New York, even has a theory to guide investors. He calls it "house rich."

. . .

"Florida is in a storm right now," Mr. Rand said. "It's overdeveloped, overspeculated and overleveraged."

Yet, with 78 million baby boomers expected to retire in the next two decades, the state's long-term prospects are solid: a good proportion of them will want to be someplace warm and sunny when they stop working.

Mr. Rand is not alone in this. Some of the biggest players in real estate see opportunity around the country.

http://finance.yahoo.com/focus-retirement/article/107505/theres-value-in-real-estate-if-you-find-your-florida.html?mod=fidelity-buildingwealth

______________________________________


Had to share this one with you. Especially with Dr. Phool. It actually makes some sense, IF you are willing to wait ten years for your investment to pay off. Anybody? Anybody willing to wait that long? Anybody have money you can sit on for ten years?

[snot]

98. i personally think sellers may get yet more desperate in a year or two.