STOCK MARKET WATCH, Wednesday November 11

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday November 11, 2009

Bush Administration Officials Convicted = 1
Name(s): David Safavian

Bush Administration Officials Charged = 1
Name(s): Richard Lopez Razo

Financial Sector Officials Convicted since 1/20/09 = 11

AT THE CLOSING BELL ON November 10, 2009

Dow... 10,246.97 +20.03 (+0.20%)
Nasdaq... 2,151.08 -2.98 (-0.14%)
S&P 500... 1,093.01 -0.07 (-0.01%)
Gold future... 1,103 +1.10 (+0.10%)
10-Yr Bond... 3.47 -0.01 (-0.37%)
30-Year Bond 4.41 +0.01 (+0.27%)

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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. Market Observation

The Evidence Builds: Stocks are Topping
BY ROBERT MCHUGH

At this point we have an inter-market Bearish divergence between the Industrials and the S&P 500, the NASDAQ Composite, the NDX, and the Trannies. On Monday, the Industrials hit a new high for the rally from March 2009. The S&P 500, NASDAQ Composite, NDX and the Trannies did not. We believe a major top is coming, and soon, if it did not arrive Monday. Monday’s rally came on low volume, which is indicative of terminal rallies.

The Industrials rose 203.52 points Monday, closing at 10,226.94. NYSE volume was low on the rally at 81 percent of its 10 day average. Upside volume led at 95 percent, with advancing issues at 84 percent, with upside points at 99 percent, a 90 percent panic buying up day. S&P 500 Demand Power rose 12 points to 397, while Supply Pressure fell 8 points to 388, telling us the rally was strong but with a heaping helping from shorts covering. Monday’s rally was the large price move Friday’s small change in the McClellan Oscillator suggested was likely. The 15, 30 and 60 minute Full Stochastics are overbought, looking for at least a short-term decline.

Stocks are rising in their final wave up for the rally from March 2009, which when complete will be followed by a significant decline. This rally will finish the Ascending Expanding Wedge pattern in the S&P 500, so it could produce a spike rally toward the upper boundary. There have been decisive breaks below the bottom boundary lines of Rising Bearish Wedges for the Industrials, S&P 500, and NDX suggesting a major top is occurring now. The recent rally back to the underneath boundary of this pattern is similar to what we saw at the October 2007 top. We also see Bearish Divergences between prices and breadth, prices and volume, and prices and momentum indicators that we follow. The Weekly MACD indicators are topping and curling over. These are red flags warning not to trust the sustainability of this rally.

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

[Ghost Dog]

9. An Unprecedented "Double Bubble"

Despite the outright collapse of ABK and MBIA, two more failed financial gamblers today, investors continued to push stocks higher, solely on the backs of AAPL, GOOG, PCLN, and BIDU. Its been quite amazing that this is the first bubble in world history that was actually able to repeat itself within the span of 18 months. Kindleberger will have to re-write his "Manias, Panics and Crashes" book to document this absurdity.

What are the odds that the South Sea Bubble would have repeated itself in 24 months? How about the Tulip Mania repeating itself? Not a chance. But this time was different. The Fumble Managers who all piled Grandma's retirement money into AAPL, GOOG, PCLN, BIDU, etc. back in 2007 while the rest of the NDX was crumbling are at it again. Its all about chasing "winners" and following the top stocks on Investor's Business Daily, in todays chart-driven world. Why bother investing in anything else?

Let's check out the "Double Bubble" charts to see this amazing occurrence:

Charts... Comments...

/... http://www.zerohedge.com/article/unprecedented-double-bubble

[tclambert]

66. I don't really see the "double bubble" in those charts.

Maybe in the one for BIDU. But it's only half a bubble. The problem is it's never conclusively a bubble until AFTER the crash. Before the crash it could just be a rebound from previously excessive lows. I would expect a little of that after a recession. And, of course, a real recovery could look like the upward swing of a bubble.

Drawing conclusions from charts isn't very reliable compared to, say, Tarot cards.

[ozymandius]

2. no goobermental reports today n/t

[ozymandius]

3. Oil hovers near $79 amid rising US oil supplies

SINGAPORE – Oil prices hovered near $79 a barrel Wednesday in Asia as investors mulled rising U.S. oil inventories and a weaker dollar.
.....

U.S. oil inventories rose last week, the American Petroleum Institute said late Tuesday. Crude stocks increased 1.2 million barrels while analysts had expected a rise of 1.0 million barrels, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
.....

In other Nymex trading, heating oil was steady at $2.05 a gallon. Gasoline for December delivery fell 0.55 cent to $1.97 a gallon. Natural gas for December delivery was steady at $4.47 per 1,000 cubic feet.

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

[ozymandius]

4. China to guide yuan with eye on major currencies

BEIJING (Reuters) – China said on Wednesday it will consider major currencies in guiding the yuan, suggesting a departure from an effective dollar peg that has been in place since the middle of last year.

The reference to a new set of benchmarks for determining the value of the yuan holds out the possibility of a departure from recent practice, which has seen the currency held steady since mid-2008 around 6.83 per dollar.
.....

The comments come ahead of a visit to China next week by U.S. President Barack Obama, and amid growing pressure from other countries for Beijing to be more flexible in how it handles the yuan in the face of dollar weakness.

Ding Zhijie, a professor with the University of International Business and Economics in Beijing, who also provides advice to government, said the change in wording shows that Beijing is ready to end the de-facto peg to the dollar in place since mid-2008.

http://news.yahoo.com/s/nm/20091111/bs_nm/us_china_economy_pboc

[Ghost Dog]

11. Some more on China's economy here:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4142202

[ozymandius]

5. Senate Dems move to curb Fed's powers

WASHINGTON – Senate Democrats on Tuesday proposed stripping the Federal Reserve of its supervisory powers and creating instead three new federal agencies to police banks, protect consumers and dismantle failing institutions.

The 1,136-page bill, released by Senate Banking Committee Chairman Chris Dodd, would represent a significant shift in power in federal oversight of the U.S. market. The Fed has been a dominant figure in managing the economy, although many lawmakers blame the central bank for not doing enough to prevent last year's crisis.
.....

Other provisions in Dodd's bill would:

• Consolidate federal supervision of banks under a "Financial Institutions Regulatory Administration."

• Abolish the Office of the Comptroller of the Currency and the Office of Thrift Supervision, and strip the Federal Deposit Insurance Corporation and the Fed of their bank supervision duties.

• Create an "Agency for Financial Stability" that would enforce new rules and dismantle complex financial firms if they threaten the broader economy.

• Regulate privately traded derivatives, hedge funds and other private pools of capital so that regulators have a sense of how much risk is being assumed by financial firms.

• Impose new rules on investment rating agencies.

• Limit the Fed's ability to provide emergency loans to mostly healthy institutions, instead of failing firms.

http://news.yahoo.com/s/ap/20091111/ap_on_bi_ge/us_financial_overhaul

[ozymandius]

6. Job openings remain close to record-lows

WASHINGTON – Job openings are at rock-bottom levels, according to government and private surveys released Tuesday, a trend that could keep the unemployment rate high even as layoffs slow.

Small businesses in particular are reluctant to add workers as they struggle to obtain credit. Many are pushing their current employees to produce more. Economists say small businesses account for about 60 percent of new jobs.

Still, there are some pockets of hiring as demand for information technology and sales professionals grows, according to government reports and job search Web sites. And there are signs that companies are adding more human resources personnel, which could signal more hiring down the road.
.....

But overall, it's a tough time to be out of work. There are about 6.1 unemployed workers, on average, competing for each job opening, a Labor Department report shows. That's down slightly from 6.2 last month, the most since the department began tracking job openings nine years ago.

http://news.yahoo.com/s/ap/20091110/ap_on_bi_ge/us_job_openings

[Ghost Dog]

7. Geithner wants strong dollar, will tackle deficit

TOKYO (Reuters) - Treasury Secretary Timothy Geithner said on Wednesday he believes strongly in the need to maintain a strong dollar and said the United States was determined to get its budget deficit down.

The dollar's decline has been a source of concern in the export-heavy region, especially since top exporter China keeps its currency's value closely managed against the U.S. dollar and so felt less impact on prices for its exports than other Asian nations that let their currencies float freely.

"I believe deeply that it's very important to the United States, to the economic health of the United States, that we maintain a strong dollar," Geithner said in a meeting with Japanese reporters at the U.S. embassy.

The Treasury chief was visiting Japan before heading on Wednesday night to Singapore to join a meeting of finance ministers from the 21-nation Asia-Pacific Economic Cooperation forum (APEC) on Thursday. It was his first trip to Japan since assuming the post in January.

The dollar index, which measures the dollar's value against a basket of six major currencies, has fallen 7.6 percent this year and hit a 15-month low of 74.889 (^DXY - News) on Wednesday.

Geithner said the United States was well aware it must work to keep investors' confidence in U.S. economic policymaking.

"We bear a special responsibility for trying to make sure that we are implementing policies in the United States that will sustain confidence ... in investors around the world that as growth recovers and growth strengthens that we're going to bring our fiscal position back to a sustainable balance," he said.

The U.S. budget deficit soared to a record $1.4 trillion in the fiscal year that ended on September 30 and is expected to be about the same this fiscal year.

/... http://finance.yahoo.com/news/Geithner-wants-strong-dollar-rb-3786208956.html?x=0&.v=1

[Ghost Dog]

8. Dollar hits 15-month low, global stocks firm on rate view

Reuters - A man scratches his head as he looks at a stock quotation board outside a brokerage in Tokyo ...

LONDON (Reuters) - The dollar hit a fresh 15-month low and world stocks held near a three-week high on Wednesday after remarks from Federal Reserve officials reinforced the view that U.S. interest rates will remain near zero for some time.

Strong Chinese data on factory output and retail sales, along with forecast-beating results from Italy's biggest bank Unicredit (Milan:CRDI.MI - News) following upbeat reports from other banks, encouraged investors to buy risky assets.

...

The prospect of near-zero interest rates persisting has prompted investors to sell dollars for higher-yielding currencies, such as the Australian dollar, while keeping alive the momentum for a risk asset rally.

"Market volatility may remain high but I continue to believe we will see significant new highs across the board before the year-end," said Stephen Jen, managing director of macroeconomics and currencies at Bluegold Capital Management. "The Fed will not be in a hurry to tighten. With incremental growth both in the U.S. and the rest of the world being positive, and if the Fed remains easy, I believe risk assets will continue to rally."

/... http://finance.yahoo.com/news/Dollar-hits-15month-low-rb-992631005.html?x=0&.v=3

Great way to support the dollar. :shrug:

[Po_d Mainiac]

37. The only tool left in the shed is... talk

Raise rates or draw down the money supply and the Wall Street bubble bursts.

China may feel that they have hedged the dollar crash with commodities to the extent that the net outcome would be a push. If that's the case about the only player left to buy Treasury notes is the Fed.

When that happens it won't be an emperor walking down the street with his short hairs exposed, it will be Chopper and Turbo. :nuke:

[Ghost Dog]

48. Some more on China economy here:

Please do read, consider, contribute.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=102x4142202

Somehow, I don't think the Chinese crême de la crême are heading for their (dead end) equivalent of Wall Street.

nb. I find this discussion, today, also interesting... http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6988723

[AnneD]

14. If you believe......

clap your hands. Don't let the dollar die.

Meanwhile the autopsy on the economy could not be performed for all the smoke that was blown up the public's ass. Gee, did I just say that out loud?

[Demeter]

15. Is Timmy Going to Tax Someone With Money? Like GS Players?

Or is he just playing with us?

[natrat]

17. is there anyone in the world who takes him seriously, the perfect contra indicator

[Roland99]

32. I think Geithner has proven to be even more pathetic and useless than was Snow.

[Demeter]

34. And Much Less Honest

and more ignorant than W. who at least had an excuse.

[UpInArms]

33. ....

oh, timmeh, you are so funny!

[Ghost Dog]

52. Heh, heh.

:)

http://www.youtube.com/watch?v=f6gDeGdQ3rM&feature=related

(Note: Me, I pay great attention to the zeitgeist, the collective social psychology. Especially female psychology, with your permission, I hope).

:rofl:

Edit to add, by way of example: (Lennon, Jagger, Mitchell, ...): http://www.youtube.com/watch?v=BxEX__YXmDs&NR=1&feature=fvwp :eyes:

[AnneD]

56. Hubby has given up his investment say....

and has turned it over to me-says he can't beat female intuition. :spray: He is still in shock over our gold investments. The funds I had in overseas, I took and placed in a secure spot before the market crashed. After it crashed, I moved it in an index fund. I have done very well this year. Imagine how well I would have done if I spent more time at it. I am buying back my retirement time and will retire earlier than I thought.

GD you are always welcomed, pour a cup of Jo and sit a spell.

[Ghost Dog]

59. Thanks, AnneD. Looks like we're on a similar learning curve here.

:(

My lady and I are heading for the first time tomorrow at dawn off-island, out-of-Europe, local flight, to the nearest great historical city next door (first class, of course, ostensibly): Marrakech.

Will report back, if permitted...

http://www.youtube.com/watch?v=BmLQ5KM_kYU

... http://www.youtube.com/watch?v=23nmb5sCzQM

[ozymandius]

10. Ambac may file bankruptcy soon

Bond insurer Ambac Financial has warned bankruptcy is a distinct possibility, sending its shares plummeting more than 30% today.

What is intriguing about this pending bankruptcy is how this company escaped bankruptcy in 2008, was downgraded continually in 2009, yet just reported billions in profit 5 days ago. Now it warns of bankruptcy?
.....

But in November, Ambac was able to forestall the inevitable. On November 19th, MarketWatch reported:

"Ambac said late Wednesday that it commuted, or tore up, roughly $3.5 billion worth of guarantees on complex mortgage-related vehicles known as collateralized debt obligations. The company’s main bond insurance unit paid counterparties $1 billion in cash to settle the contracts.

The deal will improve the capital position of the bond insurance unit for rating agencies, Ambac said."

Later the insurance subsidiary eliminated its dividend to the parent company.

When the company rejected an unsolicited offer by Warren Buffett to reinsure $800 billion in municipal bonds insured by Ambac and MBIA in December, this was generally seen as a sign of strength. But, the company was holding on by a thread.

http://www.creditwritedowns.com/2009/11/ambac-may-file-bankruptcy-soon.html

[Ghost Dog]

13. MBIA Falls Most in Eight Months After Wider-Than-Expected Loss

Nov. 10 (Bloomberg) -- MBIA Inc., world’s largest bond insurer, fell the most in nine months after posting a bigger- than-expected third-quarter loss.

The company reported a net loss of $727.8 million, or $3.50 a share, after the end of regular trading yesterday. Analysts had anticipated a loss of $1.09 a share, based on the average of three estimates compiled by Bloomberg.

“This quarter is another one in which the continued weakness in the U.S. housing market and the economy has negatively impacted our financial results,” Chief Financial Officer Chuck Chaplin said today during a conference call about the third quarter.

MBIA fell 99 cents, or 21 percent, to $3.81 at 12:41 p.m. in New York Stock Exchange Composite trading, the biggest decline since Jan. 20. The shares are down 6.1 percent this year and 95 percent since December 2006.

Ambac Financial Group Inc., the world’s second-largest bond insurer, fell 15 cents, or 13 percent, to $1.35. Its shares dropped 21 percent this year.

MBIA was stripped of its top financial-guarantee credit ratings last year as claims on securities backed by mortgages and home-equity loans surged. The company says it expects to meet all of its existing claims, though its projections include recoveries from mortgage originators for loans improperly included as collateral for MBIA insured bonds, Chaplin said.

/. http://www.bloomberg.com/apps/news?pid=20601103&sid=ahCCExkY9Afo

[Demeter]

16. Schadenfreude! It's what gets the blood moving on a frosty morning

Tore up the CDOs, eh? They should be rewarded for that. Turning down Buffet was an error, apparently.

[Festivito]

12. Debt: 11/09/2009 11,990,022,541,364.79 (UP 1,143,739,673.61) (Mon)

(Up a little. Good day to all.)

= Held by the Public + Intragovernmental(FICA)
= 7,588,075,478,091.39 + 4,401,947,063,273.40
UP 9,587,108.80 + UP 1,134,152,564.81

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 308-Million person America.
If every American, man, woman and child puts in $3.25 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.74, ABOUT TEN BUCKS for a 1B$ 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 10 seconds we net gain another American, so at the end of the workday of the report, there should be 307,899,678 people in America.
http://www.census.gov/population/www/popclockus.html ON 11/07/2009 08:19 -> 307,879,272
Currently, each of these Americans owe $38,941.33.
A family of three owes $116,823.99. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 21 reports in the last 30 to 31 days.
The average for the last 21 reports is 4,486,821,388.40.
The average for the last 30 days would be 3,140,774,971.88.
The average for the last 31 days would be 3,039,459,650.20.
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$/day.
There were 174 reports in 253 days of Obama's part of FY2009 averaging 7.33B$ per report, 5.07B$/day so far.
There were 249 reports in 365 days of FY2009 averaging 7.57B$ per report, 5.16B$/day.
There were 28 reports in 40 days of FY2010 averaging 2.86B$ per report, 2.00B$/day.
Above line should be okay

PROJECTION:
There are 1,168 days remaining in this Obama 1st term.
By that time the debt could be between 13.6 and 18.0T$.
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)
11/09/2009 11,990,022,541,364.79 BHO (UP 1,363,145,492,451.71 so far since Obama took office.)

FISCAL YEAR DEBT CHANGE, Sep 30 prior year to Sep 30 named year:
(One "* " for each 40B$ reached)
FY1994 +0,281,261,026,873.94 ------------* * * * * * * WJC
FY1995 +0,281,232,990,696.07 ------------* * * * * * * WJC
FY1996 +0,250,828,038,426.34 ------------* * * * * * WJC
FY1997 +0,188,335,072,261.61 ------------* * * * WJC
FY1998 +0,113,046,997,500.28 ------------* * WJC
FY1999 +0,130,077,892,735.81 ------------* * * WJC
FY2000 +0,017,907,308,253.43 ------------WJC
FY2001 +0,133,285,202,313.20 ------------* * * C&B
01-WJC +0,053,598,528,417.78 ------------* WJC 31% of FY, 40% of FY-Debt
01-GWB +0,079,686,673,895.42 ------------* GWB 69% of FY, 60% of FY-Debt
FY2002 +0,420,772,553,397.10 ------------* * * * * * * * * * GWB
FY2003 +0,554,995,097,146.46 ------------* * * * * * * * * * * * * GWB
FY2004 +0,595,821,633,586.70 ------------* * * * * * * * * * * * * * GWB
FY2005 +0,553,656,965,393.18 ------------* * * * * * * * * * * * * GWB
FY2006 +0,574,264,237,491.73 ------------* * * * * * * * * * * * * * GWB
FY2007 +0,500,679,473,047.25 ------------* * * * * * * * * * * * GWB
FY2008 +1,017,071,524,649.92 ------------* * * * * * * * * * * * * * * * * * * * * * * * * GWB
FY2009 +1,885,104,106,599.30 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * B&O
09GWB +0,602,152,152,000.60 ------------* * * * * * * * * * * * * * * GWB 31% of FY, 32% of FY-Debt
09-BHO +1,282,951,954,598.70 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO 69% of FY, 68% of FY-Debt
FY2010 +0,080,193,537,853.00 ------------* * BHO
Endof10 +0,731,766,032,908.63 ------------* * * * * * * * * * * * * * * * * * Linear Projection

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
10/20/2009 +000,084,506,561.85 ------------*******
10/21/2009 +000,260,615,642.06 ------------********
10/22/2009 -054,881,746,021.15 -
10/23/2009 -000,105,634,856.79 ---
10/26/2009 -000,680,933,964.04 --- Mon
10/27/2009 +000,626,474,250.98 ------------********
10/28/2009 +000,798,039,832.64 ------------********
10/29/2009 -019,769,093,363.09 -
10/30/2009 +031,206,306,633.43 ------------**********
11/02/2009 +091,997,621,963.98 ------------********** Mon
11/03/2009 +000,189,596,548.58 ------------********
11/04/2009 -000,084,777,046.07 ----
11/05/2009 +008,148,647,528.82 ------------*********
11/06/2009 -000,072,128,565.19 ----
11/09/2009 +000,009,587,108.80 ------------****** Mon

57,727,082,254.81 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power JUST BEFORE fiscal year end.
Bush admin borrowed $962,245,245,654.01 in those last 124 days in office crossing two fiscal years.
$360,093,093,653.42 in last 12 days of FY2008, and $602,152,152,000.59 in subsequent 112 days before leaving office.

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=4140650&mesg_id=4140664

[Demeter]

18. Development: US fails to measure up on 'human index' (july 2008)

http://www.guardian.co.uk/society/2008/jul/17/internationalaidanddevelopment.usa

Despite spending $230m (£115m) an hour on healthcare, Americans live shorter lives than citizens of almost every other developed country. And while it has the second-highest income per head in the world, the United States ranks 42nd in terms of life expectancy.

These are some of the startling conclusions from a major new report which attempts to explain why the world's number-one economy has slipped to 12th place - from 2nd in 1990- in terms of human development.

The American Human Development Report, which applies rankings of health, education and income to the US, paints a surprising picture of a country that spends well over $5bn each day on healthcare - more per person than any other country.

The report, Measure of America, was funded by Oxfam America, the Conrad Hilton Foundation and the Rockefeller Foundation. It shows each of the 11 countries that rank higher than the US in human development has a lower per-capita income.

Those countries score better on the health and knowledge indices that make up the overall human development index (HDI), which is calculated each year by the United Nations Development Programme.

And each has achieved better outcomes in areas such as infant mortality and longevity, with less spending per head.

Japanese, for example, can expect to outlive Americans, on average, by more than four years. In fact, citizens of Israel, Greece, Singapore, Costa Rica, South Korea and every western European and Nordic country save one can expect to live longer than Americans.

There are also wider differences, the report shows. The average Asian woman, for example, lives for almost 89 years, while African-American women live until 76. For men of the same groups, the difference is 14 years.

One of the main problems faced by the US, says the report, is that one in six Americans, or about 47 million people, are not covered by health insurance and so have limited access to healthcare.

As a result, the US is ranked 42nd in global life expectancy and 34th in terms of infants surviving to age one. The US infant mortality rate is on a par with that of Croatia, Cuba, Estonia and Poland. If the US could match top-ranked Sweden, about 20,000 more American babies a year would live to their first birthday.

"Human development is concerned with what I take to be the basic development idea: namely, advancing the richness of human life, rather than the richness of the economy in which human beings live, which is only a part of it," said the Nobel laureate economist Amartya Sen, who developed the HDI in 1990.

"We get in this report ... an evaluation of what the limitations of human development are in the US but also ... how the relative place of America has been slipping in comparison with other countries over recent years."

The US has a higher percentage of children living in poverty than any of the world's richest countries.

In fact, the report shows that 15% of American children - 10.7 million - live in families with incomes of less than $1,500 per month.

It also reveals 14% of the population - some 40 million Americans - lack the literacy skills to perform simple, everyday tasks such as understanding newspaper articles and instruction manuals.

And while in much of Europe, Canada, Japan and Russia, levels of enrolment of three and four-year-olds in pre-school are running at about 75%, in the US it is little more than 50%.

The report not only highlights the differences between the US and other countries, it also picks up on the huge discrepancies between states, the country's 436 congressional districts and between ethnic groups.

"The Measure of America reveals huge gaps among some groups in our country to access opportunity and reach their potential," said the report's co-author, Sarah Burd-Sharps. "Some Americans are living anywhere from 30 to 50 years behind others when it comes to issues we all care about: health, education and standard of living.

"For example, the state human development index shows that people in last-ranked Mississippi are living 30 years behind those in first-ranked Connecticut."

Inequality remains stark. The richest fifth of Americans earn on average $168,170 a year, almost 15 times the average of the lowest fifth, who make do with $11,352.

The US is far behind many other countries in the support given to working families, particularly in terms of family leave, sick leave and childcare. The country has no federally mandated maternity leave.

The US also ranks first among the 30 rich countries of the Organisation of Economic Cooperation and Development in terms of the number of people in prison, both in absolute terms and as a percentage of the total population.

It has 5% of the world's people but 24% of its prisoners.

[Demeter]

19. Report: AIG CEO ready to quit over pay constraints

http://finance.yahoo.com/news/Report-AIG-CEO-ready-to-quit-apf-226992369.html?x=0&sec=topStories&pos=1&asset=&ccode=


After just three months as head of battered insurer American International Group, Robert Benmosche has threatened to leave his post as he struggles to deal with heavy government oversight and restrictions on what the bailed-out company wants to pay employees, according to a published report.

Citing unnamed people familiar with the matter, The Wall Street Journal reported online late Tuesday that Benmosche told AIG's board he was "done" with the job, although he reportedly is reconsidering his stance in the face of the board's dismay.

According to the people, the former MetLife CEO is frustrated with the constraints of leading a company majority-owned by the government, the paper said. The Journal said Benmosche has complained to AIG's board about the outcome of the Treasury Department's pay review which slashed pay for a number of AIG executives by 91 percent from 2008.

When the credit crisis hit last year, the U.S. government rescued AIG from the brink of collapse with a loan bailout package worth up to $182.5 billion in exchange for an 80 percent stake in the insurer. It is one of seven big companies the Treasury Department ordered to cut top executives' salary and bonuses in half, starting this month. Under the plan, cash salaries for the top 25 highest-paid executives will be limited in most cases to $500,000 and, in most cases, perks will be capped at $25,000.

For the already struggling companies, the plan has introduced concerns about so-called brain drain, as the executives targeted by "pay czar" Kenneth Feinberg rank among the most talented and productive at their companies.

Benmosche took over from Edward Liddy in August, making him AIG's third CEO in less than a year. Under a package approved by Feinberg over the summer, the AIG CEO will get compensation of about $10.5 million.

The New York-based company last week said it was profitable for the second straight quarter as its core insurance operations continue to stabilize, and reported that the amount of its government financial assistance dropped by 4 percent during the period.

Its results got a lift from the increasing value of investments it still holds that soured last year and helped drive it to the brink of collapse. But Benmosche has warned that earnings will remain choppy as the company executes its restructuring plan. AIG is spinning off two major life insurance businesses -- American International Assurance Co., or AIA, and American Life Insurance Co., also known as ALICO -- as it looks to repay the government.

[rfranklin]

24. Buh-bye...

I volunteer for that pay and those perks. I couldn't do any worse in running the company into the ground. Then again, my cat could do just as well for the price of a Fancy Feast.

[Demeter]

27. And Take that Family Sympathizer Blankfein with you, buddy!

Take the whole nest of vipers!

[UpInArms]

45. EXCLUSIVE: AIG CEO defends holiday, slams "lynch mob" attacks

what a suckbag

http://www.reuters.com/article/wtUSInvestingNews/idUSTRE57Q24J20090827?sp=true

DUBROVNIK, Croatia (Reuters) - Wearing flip-flops, khaki shorts and a green polo shirt, the new chief executive of bailed-out insurer American International Group Inc says he's getting a lot of work done from his massive villa overlooking the Adriatic.

"People criticize me for being on vacation. I actually started work a week before I was actually supposed to," Robert Benmosche told Reuters in an interview. "I do have conference calls every day, I have all my information sent here. I can work here as well as in the office in New York."

Benmosche, 65, previously the CEO of MetLife Inc, the largest U.S. life insurer, came out of retirement to become AIG's CEO on August 10.

His holiday, which started only a few days after he took up the job at AIG, has raised some eyebrows in the United States, where financial executives have faced unrelenting criticism over high compensation and anything that smacks of a privileged lifestyle during the economic crisis.

Executives at companies bailed out by the government, like AIG, have had to be particularly careful.

Benmosche said that he regularly keeps up with AIG business via telephone and the Internet, helped by the villa's array of satellite technology, and had three conference calls scheduled for Wednesday.

He had returned to the villa in a city famed for its medieval walls and crystal clear waters because he said he wanted to oversee the harvest of his vineyards to the north and spend time with his children and grandchildren.

He plans to return to work at AIG's offices in New York after Labor Day on September 7.

<snipping to where you really want to puke>

2001 for about $1 million, and has since spent several times that amount in rebuilding the house and gardens. He used many imported materials, including Italian tiles, and added Viking stoves, an 18th century French tapestry, a well-stocked wine cellar and a huge 1922 Persian rug.

The terraces stretch across 160 or 170 feet of sea front, where he keeps a 135 horsepower boat parked in front.

"Every bathroom is like a piece of art," he said while showing off his master bathroom with his wife Denise. "Women go wild when they walk in here."

The room had an oversize wall-to-wall mirror, Jacuzzi, large glass-enclosed shower and plenty of natural light.

The Brooklyn-born Benmosche goes for a four-mile (6 kilometer) walk every day, frequently checks mail and stock prices on the Internet, and gets an in-house massage several times a week.

...:grr:...

[rfranklin]

47. The sense of entitlement is astounding...

The workload is grueling...three conference calls in one day!

[Ghost Dog]

49. Hey, I can sympathise. I still (25 years later) work much better from here

in the Canary Islands than I used to there in the City of London.

And, I'm much saner.

... edit to add: Actually... Darling... Actually, where's that damned servant with my G&T and the next snort, actually?

[Demeter]

20. Foreign Contributions and the Supreme’s Overdue Decision on Campaign Funding by michaelcollinsefn

http://coto2.wordpress.com/2009/11/07/foreign-contributions-and-the-supremes-overdue-decision-on-campaign-funding/

The Supreme Court of the United States will soon announce a major decision on our lightly controlled system of campaign funding. Will it retain some limitations on corporate influence or will the court blow the lid off and cause a perpetual flood of unrestricted corporate contributions?

An additional outcome may surprise and shock the public.

If the Supreme Court overturns the lower court’s decision, foreign nationals, corporations, and governments with partial ownership of U.S. corporations will, in effect, end up contributing to and influencing U.S. candidates in federal elections.

The Supreme Court surprised many when it agreed to hear an appeal of a lower court ruling that enforced key sections of the Bipartisan Campaign Reform Act of 2002 (McCain-Feingold) — Citizens United v. Federal Elections Commission (FEC).

In January 2008, the Federal District Court, District of Columbia upheld an FEC action that barred Citizens United, a right wing nonprofit corporation, from airing an extended attack on Hillary Clinton called Hillary: The Movie. Citizens United is headed by David Bossie, a well known political enemy of the Clintons. Citizens’ lead counsel, Ted Olsen, is an alumnus of the infamous 1990’s Clinton bashing Arkansas Project.

The lower court found The Movie violated provisions of McCain-Feingold since some funding for the movie came from the general treasury of Citizens United, rather than a segregated account for political action, e.g., a Political Action Committee (PAC). The Movie had the sole purpose of convincing viewers that Clinton was unfit for office, making it an example of electioneering communications – the overriding purpose of which is to advocate for the election or defeat of a candidate. And The Movie was planned for broadcast both 30 days prior to Democratic primaries and 60 days prior to the general election (had Clinton won the nomination), blackout periods for electioneering communications.

In its appeal, Citizens argued that broadcast restrictions in McCain-Feingold should be overturned to allow unrestricted electioneering communications funded directly from corporate treasuries.

But the appeal also served as a vehicle for lifting virtually any ban on corporate giving. In 1990, the Supreme Court ruled that corporate funding of campaigns from general funds could be restricted. The heart of the decision is found here:

“ are justified by a compelling state interest: preventing corruption or the appearance of corruption in the political arena by reducing the threat that huge corporate treasuries, which are amassed with the aid of favorable state laws and have little or no correlation to the public’s support for the corporation’s political ideas, will be used to influence unfairly election outcomes. Justice Marshall, Austin v. Mich. Chamber of Comm., 1990

Lead counsel for Citizens United, Ted Olsen, argued that “Austin was wrongly decided and should be overruled.” He counters with another case that claimed,”First Amendment’s protection against governmental abridgment of free expression cannot properly be made to depend on a person’s financial ability to engage in public discussion.” Ted Olsen, Merits Brief, p. 30, Sept. 9

This challenge to the Austin decision is the true threat within the Trojan horse argument over broadcast restrictions on political hit pieces. The goal of this appeal is nothing less than the legal treatment of corporations as the equal of individual citizens and lesser groups in the political process resulting in an even greater advantage for corporations to control elections.



“We are the World”

During oral arguments before the court, Olson argued that McCain-Feingold unlawfully restricts the First Amendment rights of U.S. corporations. Justice Ruth Bader Ginsburg had this exchange with Olson:

MR. OLSON: What the Court has said in the First Amendment context, New York Times v. Sullivan, Rose Jean v. Associated Press, and over and over again, is that corporations are persons entitled to protection under the First Amendment.

JUSTICE GINSBURG: Would that include –

MR. OLSON: Now, Justice –

JUSTICE GINSBURG: Would that include today’s mega-corporations, where many of the investors may be foreign individuals or entities?

MR. OLSON: The Court in the past has made no distinction based upon the nature of the entity that might own a share of a corporation.

JUSTICE GINSBURG: Own many shares?

MR. OLSON: Pardon?

JUSTICE GINSBURG: Nowadays there are foreign interests, even foreign governments that own not one share but a goodly number of shares.

Citizens United v. Federal Elections Commission, Oral Arguments, pp. 4, 5, Sept. 9, 2009

Justice Ginsburg created a poison pill by putting on notice any Supreme Court majority that overturns the lower court decision: your actions will allow foreign funding for U.S. campaigns. Any foreign entity could simply exercise an existing or newly acquired ownership position in a U.S. corporation to demand services from that corporation’s latest wholly owned candidate.

The current bans on direct corporate contributions and contributions from foreign entities would become meaningless. The influence of the “corrosive and distorting effects of immense aggregations of wealth” obtained through the control of puppet politicians would submit all of us to the vicissitudes of balance sheets and the salary and bonus demands of board chairmen all over the world (to an even greater degree than we now experience).

Supremes Green Light Foreign Money in U.S. Elections! How well will that fly with citizens in the current political climate? Does the Supreme Court even care?

Class of 2000 Reunion



Two alumni of the Bush effort to stop the Florida 2000 recount, freezing in place various voting rights violations and preventing any real judicial review of a flawed election, are reunited in this case. Chief Justice Roberts was recognized for his contributions to election chaos as then Florida Governor Jeb Bush’s legal advisor. His contributions were less than helpful. Ted Olson represented George W. Bush in the Supreme Court case that stopped the recount. He also served as a key strategist for George W. Bush’s Florida 2000 recount efforts.

How coincidental that Chief Justice Roberts reached out to his Bush campaign 2000 alumnus Olson by agreeing to hear a case that surprised many when it was selected for the Supreme Court docket.

How ironic that the case presents the opportunity to bring corporate funding into U.S. politics in a way that would end any pretences of democracy as we know it. History waited just nine years to repeat itself.

N.B. Wouldn’t a reasonable person conclude that Fox News violates the McCain-Feingold Act on a regular basis? Link

This article may be reproduced in part or in whole with attribution of authorship and a link to this article.

[Ghost Dog]

28. "vicissitudes of balance sheets and the salary and bonus demands of board chairmen all over world"

Nice one.

"Any foreign entity could simply exercise an existing or newly acquired ownership position in a U.S. corporation to demand services from that corporation’s latest wholly owned candidate."

Beautiful.

But, hell, if you/they want an Empire, then we mere Provincials/Colonials want to have a say... preferably, as individuals rather than as corrupt corporations.

[Demeter]

55. Peons. It Means EXACTLY What It Sounds Like

[Ghost Dog]

64. That's what we're all thinking.

So, that means... Hang on (going out there to have a quick look at the zeitgeist)... uh, OH YEAH: http://www.dailymotion.com/video/x2r1zl_new-york-12-night-on-earth-jarmusch_shortfilms

Ummm... http://www.youtube.com/watch?v=6USU93KPSUc

Ok. Take this: http://www.youtube.com/watch?v=oMiCtSRmun8
http://www.youtube.com/watch?v=UUXQTV7JM2I
http://www.youtube.com/watch?v=tX_ZCJWijtc

[Demeter]

21. Intel

http://www.ft.com/cms/s/3/49fe1250-c974-11de-a071-00144feabdc0.html?ftcamp=rss

The cause of plodding European bureaucrats has been joined by the fiery New York attorney-general Andrew Cuomo. On Wednesday he filed an antitrust lawsuit, which Intel will defend, alleging a systematic campaign of illegal conduct designed to protect the chipmaker’s dominance of the PC microprocessor market. Following a €1.1bn ($1.6bn) fine in May from the European Commission (which Intel is appealing against), and previous rulings in Japan and Korea, the company faces fresh scrutiny of its market power.

Share prices for Intel and competitor Advanced Micro Devices barely reacted. The problem for AMD, which is set to face Intel in a Delaware courtroom in March, is that legal victories offer only consolation, and perhaps the chance of a pay-out to help pay down debt. The period when the company had a clear technological advantage and opportunity to make a dent in Intel’s market share of about 70 per cent has passed.

Intel, which has $11bn of net cash sitting on its balance sheet, and outspends AMD on research by a factor of more than four, may be embarrassed by Mr Cuomo’s claims. But even if, as alleged, it is shown to have forced customers to guarantee market share levels in return for cash rebates, the structure of the industry will probably remain unchanged.

Greater regulatory assertiveness, however, may prompt a subtle shift in the tech world. The expectation has traditionally been that size brings a persistent advantage that gradually moves each area of the industry toward one or two big companies. But Brussels may block Oracle’s takeover of Sun Microsystems; meanwhile Google’s deal with book authors has prompted scrutiny of the search company. As with the rest of the business world, tech must come to terms with ever more official meddling.

[Ghost Dog]

50. Do not underestimate Constable/Detective Plod,

Pink Panthers, Monty Pythons and the like...

[Demeter]

22. Robot hamsters hottest toys this Christmas

http://www.ft.com/cms/s/0/deafb282-cc94-11de-8e30-00144feabdc0.html

Five battery-operated robotic hamsters costing about $10 each have become the must-have toy of Christmas 2009, with parents in North America and the UK snapping them up as soon as they arrive on retailers’ shelves.

Zhu Zhu Pets, sold in the UK as Go Go Pets, are the hottest toy of the season, according to Jerry Storch, chief executive of Toys R Us, the retailer, a phenomenon on a par with Teenage Mutant Ninja Turtles, the smash hit of Christmas 1987.

The interactive hamsters, Mr Squiggles, Patches, Chunk, Pipsqueak and Num Nums, respond to touch with squeeks and noises, and can be set to run about randomly in “explore” mode, or to “coo and chirp” calmly when held.

They also react to separately sold accessories that include a toy house, a bed and a small car with sound effects such as teeth cleaning and toilet flushing noises, televison sounds, disco music and yawning.

Mr Storch said initial demand for the toys was so strong that Toys R Us had not listed them in its Christmas toy catalogue to avoid disappointing customers.

“Word of mouth alone stimulated demand to the point that if we advertised it would only be bad for business,” he said.

Walmart, the largest US retailer, kept the hamsters off its shelves until this weekend.

The range – which includes various separately sold accessories – was launched this summer by Cepia, a small company based in St Louis, Missouri. It was founded in 2004 by Russell Hornsby, an entrepreneur whose previous success was a battery-powered sprayer.

Mr Hornsby said the hamsters spent only between 30 seconds and three minutes on the shelf before being bought.

He had shipped about 6m units and expected to ship another 6m by the end of the Christmas period. He estimated sales of $300m to $400m in the coming 12 months as the product range expanded.

“It’s not just hamsters,” Mr Hornsby said. “We are bringing out the clans: chipmunks, squirrels, hedgehogs, rabbits ... We have all sorts of cute things coming.”

An active secondary market for the hamsters has developed on Ebay, with Mr Squiggles and Num Nums changing hands this week for more than $20.

Jon Diver, managing director of Character Group, which distributes the toys in the UK, said “sell-through has been quite incredible” and that extra supplies have been air-freighted in from China.

“The opening price point is very keen, the pets come to life and it’s magical; it moves, it has personality and it captures a child’s imagination,” he said.

Character Group’s shares have risen about 50 per cent on the London Stock Exchange since the toys were launched this summer.

“People ask us how does this happen,” Mr Hornsby said of the hamster boom “The answer is that if knew that, we’d have a hit every week.”


WHO NEEDS A HAMSTER--I'VE GOT A TRIBBLE!

[AnneD]

57. I can top that...

went to the RENFEST this year and got something I always wanted and needed......A Rat's Ass.

Yes ma'am. I carry it in my pocket now every day. When I worked, I never gave a rat's ass what the higher ups said because I didn't have one. Now I take more of an interest because I have some 'skin in the game' as it were.

Just knowing I can stroke that furry little butt when I am stressed out helps me calm down. That guy can make a mint with proper marketing. I love my rat's ass.

I know we can't give endorsement so I hope you can forgive my enthusiasm. Let's just say it personally works for me.

[Demeter]

23. Solar power’s prospects rise in the east

http://www.ft.com/cms/s/0/a9b005c8-cd4d-11de-8162-00144feabdc0.html

The Arab world may be rich in oil and gas by international standards but even its hydrocarbon resources are finite. In some states, such as Bahrain, Jordan, Dubai and Oman, energy shortfalls are either evident or are looming.

Moreover, the countries of the Gulf Co-operation Council, because of a history of energy subsidies and price controls, amount to one of the world’s most energy-intensive regions.

So consideration of the renewable alternatives to oil and gas (and nuclear, which is also being contemplated) is not a matter for idle speculation.

Last year, the United Arab Emirates committed itself to taking 7 per cent of its energy needs from renewable sources by 2020. That equates to about 1.5GW of energy – no small commitment – says Sami Khoreibi of Enviromena Power Systems. This privately held company has built a 10MW solar plant that is contributing to powering Abu Dhabi’s Masdar City, the carbon-neutral, “green” technology centre.

In most of the world, hydropower is a main source of alternative energy. In the absence of large rivers and being surrounded by mostly calmer seas, this is not a runner in most of the Middle East. And wind power in the GCC is uneconomic because winds are not strong enough, NCB Capital says in Thinking Beyond Oil, a recent report.....

The economics of solar power generation mean that as things stand, the private sector is unlikely to be attracted to large-scale research and investment. Instead, a government response is needed and in the case of Masdar, it is forthcoming.

Mr Kotilaine believes water desalination is likely to provide the leading application for which the development of solar power on a large scale can be used. This is because demand for water is so huge and so out of step with industrial and demographic trends, and also because positioning a solar energy project next to a desalination plant provides synergies.

A question mark over solar power in the Middle East arises from desert sand clogging, and thereby limiting, the effectiveness of photo-voltaic panels. But Enviromena has been using dry brushes to clean the panels regularly.

“What we are finding is that with a very simple maintenance programme, that does not impact the performance nearly to the degree that a lot of sceptics assumed it would,” says Mr Khoreibi, who adds that his plant is performing as planned.

[Demeter]

25. Plea for deal on recovery of looted funds

http://www.ft.com/cms/s/0/da18dd32-cd63-11de-8162-00144feabdc0.html

Officials in leading world economies are squabbling about an international anti-graft deal that campaigners and the World Bank say is crucial to efforts to recover funds looted by corrupt leaders and salted overseas.

Western nations including Britain have been battling China and a number of other countries over a United Nations anti-corruption convention whose terms are supposed to be finalised at a summit in Qatar this week, say people

The UN agreement is widely seen as key to the international fight against graft as it is global in reach and focuses partly on practical methods to achieve the return of assets stolen from poor countries.

Antonio Maria Costa, executive director of the UN Office on Drugs and Crime, urged member states to do a deal to prevent the convention becoming “a historic opportunity badly missed”.

He said: “I think it would be a major disappointment to a lot of people – taxpayers, victims of corruption and, of course, us – if no agreement was reached.”

Disputes around the Qatar meeting had focused on the way compliance with the convention was re-viewed and monitored, Mr Costa said.

Countries including China, Pakistan and Egypt had expressed concerns over the degree of non-governmental group involvement in the process, how intrusive it would prove and how public the results would be, said other people familiar with the talks. No representatives of the three countries named could be reached for comment.

Mr Costa declined to discuss individual countries, saying only that he did not want the convention to become a convoy that travelled “at the speed of the slowest ship”.

“Different societies have different reactions to this,” he said. “So all of this will have to be taken into account.”

One reason the convention is seen as an important tool is that it has been ratified by 141 countries, against only the few dozen industrialised nations signed up to the Organisation for Economic Co-operation and Development’s anti-bribery treaty. Another is that the convention is much wider in scope than the OECD agreement, laying down mechanisms for international law enforcement co-operation, information exchange and asset recovery in future cases.

The convention has won the backing of senior business leaders, 24 of whom – including Jeffrey Immelt of General Electric and Tianwen Huang of Sinosteel Corporation – have signed a letter calling for the Doha meeting to set up a credible review process.

Ngozi Okonjo-Iweala, a managing director at the World Bank, which is co-leading an international project to recover stolen official funds, said nervousness about the convention review process was understandable, but should not be allowed to block efforts.

THEY ARE GIVING US THE WEAPON TO TAKE BACK THEIR LOOTING! I CANNOT BELIEVE THIS! THE END OF GOLDMAN, THE ZOMBIES, AND THE MULTINATIONALS IS WITHIN OUR GRASP!

SOMEBODY PINCH ME.

[Demeter]

26. Food self-sufficiency ‘is a nonsense’ (SAYS AGRIBUSINESS--IN A PANIC)

http://www.ft.com/cms/s/0/bad4d152-cd53-11de-8162-00144feabdc0.html

By Javier Blas in London


The drive towards self-sufficiency in response to last year’s food crisis will fail, a top executive at Cargill has warned, adding that the idea that countries “can be self-sufficient in every single food is a nonsense”.

NO, JUST IN ENOUGH TO KEEP THE COUNTRIES ALIVE, IDIOT!

The warning by the world’s largest trader of agricultural commodities comes ahead of the UN World Summit on Food Security in Rome, the first since 2002. The summit was prompted by the surge in the price of staples such as rice and wheat, which last year hit record highs, sparking food riots in countries from Bangladesh to Haiti.

Countries in Asia, Africa and the Middle East have moved towards self-sufficiency in response to the crisis, either by boosting agricultural production at home through subsidies and import tariffs or acquiring overseas farmland.

The so-called “farmland grabs” gained notoriety after an attempt by South Korea’s Daewoo Logistics to secure a huge chunk of farmland in Madagascar, which contributed to the collapse of the African country’s government.

Paul Conway, senior vice-president at Cargill, said: “Promoting a free and open trading system whereby countries can produce what they are best able ... and surpluses can be traded across international boundaries is the right way to go.

“Not all countries can single-handedly be self-sufficient in all food commodities,” he added, also dismissing attempts to outsource agriculture production overseas.

Mr Conway warned that host countries were likely to impose export bans in the event of a local or global food crisis. In a rare interview, he said food security had become a key global challenge. “It is a high, high political item,” said Mr Conway, who is in charge of Cargill’s food security initiatives.

“Food security, which was not on the agenda of anyone but agriculture ministries only three years ago, is now very central to governments,” he said, noting that the interest was at its highest level since late 1970s or early 1980s.

In the US, the food security agenda, usually left to the Department of Agriculture, has become one of secretary of state Hillary Clinton’s strategic projects.

Archer Daniel Midland, Bunge, Cargill and Louis Dreyfus – the world’s top food trading houses – are at the centre of agricultural trade and their wide business and government relationships allow them to see changes in food policy.

“The whole world had got very relaxed about food security and, yes, probably unduly complacent,” Mr Conway said.

He warned that rising populations and wealth in developing countries and governments’ targets for biofuel production were likely to continue to put upward pressure on food prices for years to come.

Mr Conway said the world’s food security would be improved if countries reached a deal on the Doha trade round.

The Food and Agriculture Organisation forecasts that global trade of food staples will surge to 300m tonnes by 2050, up from the current 135m tonnes.

AND NOW A MUSICAL INTERLUDE, COURTESY OF MAMA CASS:

http://www.youtube.com/watch?v=lXfll2ICon0

[Demeter]

29. GM chief promises cash for new-look Opel

http://www.ft.com/cms/s/0/61d84b56-ce48-11de-a1ea-00144feabdc0.html

General Motors on Tuesday promised a more independent Opel and vowed to support its European unit with fresh money as the US carmaker tried to calm the fury sparked by last week’s decision to keep the unit....

He said the US carmaker would provide a “reasonable and sizeable” portion of the restructuring costs for Opel and Vauxhall, rather than seek 100 per cent government aid.

GM said it needed €3bn ($4.5bn) to restructure Opel and aimed to get some of this funding from several European governments. A person close to GM said “roadshows” with those governments would start next week....


ANYBODY CARE TO PLACE A BET ON WHETHER GM BACKTRACKS ON THIS, TOO? ANYONE? BUELLER?

[Demeter]

30. Left to sift through GM’s wreckage

http://www.ft.com/cms/s/0/a3602ade-ce30-11de-a1ea-00144feabdc0.html

Al Koch has an unenviable job. As chief executive of Motors Liquidation Company, the “bad” part of General Motors that remains under Chapter 11 protection, he must determine the fate of 200 properties and more than half a million contracts abandoned by the Detroit carmaker during its swift journey through bankruptcy court.

Mr Koch, vice-chairman of AlixPartners, the restructuring consultancy hired to run MLC, told the Financial Times he was putting together a 10-year plan under which the unwanted assets would be “either sold, demolished or donated, if they can’t be sold”.

Describing his mission as “a daunting task”, Mr Koch disclosed that MLC had received about 1,000 claims a day, mainly related to product liability issues involving GM vehicles, taxes and environmental issues.

“It is like taking a sip from the fire hose,” he says, adding that “we were surprised by the volume we have had to deal with”.

The “new” GM emerged from Chapter 11 on July 10 under the ownership of the US and Canadian governments, the United Auto Workers union and a group of bondholders.

The unwanted assets and rejected contracts were bundled into MLC, whose shares trade on the Pink Sheets over-the-counter market. The US Treasury has lent $1.18bn to fund the wind-up.

Alix will receive a 15 per cent cut on any money returned to the Treasury. In exchange for this incentive and to minimise a political backlash, it agreed to reduce its hourly fees. It has assigned about 80 employees to MLC.

Mr Koch said that the asset sales were unlikely to raise significant revenue, but delays could be costly in terms of maintenance, insurance and property taxes.

“It’s not so much about how much we’re going to get as about how much we’re going to pay,” he said, estimating the cost of maintaining a mothballed car plant at $2m-$3m a year.

The unwanted properties are mostly in North America but include a powertrain plant in Strasbourg, France. Half the properties are leased, and about 25 of the remainder are sizeable plants, office buildings and warehouses.

Numerous enquiries have already been received. “The idea of buying lots of assets without much money is appealing,” Mr Koch said, citing one prospective buyer who offered to pay $26bn for more than two dozen properties, with all but $10m coming from the government.

Only one significant deal has been concluded so far, the sale of a 3.2m sq ft mothballed assembly plant in Delaware to California-based Fisker Automotive, which plans to build up to 100,000 electric cars a year there.

The company received a $528m loan in September under an Energy Department programme to encourage green technology in the automotive industry.

Delaware also pitched in with a $12.5m loan and a $9m grant. Fisker put up $18m.

Mr Koch is clear that the high-profile nature of GM’s bankruptcy was a great help. The intervention of President Barack Obama helped bring the UAW onboard with labour concessions. Mr Koch goes so far as to describe the swift restructuring as “a private equity deal on steroids”.

Much of MLC’s work over the past three months has focused on determining costs and schedules for environmental remediation of the properties. The estimated cost of this work has dropped from the original $536m to under $450m.

Mr Koch contrasts the different cultures between the US and Europe over restructuring, noting that while the Obama administration has pushed for plant closures, European governments have fought tooth and nail to preserve them.

He adds: “The auto industry seems like the airline industry: they keep expanding until no one makes any money.”

[tclambert]

60. MTLQQ still selling at 0.57

which is about 57 cents too high. It only exists as a fiction of the bankruptcy court. Yet people keep trading the stock.

[tclambert]

67. My son's company, Magna International, an auto supplier, has done pretty well the past few days.

He actually works for a tiny subsidiary of Magna. Magna announced unexpected profits for the 3rd quarter, and their proposed deal to buy Opel fell through. Investors seemed to like BOTH of those occurrences.

The subsidiary my son works for designs electric and hybrid electric cars. If I could invest in just that subsidiary, I'd jump at the chance. This is part of why I would like to see big companies broken up.

[Demeter]

31. Madoff investor Picower leaves $200m to wife

http://www.ft.com/cms/s/0/ba7c41e0-ce43-11de-a1ea-00144feabdc0.html

Jeffry Picower, the long-time investor and friend of Bernard Madoff who died last month, has left hundreds of millions of dollars and an assortment of jewellery and other valuables including diamond cufflinks to his family, friends and charity.

The details, spelt out in Picower’s will, came as discussions continued over a settlement with Irving Picard, the trustee leading the effort to recover “fake profits” made from Mr Madoff’s fraud.

Picower, who died in Florida, was one of the biggest winners of Mr Madoff’s “Ponzi” scheme. Picower drowned accidentally in his swimming pool after suffering a heart attack.

In court documents, Mr Picard has claimed that at least $5bn of the $6.7bn Picower withdrew from his accounts with Mr Madoff’s brokerage firm was money that belonged to other people.

Mr Picard has filed a number of such “clawback” lawsuits against individuals he claims knew or should have known about the fraud.

In his will, Picower left his wife $200m and an assortment of jewellery, paintings, silver, china and cars as well as property in Palm Beach, Florida.

He also appointed her as chairwoman of a new charitable foundation that would be funded with assets from his estate.

He left $25m to his daughter, Gabrielle, and $10m to his long-time assistant, April Freilich, who was also left his gold link “good luck” bracelet and “snake” coffee table.

About 19 other family members and friends were left with a total of more than $6m.

Picower’s wife, Barbara, said in a statement that her husband had been committed to reaching “a fair and generous settlement” with Mr Picard.

“Jeffry was determined that we would put Madoff behind us, reclaim our good name and reverse the damage Madoff’s fraud,” she said. The negotiations with Mr Picard cover a settlement range of $2.4bn to $7bn, according to William Zabel, Picower’s attorney.

Mr Picard, who has recovered about $1.4bn on behalf of Mr Madoff’s victims so far has estimated that about $21.2bn had been lost through the Ponzi scheme.

Mr Zabel said that even after any settlement with the Madoff trustee and bequests to the family, “the substantial assets acquired by Mr Picower through his many successful investments over the years (separate from Bernard Madoff) will be available and sufficient to fund the new charitable foundation”.

www.ft.com/madoff

[AnneD]

58. Our theme for today...

Stayin Alive by the Bee Gee's. So crack out the white polyester leisure suit and the platforms baby.

[tclambert]

61. How does a lawsuit proceed when the defendant is incompetent to defend himself because he's dead?

And "drowned accidentally in his swimming pool after suffering a heart attack?" I might like Mr. Monk to look into that. "Where's his towel? He went swimming but didn't bring a towel? It's like he never planned to get out of the pool."

[UpInArms]

35. dollar watch

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

Last trade 74.870 Change -0.151 (-0.19%)

Oil May Rise on Chinese Data, Gold Technicals Point Lower

http://www.dailyfx.com/forex/fundamental/forecast/daily/2009-11-11-1026-Oil_May_Rise_on_Chinese.html

Oil may rise after China, the world's second-largest consumer of crude, reported better than expected industrial production data, while technical positioning suggests gold may be setting up for a turn lower from record highs.

Commodities – Energy
Oil Range Intact But Prices May See Gains on Chinese Industrial Production Data

Crude Oil (WTI)       $79.09        +$0.04       +0.05%

Oil prices may see some upward momentum within the familiar $76.80-80.50 range after China, the world’s second-largest crude consumer, reported that industrial production surged 16.1% in the year to October, the fastest pace of expansion in 17 months. That said, the data may not produce significant follow-through considering China also reported that new loans amounted to just 253 billion Yuan in the same period, the lowest in a year and substantially smaller than the 370 billion that economists expected ahead of the release. The drop in borrowing suggests Shanghai is starting backtrack on the loose lending practices that policymakers mandated amid last year’s credit crunch, hinting that the abundant liquidity that had fueled the Asian giant’s swift rebound from the global recession may no longer do so in the months ahead. Naturally, this has significant negative implications for crude demand and risk appetite in general. A third-quarter earnings announcement from department store chain Macy’s Inc late into European hours may prove to have a secondary affect on prices via the conduit of broad trends in risk sentiment, with most investors now fretting about the ability of the global economy to sustain growth on the back of private consumption after fiscal stimulus is withdrawn.



Commodities – Metals
Gold Technical Positioning Points to Bearish Reversal Ahead

Gold       $1114.43       +$8.60       +0.78%

Gold prices look positioned to reverse lower from record highs, with technical positioning revealing a Rising Wedge bearish reversal chart formation bolstered by negative divergence on the RSI momentum gauge. Fundamentally, a catalyst for bearish momentum may be disappointing earnings from UK gold miner Avocet Mining Plc, who reported a net loss of $4.1 million in the first half of the year compared with a profit of $22.4 million a year prior.

Silver       $17.47       +$0.13       +0.75%

Silver continues to consolidate, oscillating around $17.50. Fundamentally, the key drivers to watch include the impact from Chinese economic data released earlier, earnings from Avocet and the direction of risk sentiment in general.



...more...

U.K. Labor Market Improving, But BoE Remains On Alert With Recovery On Hard Path

http://www.dailyfx.com/forex/fundamental/daily_briefing/daily_pieces/top_fx_headlines/2009-11-11-1303-U_K__Labor_Market_Improving__But.html

Fundamental Headlines

• Dodd Unveils Measure On Financial Overhaul – Wall Street Journal
• U.S. Mortgage Program Gathers Steam – Wall Street Journal
• China economic recovery accelerates – Financial Times
• Fed Faces Biggest Blow to Authority, Independence in Dodd Banking Measure – Bloomberg
• King Says BOE Still Has `Open Mind' on Bond Purchases, Won't End Stimulus -Bloomberg

GBP/USD – U.K. jobless claims rose by 12,900 versus expectations of 20,000, which was the least amount in 18 months signaling that government efforts are fueling growth. Despite the slower pace of job losses the claimant count rate rose to the highest level since 1997 at 5.1%. The BoE released their quarterly inflation report and expects price growth to remain below their 2% target for most of the next three years. A “hard path” to recovery and the resulting spar capacity in the economy will continue to put downward pressure on prices. The central bank also signaled that they continue to keep an open mind toward additional quantitative easing and that there is no limit to the total of asset purchases. The report has significantly lowered interest rate expectations with markets now expecting only 69 bps of rate hikes versus 95 bps a week ago according to overnight index swaps.

...more...

[UpInArms]

36. Gold rises towards $1,120/oz as dollar slides

http://www.reuters.com/article/businessNews/idUSTRE5A80MQ20091111?feedType=RSS&feedName=businessNews

LONDON (Reuters) - Gold hit record highs near $1,120 an ounce on Wednesday as a dollar index .DXY fell to 15-month lows, with expectations that a U.S. economic recovery will be erratic seen keeping American interest rates low for a while.

The metal is now poised for more gains, analysts said, with the weak dollar helping gold build on a rally that began last week after the IMF sold 200 tonnes of bullion to India's central bank, raising the prospect of more official sector buying.

Spot gold hit a high of $1,117.05 an ounce and was at $1,114.80 at 1154 GMT versus $1,105.30 late on Tuesday.

U.S. gold futures for December delivery on the COMEX division of the New York Mercantile Exchange rose $12.70 to $1,115.20 an ounce.

"The way gold keeps accelerating away from its previous highs is quite incredible," said Saxo Bank senior manager Ole Hansen. "Continued momentum is driving prices higher. Whenever we see new highs, we see more momentum buying."

The dollar index fell a quarter of a percent to a 15-month low of 74.831 and the euro rose to a two-week peak within sight of last month's 2009 high of just over $1.5060.

Analysts said the dollar was smarting after a chorus of Fed officials said on Tuesday that high unemployment and sluggish consumer spending were risks to recovery in the U.S. economy which may keep the Fed funds rate low.

...more...

[Demeter]

38. Is It a Bubble, or a Sign?

I'm inclined to think it's a sign. There is no other refuge left except farmland, which needs attention all the time. There's no other way to make a profit without working left, and no other way to retain value of one's savings, unless you want to speculate in oil and get caught in a downdraft.

[UpInArms]

42. I think it's fear

fear of bad times coming and staying for a very long time.

The last time gold soared so high was back in the 80s and if you look at where it started from then and where it's starting from now, you can see that unless and until we get our fiscal house in order, we are in for a long bumpy ride.

(jmho)

[DemReadingDU]

46. Fear

In these troubled times, people invest in things that are perceived as safe. The high price of gold indicates to me the large amount of fear. No matter what happens, there will always be value to gold. The price may increase or decrease, but gold never loses it perceived value.

[Ghost Dog]

51. Definitely.

http://www.youtube.com/watch?v=yBilW9cPfDA

[tclambert]

62. But why is there value to gold? It doesn't taste very good.

I swear Earth humans never get over their fascination with shiny rocks.

[ret5hd]

65. Tastes better than rectangular sheets of multi-colored paper.

[Ghost Dog]

70. With love:

http://video.google.es/videosearch?q=dylan%20dylan%20mr%20jones%20youtube&oe=utf-8&rls=org.mozilla:es-ES:official&client=firefox-a&um=1&ie=UTF-8&sa=N&hl=en&tab=wv#

[Po_d Mainiac]

53. India surprised the world by taking a chunk.

Now the expectation is for China to do the same. And why not? Can't be any worse of an investment than the US debt they've acquired.

[UpInArms]

44. China hints at resumption of yuan appreciation

http://www.reuters.com/article/bondsNews/idUSSP46642420091111

BEIJING, Nov 11 (Reuters) - China sent its clearest signal yet that it was ready to allow yuan appreciation after an 18-month hiatus, saying on Wednesday it would consider major currencies, not just the dollar, in guiding the exchange rate.

In its third-quarter monetary policy report, the People's Bank of China departed from well-worn language on keeping the yuan CNY=CFXS "basically stable at a reasonable and balanced level". It hinted instead at a shift from an effective dollar peg that has been in place since the middle of last year.

"Following the principles of initiative, controllability and gradualism, with reference to international capital flows and changes in major currencies, we will improve the yuan exchange rate formation mechanism," the central bank said in a 46-page monetary policy report.

The comments, published just days before a visit to Shanghai and Beijing by U.S. President Barack Obama, set out the possibility of a return to exchange rate appreciation that began with a landmark July 2005 revaluation.

The yuan strengthened by nearly 20 percent against the dollar until concern over the impact of the global financial crisis prompted Beijing to hit the brakes in the middle of last year to protect exporters.

...more...

[Demeter]

39. Realizing the Fraud of Economic Recovery By Bill Bonner

The Dow rose 200 points yesterday, bringing it only about 75 points below the 10,300 level. Why is the 10,300 mark important?

It's not really...it's just the point where this bounce will equal the bounce following the crash of '29. No reason in particular that this bounce should be the same as the one 80 years ago. But no reason it shouldn't either.

Gold rises with the stock market. The yellow metal hit a new record over $1,100 yesterday. Why is that that important? Well, it's not important either. But gold still has another $1,000 or so to go before it equals the last bubble peak in gold, set in 1980 - on an inflation- adjusted basis.

The point is, there's plenty of room on the upside for gold...and not much room left on the upside for stocks...

Stocks are going to be hit hard when people realize that the recovery is a fraud. When will that happen? We don't know. But another big wave of foreclosures might be the thing that sets it off.

“The Second Wave Begins…”

This was the title of a report over the weekend from John Hussman. The gist of it is that the long-awaited ‘second wave’ of foreclosures has, perhaps, finally begun.

First, many of the Top 50 metro areas in the US are reporting “sharp increases in foreclosure activity.

“Rising unemployment and a new variety of mortgage resets continued to gradually shift the nation’s foreclosure epicenters in the third quarter away from the hot spots of the last two years and toward some metro areas that had avoided the brunt of the first foreclosure wave,” said James J. Saccacio, chief executive officer of RealtyTrac. “While toxic subprime mortgages drove much of that first wave of foreclosures, high unemployment and exotic Alt-A and Option ARMs are spreading the foreclosure flood to more metro areas in 2009.”

Hussman:

“While the news itself is no surprise in the sense that we have expected and written about this situation repeatedly in recent months, the phrase ‘sharp increases in foreclosure activity’ is notable in the context of widespread views that credit difficulties are abating. Below is a reminder of where we stand in relation to the reset curve. This news of a shift in the character of foreclosure activity comes precisely in tandem with the beginning of the predictable second wave. The pleasant lull in the reset schedule is decidedly behind us.



“The mortgages certainly do not reset at Treasury bill yields or even at standard spreads over LIBOR. Instead, they reset to a ‘premium’ spread above those rates. That ‘yield spread premium’ is precisely what the homeowners agreed to in return for the undocumented loan, and is particularly obnoxious at the point of reset if the mortgage itself is underwater (loan amount in excess of home value). Given that these mortgages were written during the last stages of the housing boom, at the highest prices, it is reasonable to assume they now sport very high loan-to-value ratios.”

So, there you go.

If Hussman is right, we’ll soon see real estate prices take another tumble.

[Demeter]

40. Water Makes the World Go Around

http://dailyreckoning.com/getting-china-clean-water/

"China is the largest importer of soybeans and has been since 2000," wrote Chris Mayer, our resident value-investing hound, in yesterday's issue of The 5-Minute Forecast. "China was once the largest exporter of soybeans, but flipped to a net importer in 1995. It may well be impossible for China to meet its demands for soybeans by producing more of its own. Passport Capital, an astute hedge fund, estimates that in order to grow enough soybeans to become self-sufficient, China would need to cultivate an area about the size of Nebraska.

"That looks impossible against China's arable land base, which has been in decline since 1988 - this despite the fact that China's subsidizes agriculture. Another reason is the low level of water resources in China. (See the nearby chart 'Who Has Water... And Who Doesn't.') Soybeans require a lot of water - 1,500 tonnes of water for one tonne of soybeans.



"This chart is telling. Who has lots of water? Brazil. So it is no surprise to discover that the increase in demand for soybeans from China has largely been met by increasing soybean acreage planted in Brazil. (Brazil is the second-largest exporter of soybeans in the world, behind the United States and ahead of Argentina and Paraguay.)

"The easiest way for China to get around its water shortage is to import soybeans. By importing soybeans, Passport calculates that China is effectively importing 14% of its water needs...

"So now we are in a position to connect some dots. China's increasing population and affluence will drive its soybean imports. These imports will come mainly from Brazil. And Brazil, as it converts more arable land to producing farmland, will need a lot of potash and phosphate. What is true of soybeans is also true of wheat and corn and rice and other agricultural commodities. We'll need more of all of them. And all of them face the same challenges for water and land. All of them require lots of fertilizer."

[tclambert]

63. At least Michigan is safe in the water department.

Surrounded by the Great Lakes, don'tcha know. Everything else about the state's economy has been draining away, but we got the water, baby!

[Demeter]

69. And We Are By God Keeping It

Sorrry, Tansy.

[Demeter]

41. Continuing Deflation in the “Real Economy” By Bill Bonner

http://dailyreckoning.com/continuing-deflation-in-the-real-economy/

Financiers have the world’s financial system in a “doom loop,” says the Bank of England. We’ve thought so ourselves. The bankers take money from the government and use it to speculate, not to lend. “Excess” reserves are at a record high as consumer credit continues to decline.

Most people find it both galling and absurd to see the bankers getting $10 million bonuses while there is 10% unemployment. Here at The Daily Reckoning, it’s just a matter of curiosity. You’d think there would be more wage competition to drive down bankers’ compensation. Why doesn’t Goldman go to an unemployment line and make an offer…

“Any of you guys want to earn a $9 million bonus?”

Surely there would be a few takers. And Goldman would save $1 million.

Of course, we’re joking. Banking is not a trade you can pick up just like that. Borrowing from the Fed at 1%…lending back to the Treasury at 4%…hey, it must take a few days of training to be able to turn around money like that.

On the other hand, there are periods when speculating for a big bank is a breeze. Over the last 7 months, for example, there was almost no way fed-financed traders could lose money. They borrowed dollars – the new carry-trade funding currency – at next to zero interest. It didn’t matter what they did with it…they could trade it for Brazilian reals…or buy stocks in Singapore…or buy gold. Almost everything went up against the dollar.

Institutional investors – such as those managing money for banks – are judged on how well they do against the benchmarks, the averages, not on how much money they make or how many losses they avoid. If their colleagues are making money, they have no choice. They have to get in the game too.

So, they’re in a “doom loop,” where they continue to bid up asset prices – even at the beginning of a depression.

Meanwhile, over in the real economy…the deflation continues. David Rosenberg:

“It is like a magic show – the US economy is somehow out of recession with both employment and consumer credit outstanding still in full-fledged contraction mode.

“In September, total consumer credit fell $14.8bln making it the eighth month in a row of debt repayment – an unprecedented string of declines. Over this period, the amount of consumer credit (not including mortgages) that has come out of the system has totaled $163bln at an annual rate (or -6.3% at an annual rate). Looking at the fact that total household debt still exceeds long-turn norms of 60% by a factor of more than two, we are still in the early stages of a secular credit contraction that could well end up seeing another $5 trillion of debt collapse. This is a highly deflationary process; it will take time; and while we are bullish on gold and commodities strictly on global supply-demand imbalances, bonds remain a very good place because deflationary episodes provide solid real yields to investors.”

Let’s see. We’ve tried several ways to gauge how long it will take to de-leverage the private sector (which is another way of figuring how long this depression will last). At 6% a year – assuming private sector has about 2 times as much debt as it should have – it will take about 7 years to get down to a more comfortable level?

Did we do the math right? Well, who knows? But every time we do it, we come up with about the same answer – 7 to 10 years, more or less.

But it’s not that simple. Because as the private sector de-leverages the feds try to prevent it…while they leverage up the public sector. This is bound to stretch the whole thing out…and bound to lead to some serious bust-ups.

[Demeter]

43. Major League Reckoning By Dan Denning

http://dailyreckoning.com/major-league-reckoning/

11/10/09 Melbourne, Australia – Now there’s a real decoupling. Friday’s unemployment figures came out in America. They showed that 8.2 million Americans have lost their job since the GFC began in 2007. The official unemployment rate (the one that under-measures actual unemployment) is at 10.2% and growing.

Stocks rallied on this news.

Employment is said to be a lagging indicator. Economists tell you it’s the last thing to recover from a recession. Businesses don’t begin hiring until after they are sure the worm has turned in the economy. But right now, there is a pretty big decoupling between the stock market’s verdict on the economy (it’s all good, man) and the employment market’s verdict (it sucks, man).

Of course, a flaccid job market is not all that hinders the world’s largest economy. Far from it…

The supply of new US debt is growing even faster than the Congress makes plans to spend the money. The US Treasury is auctioning off $81 billion in new debt this week. It will sell $40 billion in three-year notes on Monday, $25 billion 10-year notes on Tuesday, and $16 billion in 30-year bonds on Thursday (which is pretty ambitious).

You have to wonder who is willing to loan money to the United States government – given the state of its fiscal and monetary policies – for thirty years at below 5%. But the Treasury is anxious to auction as much long-term debt now as it can, locking in what it believes are low rates. This is another way of saying the Treasury thinks rates will rise (creditors will ask for higher rates when lending to Uncle Sam).

In the report from the Treasury’s borrowing committee to the Secretary, the committee said it was getting a wee bit worried that the maturity schedule of the Treasury debt portfolio could be in trouble if rates go up. Specifically, it wrote that, “The potential for inflation, higher interest rates, and roll over risk should be of material concern.”

Perhaps this is why the Treasury and the Fed are considering whether to “move out on the interest rate” curve and try and set rates for longer-term debt. If the market is going to push them up, the Fed will have to push them down (as it has been doing anyway with its purchase plans). Rules are made to broken!

Take the statutory US debt ceiling for example. The Treasury’s borrowing committee writes that, “Based on current projections, Treasury expects to reach the debt ceiling in mid- to late- December. However, the government’s cash flows are volatile, and forecasting a precise date is difficult. Treasury is working closely with Congress to pass legislation to increase the debt ceiling. We will keep financial market participants apprised of developments as the debt outstanding approaches the statutory limit.”

In other words, the jackasses in the US Congress will have to pass a new law allowing the Treasury to borrow more. This would be comical if it weren’t so disgraceful. US monetary authorities continue to tell the world’s savers that the US standard of living is not negotiable, even if it means increasing public sector debt to over 100% of GDP.

But the world’s creditors may not be in the mood to negotiate anyway. We think the rise in gold is one example of creditors deciding there are better things to do with their money. And in the meantime, take a look at the graph below from the Quarterly Refunding Statement of the Treasury’s Office of Debt Management. It’s a doozy!




Source: US Treasury Office of Debt Management, Quarterly Refunding Statement Charts, Nov 2, 2009

Sorry about the size. We had to reduce the chart to get the whole thing in. In case you can’t read the fine print, it says that in the next five years, there will 73 days on which more than $20 billion in Treasuries mature and 46 days on which more than $30 billion in Treasuries mature. That’s 119 days of major league reckoning.

Normally, that debt is simply rolled over as a new (or often the same) buyer refinances it. But what do you think will happen in the next five years? The US will be borrowing more and more and probably at higher rates. Our guess? It won’t be good for the dolla

[Roland99]

54. Credit card issuers share their pain with users

Credit card issuers share their pain with users
http://www.msnbc.msn.com/id/33829687/ns/business-the_new_york_times/

Already, banks are shifting to a model in which a smaller pool of Americans will be eligible for credit cards, and customers with cards will probably pay more for the privilege through annual fees and higher interest.

Meanwhile, the banks are in the process of shedding customers considered too risky. That means tens of thousands of Americans will no longer be able to splurge on Nike gym shoes or flat-screen televisions unless, of course, they have enough cash to pay for them.

...

In the 12 months that ended in September, the number of Visa, MasterCard, American Express and Discover card accounts in the United States fell by 72 million, according to David Robertson, publisher of The Nilson Report, an industry newsletter. There are 555 million accounts still in the marketplace, he said.

In roughly the same time period, banks lowered credit limits by 26 percent, to $3.4 trillion, from $4.6 trillion, according to an analysis of government data by Foresight Analytics

*Sharing* the pain? More like off-loading it.

[mullard12ax7]

68. 10 states going broke, sounds like a great economy to me!

Buy BUY BUY! DOW 10,000! Obama has ended all wars! Everyone has health care now! zzzzzzzzzzzzzzzzzzzzzzzzzzzz, snore, cough, wake up for a minute and realize it IS reality, it wasn't a nightmare.