STOCK MARKET WATCH, Monday, September 19, 2011

[Pale Blue Dot]

Source: du

STOCK MARKET WATCH, Monday September 19, 2011

AT THE CLOSING BELL ON September 16, 2011

Dow 11,509.09 +75.91 (+0.66%)
Nasdaq 2,622.31 +15.24 (+0.58%)
S&P 500 1,216.01 +6.90 (+0.57%)
10-Yr Bond... 2.01 -0.04 (-.00%)
30-Year Bond 3.27 -0.05 (-1.42%)

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Market Conditions During Trading Hours

Euro, Yen, Loonie, Silver and Gold

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Handy Links - Market Data and News:Economic Calendar    Marketwatch Data    Bloomberg Economic News    Yahoo! Finance    Google Finance    Bank Tracker    
Credit Union Tracker    Daily Job Cuts

Handy Links - Economic Blogs:
The Big Picture    Financial Sense    Calculated Risk    Naked Capitalism    Credit Writedowns
Brad DeLong      Bonddad    Atrios    goldmansachs666    The Stand-Up Economist

Handy Links - Government Issues:
LegitGov    Open Government    Earmark Database    USA spending.gov

Handy Links - Videos:
The Coming Collapse of the Middle Class    Charlie Rose talks with Roubini    Charlie Rose talks with Krugman
    William Black: This Economic Disaster    Bill Moyers with Kevin Drum and David Corn

Bush Administration Officials Convicted = 2
Names: David Safavian, James Fondren
Dishonorable Mention: former House majority leader, Tom DeLay

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

Financial Sector Officials Convicted since 1/20/09 = 12

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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

[Pale Blue Dot]

1. Today's report

Sep 19 10:00 NAHB Housing Market Index Sep 15 15 15

Read more: http://www.briefing.com/investor/calendars/economic/#ixzz1YOWqN87X

[Pale Blue Dot]

2. Oil falls to below $87 amid stronger US dollar

SINGAPORE – Oil prices fell to below $87 a barrel Monday in Asia as investor concerns about Europe's debt crisis fueled a stronger U.S. dollar.

Benchmark oil for October delivery was down $1.12 at $86.84 at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. Crude dropped $1.44 to settle at $87.96 on Friday.

In London, Brent crude for November delivery was down 22 cents at $112.00 on the ICE Futures exchange.

The euro has weakened this month amid growing fears that a possible debt default in Greece could trigger similar moves in Portugal, Ireland, Italy and Spain as well as a banking crisis. A stronger dollar makes commodities such as oil more expensive for investors with other currencies.

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

[Demeter]

6. gas acdtually came down this weekend

[xchrom]

22. UPDATE 1-EU Commission wants Turkey, Cyprus to show restraint

http://uk.reuters.com/article/2011/09/19/eu-turkey-cyprus-idUKLDE78I05P20110919

BRUSSELS, Sept 19 (Reuters) - The European Commission told Turkey and Cyprus on Monday to show restraint in a row over gas exploration in the Mediterranean and work towards solving a long-standing dispute over northern Cyprus.

A standoff between Ankara and Nicosia deepened on Monday when Turkey, a candidate for EU membership, called on the Greek Cypriot government to halt immediately gas exploration work off Cyprus. It said its navy might need to escort Ankara's energy exploration ships in the region.

The Turkish warning followed a new round of anti-Cyprus rhetoric in Ankara on Sunday when Turkey's deputy prime minister said Turkey would freeze relations with the European Union if it went ahead and gave Cyprus the rotating EU presidency next year.

A spokeswoman for EU foreign policy chief Catherine Ashton said there were no plans to change the schedule of which EU member takes the helm of the 27-member bloc.

[Pale Blue Dot]

3. U.S. Stock Futures Decline as Investors Await Whether Greece Will Default

U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will drop after posting the third-biggest weekly gain since 2009, amid concern that Europe’s debt crisis is worsening.

Citigroup Inc. (C) and Bank of America Corp. (BAC) declined more than 2 percent in German trading as a gauge of European lenders dropped 2.9 percent. Alcoa Inc. (AA), the biggest U.S. aluminum producer, fell 2.2 percent as base metals declined.

S&P 500 futures expiring in December lost 2 percent to 1,188 at 10:18 a.m. in London. The benchmark index surged 5.4 percent last week, the most since the period ended July 1. Contracts on the Dow Jones Industrial Average retreated 184 points, or 1.6 percent, to 11,262 today.

Greece’s ability to avoid default hangs in the balance this week as international monitors get set to assess whether Prime Minister George Papandreou can meet the conditions of rescue loans. The Greek leader canceled a U.S. visit that was to begin yesterday, saying he needed to remain in the country for a “critical” seven days.

http://www.bloomberg.com/news/2011-09-19/u-s-stock-futures-decline-as-investors-await-whether-greece-will-default.html

Here we go again.

[DemReadingDU]

4. down -142 @ 7:15 am

[bread_and_roses]

5. "Middle Class Death Watch -- 33 Frightening Economic Developments"

I can't even bring myself to read beyond the first page of this - that alone is too grim. While I disavow* the "American" notion that "each generation should be 'better off' than the last" the spectre of hungry and homeless children makes my blood run cold.
*"disavow" at least in the conventional sense of having more and more consumer goods - now, if "better off" meant a healthier "commons" - in equality, education, health care, environment - that would be a different story.

http://www.alternet.org/economy/152457/middle_class_death_watch_--_33_frightening_economic_developments/

Amped Status / By David DeGraw

Middle Class Death Watch -- 33 Frightening Economic Developments
Downward mobility, homelessness spreading to the middle class, 200,000 public employees laid off? Here are some frightening trends to keep an eye on.

... The study… found that nearly a third of Americans who were part of the middle class as teenagers in the 1970s have fallen out of it as adults… its findings suggest the relative ease with which people in the U.S. can end up in low-income, low-opportunity lifestyles — even if they started out with a number of advantages.

... Homelessness could spread to middle class, Crisis study warns

“The economic downturn and the government’s deep cuts to welfare will drive up homelessness over the next few years, raising the spectre of middle class people living on the streets, a major study warns. The report by the homelessness charity Crisis says there is a direct link between the downturn and rising homelessness as cuts to services and draconian changes to benefits shred the traditional welfare safety net.”

[Demeter]

7. William Black: Why Nobody Went to Jail During the Credit Crisis

http://neweconomicperspectives.blogspot.com/2011/09/william-black-why-nobody-went-to-jail.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed:+EconomicPerspectivesFromKansasCity+%28Economic+Perspectives+from+Kansas+City%29&utm_content=Google+Reader

PODCAST AND TRANSCRIPT

[Demeter]

8. Payday Loans Are Dead! Long Live Payday Loans!

http://www.nakedcapitalism.com/2011/09/payday-loans-are-dead-long-live-payday-loans.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

While in theory short-term loans can be a boon to cash-strapped individuals, in practice, the usurious interest of payday loans result in many borrowers falling into a debt treadmill. The Pentagon was so concerned about the way that payday lending could wreak havoc with the lives of combat personnel that it restricted the rates that could be charged to military personnel to 36%. The industry howled that rules would drive payday lenders out of the business of serving the armed forces (they had previously been targeting bases). I suspect that result was a feature, not a bug.

In 2008, the Wall Street Journal reported on how payday lenders targeted the elderly. This extract gives you some insight into the business model:

The crowd represents the newest twist for a fast-growing industry — lenders that make high-interest loans, often called “payday” loans, that are secured by upcoming paychecks. Such lenders are increasingly targeting recipients of Social Security and other government benefits, including disability and veteran’s benefits. “These people always get paid, rain or shine,” says William Harrod, a former manager of payday loan stores in suburban Virginia and Washington, D.C. Government beneficiaries “will always have money, every 30 days.”

The law bars the government from sending a recipient’s benefits directly to lenders. But many of these lenders are forging relationships with banks and arranging for prospective borrowers to have their benefits checks deposited directly into bank accounts. The banks immediately transfer government funds to the lenders. The lender then subtracts debt repayments, plus fees and interest, before giving the recipients a dime.

As a result, these lenders, which pitch loans with effective annual interest as high as 400% or more, can gain almost total control over Social Security recipients’ finances….

An analysis of data from the U.S. Department of Housing and Urban Development shows many payday lenders are clustered around government-subsidized housing for seniors and the disabled…

But some industry critics say fixed-income borrowers are not only more reliable, they are also more lucrative. Often elderly or disabled, they are typically dependent on smaller fixed incomes and are rarely able to pay off their loans quickly. “It’s not like they can work more hours,” says David Rothstein, an analyst at Policy Matters Ohio, an economic research group in Cleveland. “They’re trapped.”

The latest sighting, via the Associated Press (hat tip April Charney) is that bigger, more reputable-looking banks are offering payday loans, but predictably calling them something else, in much the way that the term “escort service” is meant to imply something more refined than “prostitution”. From the Clarion Ledger:

Perhaps muttering, if you can’t beat ‘em, join ‘em, big banks are now aping the payday lending industry and offering short-term loans at rates that once were called usurious.

The banks are not calling them payday loans and say there are safeguards that distinguish them from payday loans. But, it’s still a short-term note. Wells Fargo, for example, offers its loans for direct deposit customers. As The Associated Press has reported, it says customers can only borrow up to half their direct deposit amount or $500, whichever is less. Its fees are cheaper too, at $7.50 for every $100 borrowed.

That still amounts to a 261 percent annualized interest rate over the typical pay cycle. The amount of the advance and the fee are automatically deducted from the next direct deposit.

The article does point out that Mississippi has put restrictions on payday loans. The maximum loan is $400 and the charges are limited to an equivalent of an interest rate of 572% a year. Since there appears to be no restriction on how many loans a consumer can have at any time, this legislation doesn’t cut it as a fig leaf.

If you watched Congresscritters grilling Elizabeth Warren in July, several pressed her on whether she would use the CFPB’s power to ban products. She ducked the question. There is something very diseased in our society when a public official can’t cite the Pentagon’s stance and say there are interest rates that are intrinsically damaging to consumers and therefore should not be permitted. A loan with an effective annual interest rate of over 50% is the financial version of an exploding toaster.

[Demeter]

9. Deal reached on EU economic governance laws

http://euobserver.com/19/113639

After months of fraught negotiations, a deal has been reached on six new laws - the so-called Six-Pack - designed to keep eurozone member states' budgets in check and to prevent a repetition of the current debt crisis. The agreement, hammered out by European Parliament and Polish EU presidency and European Commission officials late on Wednesday (14 September), still has a few formalities to complete before it becomes EU law. It will come up for discussion by eurozone finance ministers at an informal gathering in Poland, beginning LAST Friday. A final meeting of parliament, presidency and commission delegates is expected Monday to tie up loose ends. MEPs will then vote on the agreement in a plenary session at the end of September.

Under the deal, sanctions for countries that run up an excessive budget deficit will become easier to impose, though are not as automatic as some in the parliament would have liked.

Deficit sinners will be subject to a two-step procedure. The commission will first issue a warning to the country, which has to be adopted by a qualified majority of eurozone members. If after one month the warning has either been rejected by member states or simply ignored, then the commission can insist again on the warning. This time round, however, the warning is considered automatically adopted unless a majority of eurozone states - nine - say otherwise. The commission can eventually impose a fine of up 0.1 percent of GDP for countries not acting to correct their deficit, while those countries falsifying their statistics could see a fine of 0.2 percent of GDP.

[Demeter]

10. 5 Central Banks Move to Supply Cash to Europe

http://www.nytimes.com/2011/09/16/business/global/borrowing-costs-stubbornly-high-at-spanish-auction.html?_r=1

Worried that Europe’s debt impasse posed a growing threat to the global financial system, the world’s major central banks moved Thursday to assure that European banks would not run short of cash as troubled nations like Greece and Italy sought to stabilize their economies.

The central banks, in a coordinated action intended to restore market confidence, agreed to pump United States dollars into the European banking system in the first such show of force in more than a year. Some banks have found it hard to borrow dollars as American lenders grew nervous about their financial condition.

Thursday’s action, coming almost exactly three years after the collapse of the investment bank Lehman Brothers, lifted global stock markets, sharply increasing the value of shares in banks heavily exposed to debt from Greece and the other struggling members of the euro zone. The euro, which had been falling in recent days, rebounded. ...

[Demeter]

11. Nouriel Roubini - Greece should default and abandon the euro

Make no mistake: an orderly euro exit will be hard. But watching the slow disorderly implosion of the Greek economy and society will be much worse.

Read more >>
http://link.ft.com/r/WDI4RR/B5KZFR/XBAN6/62CBT7/L9R41K/PJ/t?a1=2011&a2=9&a3=19

[Demeter]

12. Athens fights to head off cash crunch

Greece will seek to persuade its lenders that it deserves another €8bn loan payment in a pivotal conference call on Monday

Read more >>
http://link.ft.com/r/9ULF66/7A501I/Q38E1/TU39E1/QNUWYI/ZH/t?a1=2011&a2=9&a3=19

[Demeter]

13. UBS says trader hid loss with fake deals / ‘Fictitious’ positions uncovered, says bank

Kweku Adoboli used fictitious counter-trades to cover loss-making positions, the bank alleges, the same tactic used by a trader at SocGen in 2008
Read more >>
http://link.ft.com/r/EB8122/VLG3X7/Z87P0/PFJYKJ/974T8R/JY/t?a1=2011&a2=9&a3=19


Fuller picture emerges of how accused trader Kweku Adoboli trader could have allegedly racked up $2.3bn in losses
Read more >>
http://link.ft.com/r/EB8122/VLG3X7/Z87P0/PFJYKJ/OR35KG/JY/t?a1=2011&a2=9&a3=19

SMARTER THAN THE AVERAGE LOOTER!

[xchrom]

14. good morning everyone -- it's an over cast day here so i'll need more coffee...

:donut:

[Demeter]

28. Good morning! It's raining here

so I'm starting everything else later....staying warm and cozy by the monitor...

[xchrom]

33. LOL - nice monitor flame there.

It's supposed to rain starting tomorrow - then the rest of the week.

[kickysnana]

48. Woke up to fog obscuring the US Bank next door.

(I check to see if it is still there every Friday.)

[Demeter]

57. You Make Me LOL

:rofl: Keep on checking....

[AnneD]

67. Morning Marketeers.....

:donut: and lurker. We got some sprinkles Saturday, some intermittent showers on Sunday and a good down pour this morning. We need more, but the damage has already been done. The bayous hardly raised, the ground was so dry.

But we are grateful for what little we get. Maybe this is the beginning of the end of the drought.

I watched the occupation of WS this weekend. We are closer to the British and Spanish type rioting. And it can't come soon enough to wake up these putzes in DC and WS. People are becoming more desperate. They need jobs not handouts.

Happy hunting and watch out for the bears.

[xchrom]

15. europe: Fresh debt crisis fallout hits FTSE banks, miners

http://uk.reuters.com/article/2011/09/19/uk-markets-britain-stocks-idUKTRE78I13Y20110919

(Reuters) - Top shares gave back a large chunk of last week's gain in less than half a day's trade on Monday after fresh evidence of the political disunity fuelling the region's debt crisis sent bank stocks tumbling.

Another election defeat in Germany for the ruling coalition, policy division between Europe and the U.S. and lack of action at a finance minister meeting, combined with fears Athens will fail to cut deep enough to secure fresh funds, fuelled a broad-based slide.

While Greece's finance minister reiterated his belief the next tranche of bailout funds would be released, international lenders ratcheted up the pressure ahead of a conference call between the parties later on Monday.

The net effect was that, "We are pretty much in the same situation that we were before, with no concrete plans on the table in terms of how the debt situation is going to unravel," Richard Hunter, head of equities at Hargreaves Lansdown, said.

[xchrom]

16. QE gave economy significant boost - Bank report

http://uk.reuters.com/article/2011/09/19/uk-britain-boe-qe-idUKTRE78I15U20110919

(Reuters) - The Bank of England's first round of asset purchases gave the economy a significant boost but any future quantitative easing may not have the same impact, the Bank of England said in its quarterly bulletin.

Its analysis showed that the 200 billion pounds in purchases of mainly medium and long-dated gilts between March 2009 and January 2010 boosted the level of gross domestic product between 1.5 and 2 percent, the Bank said in its bulletin published on Monday.

"The evidence presented in the article suggests that the effects were economically significant," Bank chief economist Spencer Dale said in the foreword to the bulletin.

"But there is considerable uncertainty around these estimates, and the precise impact of asset purchases or sales is likely to vary depending on the circumstances in which they are conducted," Dale said.

[xchrom]

20. Britons less gloomy about their finances

http://uk.reuters.com/article/2011/09/19/uk-britons-finances-idUKLNE78I03Y20110919

(Reuters) - Britons were slightly less downbeat about their household finances in September than in August, and at their least pessimistic in almost 1-1/2 years about prospects for their household budgets, according to a survey on Monday.

However, other findings in the survey indicated Britons are having to eat into their savings and run up debt to finance spending, auguring ill for consumption and suggesting that domestic demand will remain a drag on the fragile economy.

The Markit Household Finance Index rose to 35.1 in September from a survey low of 33.2 in August, signalling an easing in the rate at which households' current finances have deteriorated.

[xchrom]

26. Rubalcaba: wealth tax could net 300,000 jobs for young people

http://www.elpais.com/articulo/english/Rubalcaba/wealth/tax/could/net/300000/jobs/for/young/people/elpepueng/20110918elpeng_8/Ten

With the wealth tax fresh in every politician's mind, Socialist electoral candidate Alfredo Pérez Rubalcaba predicted on Sunday the new levy will rake in 1.1 billion euros by the beginning of next year and could be used to create some 300,000 work contracts for young people.

Defending the measure, which was passed by the Cabinet on Friday, Rubalcaba rejected arguments that the revamped wealth tax would affect the middle class as the opposition Popular Party (PP) has been saying.

"How can they say such things without turning their faces in shame?" asked the Socialist prime-ministerial candidate, who was on a campaign stump in Barcelona where 20,000 supporters showed up for a rally.

Citing figures, Rubalcaba said that in Spain there are 34 million citizens over the age of 18 but only about 23 million file tax returns. He stated that only 160,000 taxpayers will be affected by the wealth tax, which will only cover this year and next.

[xchrom]

29. Electric car sector lacking in spark as sales stay sluggish

http://www.elpais.com/articulo/english/Electric/car/sector/lacking/in/spark/as/sales/stay/sluggish/elpepueng/20110919elpeng_2/Ten

The idea was a good one: an electric car that reduces our dependence on oil, and cuts down on CO2 emissions and noise pollution. The reality is turning out to be somewhat less promising.

Even as recently as last year, Prime Minister José Luis Rodríguez Zapatero launched a 600-million eurosubsidy plan to promote the sector, and the Industry Ministry predicted that by the end of this year, more than 20,000 electric and plug-in hybrid cars would be registered in Spain. By end-2012, this number was supposed to reach 50,000.

However, between January and August of this year, only 213 electric cars were registered. The National Association of Automobile Importers estimates the yearly total could rise to 1,000, but this is still a far cry from the government's initial hopes.

While it is too early to pronounce the electric car as a failure, it is becoming clear that initial expectations were unrealistic.

[xchrom]

30. VW may takeover of Suzuki

http://timesofindia.indiatimes.com/business/international-business/VW-may-takeover-of-Suzuki/articleshow/10041741.cms

FRANKFURT: Volkswagen could make a move to take over Japan's Suzuki, German magazine Der Spiegel reported, citing an unnamed senior manager at VW.

"I do not rule out this possibility," the weekly quoted the person as saying on Sunday.

Volkswagen declined to comment on the matter.

Suzuki said on Monday it wanted to end its two-year alliance with VW after the German carmaker accused it of violating the pact by agreeing a diesel engine supply deal with Italy's Fiat.

[xchrom]

56. Irish 'bad bank' selling debtor's art collection

http://hosted.ap.org/dynamic/stories/E/EU_IRELAND_ART_FOR_DEBT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-09-19-10-35-26

DUBLIN (AP) -- Ireland's "bad bank" and Christie's auctioneers say they are selling a bankrupt property baron's art collection, including a work by Andy Warhol.

The auctions Nov. 9 in New York and Nov. 17 in London include Warhol's "Dollar Sign" and "Man Doing Accounts" by Jack B. Yeats. The 14 paintings for sale have an estimated value of euro1.7 million to euro2.2 million ($2.4 million to $3.1 million).

Ireland's National Asset Management Agency has seized control of tens of billions' worth of possessions of the nation's bankrupt property speculators.

The state-run debt management bank said Monday this will be its first sale of impounded art.

[Demeter]

58. Even the Irish Know How to Do It

Get a clue, Eric!

[xchrom]

59. +1

[xchrom]

17. asia: Nikkei climbs over 2 pct, financials lead gains

http://uk.reuters.com/article/2011/09/16/markets-japan-stocks-idUKL3E7KG0X220110916

TOKYO, Sept 16 (Reuters) - The Nikkei stock average rose
more than 2 percent on Friday, posting its biggest daily
percentage gain since March, as coordinated action from central
banks calmed fears of a European credit freeze and sent
financial shares surging.

The benchmark's second day of gains pushed it further away
from a 2-1/2 year closing low hit on Wednesday, and gave it a
weekly gain of 1.4 percent.

"With today's rise, it is like we are cautiously climbing up
a wall but at the same time we're thinking that the wall may
collapse if we go up any further," said Kenichi Hirano, a
strategist at Tachibana Securities, who added that European debt
fears remain.

U.S. Treasury Secretary Timothy Geithner will hold talks
with European finance ministers later on Friday and will propose
leveraging the euro zone's bailout fund to make it more
effective.

[xchrom]

25. Japan's defense industry hit by its first cyber attack

http://uk.reuters.com/article/2011/09/19/us-mitsubishiheavy-computer-idUKTRE78I0EL20110919

(Reuters) - Japan's biggest defense contractor, Mitsubishi Heavy Industries Ltd, said on Monday hackers had gained access to its computers, with one newspaper saying its submarine, missile and nuclear power plant component factories had been the target.

The company said in a statement that some information could have been stolen in the first known cyber attack on Japan's defense industry.

"We've found out that some system information such as IP addresses have been leaked and that's creepy enough," said a Mitsubishi Heavy spokesman.

"We can't rule out small possibilities of further information leakage but so far crucial data about our products or technologies have been kept safe," he said, adding the company first noticed the cyberattack on August 11.

[xchrom]

52. Asian market falls on new Europe fears

http://economictimes.indiatimes.com/markets/global-markets/asian-market-falls-on-new-europe-fears/articleshow/10040478.cms

HONG KONG: Asian stocks and the euro fell on Monday after European finance heads failed to agree a plan to solve the region's debt woes, while they also put off a decision on releasing rescue funds to Greece.

The keenly-watched meeting in Poland on Friday highlighted divisions between Europe and the United States over the best way forward for the region, raising fears of another global financial crisis.

Sydney lost 1.64 per cent, or 67.9 points, to end at 4,081.5, while Seoul shed 1.04 per cent, or 19.15 points, to 1,820.95.

Hong Kong tumbled 2.76 per cent, or 537.36 points, to 18,917.95, its lowest since July 2009, while Shanghai ended 1.79 per cent, or 44.54 points, lower at 2,437.80.

[xchrom]

53. S Korea suspends savings banks citing weak finances

http://www.bbc.co.uk/news/business-14967604

South Korea has suspended seven local savings banks citing the weak state of their finances.

Tomato Savings, the country's second-largest savings bank, is among those ordered shut for six months by the Financial Services Commission.

In July, the regulator launched an investigation into the savings bank industry.

Banks have been hit by a downturn in the real estate market, which saw construction loan defaults increase.

[Demeter]

18. The Facts about Mike Perry and IndyMac

http://nottoobigtofail.org/

My name is Michael Perry. I am the former Chairman and Chief Executive Officer of Indymac. I have kept silent for three years in the hope that I would be left alone and allowed to rebuild my professional life, but unfortunately that has not been the case. I have been forced to defend myself against unwarranted and false, public allegations....On July 11, 2008, Indymac Bank was seized by the Federal Deposit Insurance Corporation (FDIC) after a U.S. Senator’s inappropriate public statements during the financial crisis caused a “run on the bank” that rapidly depleted the bank’s ample liquidity. As a result of this bank run and the fact that Indymac was deemed by banking regulators to be “Not Too Big To Fail”, it was not around just a few months later, at the height of the financial crisis, to receive any of the significant and unprecedented assistance the government provided to every “Too Big To Fail” financial institution and hundreds of smaller financial firms. Without this assistance, many, if not most would have suffered the same fate as Indymac, including some of the largest and oldest firms.

Since that time, I and others have been the subject of various government investigations and named as defendants in numerous civil lawsuits, including ones filed by the Securities and Exchange Commission (SEC) on February 11, 2011 (31 months after Indymac was seized), and the FDIC on July 6, 2011 (3 years after Indymac was seized).

The plaintiffs in these civil lawsuits apparently don’t care about the facts or the truth; these suits are filled with distortions and inaccuracies. They are primarily being pursued to gain access to potential settlement proceeds from directors and officers liability insurance, or in the case of the SEC to show politicians, the press, and the public that they are now tough enforcers of the securities laws. The FDIC, for its part, is seeking a significant share of D&O insurance proceeds, but it is also inappropriately seeking to blame former banking executives like me for the FDIC’s own failures. The private deposit insurance fund, for which the FDIC is responsible, became insolvent during this crisis and remains so; without the full faith and credit of the U.S. behind them, they like Indymac and many others, would have failed.

Importantly, Indymac decided in 2000 to carry out its business model through the acquisition of a depository institution whose deposits were insured by the FDIC. Because of this decision, Indymac — unlike government-sponsored mortgage lenders Fannie Mae and Freddie Mac (and others) — has not cost U.S. taxpayers one penny. And while the seizure of Indymac Bank has cost the FDIC’s insurance fund billions, industry experts and others (including me) believe that much of the insurance fund’s loss was avoidable, if only the FDIC had worked with us to save the bank when that was still possible or if the FDIC had made better decisions as conservator once it took over the bank.

Not one of the lawsuits against me has any merit...

AMAZING WEBSITE DEVOTED TO THIS TOPIC

[Demeter]

19. New York Appellate Court rejects validity of loan assignments by MERS

AND ANOTHER STATE REJECTS IT

https://www.lexology.com/library/detail.aspx?g=1e8c3ad0-0e48-480d-92be-3a9dc7d44607

[xchrom]

21. PRECIOUS-Gold rallies on deteriorating debt crisis

http://uk.reuters.com/article/2011/09/19/markets-precious-idUKL5E7KJ15620110919

LONDON, Sept 19 (Reuters) - Gold prices rallied on Monday as a series of political setbacks over the weekend reinforced fears about the deteriorating euro zone debt crisis, prompting investors to seek refuge in the precious metal.

Spot gold was bid at $1,821.00 a troy ounce at 0900 GMT from $1,810.73 late in New York on Friday. The precious metal hit a record high of $1,920.30 on September 6.

The cancellation of a visit by Greek Prime Minister George Papandreou to the United States to chair an emergency cabinet meeting at home and a regional election defeat for German Chancellor Angela Merkel added to perceptions of a worsening crisis.

"Buying interest is picking up and given ongoing problems in the euro zone and the financial system, safe-haven demand should remain strong," said Carsten Fritsch, analyst at Commerzbank. "Last week's correction was just a short term brief downward move."

[xchrom]

61. Gold futures drop by as much as $36 an ounce

http://www.marketwatch.com/story/gold-futures-drop-by-as-much-as-30-an-ounce-2011-09-19?dist=markets

SAN FRANCISCO (MarketWatch) — Gold futures fell by as much as $36 an ounce Friday, with strength in the U.S. dollar dulling demand for the precious metal as investors sold gold in a scramble for cash as U.S. stocks suffered steep declines.

The session’s action is "reflective of a ‘risk off’ day,” said Brien Lundin, editor of Gold Newsletter.

“Greece is back in the headlines, and the market is beginning to accept the inevitability of a default, which has prompted speculators to close positions and run for safety,” he said.

At last check, gold for December delivery /quotes/zigman/661658 GC1Z -1.63% was down $24.50, or 1.4%, to $1,790.30 an ounce on the Comex division of the New York Mercantile Exchange Monday, after tapping a fresh session low of $1,778.20.




***don't ask me. i just found the story. -- i am clueless when it comes to precious metals.
& i would probably never invest anything that expensive.

[DemReadingDU]

23. Stock Fund Withdrawals Top Lehman as $75B Pulled

9/19/11 Stock Fund Withdrawals Top Lehman as $75B Pulled

Investors have pulled more money from U.S. equity funds since the end of April than in the five months after the collapse of Lehman Brothers Holdings Inc., adding to the $2.1 trillion rout in American stocks.

About $75 billion was withdrawn from funds that focus on shares during the past four months, according to data compiled by Bloomberg from the Investment Company Institute, a Washington-based trade group, and EPFR Global, a research firm in Cambridge, Massachusetts. Outflows totaled $72.8 billion from October 2008 through February 2009, following Lehman’s bankruptcy, the data show.

Bears say investors are abandoning stock managers because there’s no end in sight to the decline that pushed the Standard & Poor’s 500 Index within 2.1 percentage points of a bear market in August. Bulls say the retreat by individuals has been a reason to buy since the bull market began in March 2009 and withdrawals mean money is available to buy stocks in the future.

“When we’re getting close to a market bottom, the phone starts ringing off the hook and our clients want us to sell everything,” Bruce McCain, who helps manage $22 billion as chief investment strategist at the private-banking unit of KeyCorp, said in a phone interview on Sept. 14. “Market bottoms are less about an improvement in the fundamental situation, whether the economy or outlook for earnings, and a lot more about getting rid of all the anxious investors.”

more...
http://www.bloomberg.com/news/2011-09-18/fund-withdrawals-top-lehman-as-individuals-pull-75-billion-from-stocks.html

[Demeter]

24. Poverty In America: A Special Report

http://theeconomiccollapseblog.com/archives/poverty-in-america-a-special-report

ANOTHER INTERESTING WEBSITE FOR SURVIVALISTS

America is getting poorer. The U.S. government has just released a bunch of new statistics about poverty in America, and once again this year the news is not good. According to a special report from the U.S. Census Bureau, 46.2 million Americans are now living in poverty. The number of those living in poverty in America has grown by 2.6 million in just the last 12 months, and that is the largest increase that we have ever seen since the U.S. government began calculating poverty figures back in 1959. Not only that, median household income has also fallen once again. In case you are keeping track, that makes three years in a row. According to the U.S. Census Bureau, median household income in the United States dropped 2.3% in 2010 after accounting for inflation. Overall, median household income in the United States has declined by a total of 6.8% once you account for inflation since December 2007. So should we be excited that our incomes are going down and that a record number of Americans slipped into poverty last year? Should we be thrilled that the economic pie is shrinking and that our debt levels are exploding? All of those that claimed that the U.S. economy was recovering and that everything was going to be just fine have some explaining to do.

Back in the year 2000, 11.3% of all Americans were living in poverty. Today, 15.1% of all Americans are living in poverty. The last time the poverty level was this high was back in 1993.

However, it is important to keep in mind that the government definition of poverty rises based on the rate of inflation. If inflation was still calculated the way that it was 30 or 40 years ago, the poverty line would be much, much higher and millions more Americans would be considered to be living in poverty....

• *There are fewer payroll jobs in the United States today than there were back in 2000 even though we have added 30 million people to the population since then.
  
  
• *Back in 1969, 95 percent of all men between the ages of 25 and 54 had a job. In July, only 81.2 percent of men in that age group had a job.
  
  
• *If you gathered together all of the unemployed people in the United States, they would constitute the 68th largest country in the world.
  
  
• *According to John Williams of shadowstats.com, if you factored in all of the short-term discouraged workers, all of the long-term discouraged workers and all of those working part-time because they cannot find full-time employment, the real unemployment rate right now would be approximately 23 percent.
  
  
• *If you have been unemployed for at least one year, there is a 91 percent chance that you will not find a new job within the next month.
  
  
• *Since the year 2000, we have lost approximately 10% of our middle class jobs. In the year 2000 there were about 72 million middle class jobs in the United States but today there are only about 65 million middle class jobs.
  
  
• *Back in 1980, less than 30% of all jobs in the United States were low income jobs. Today, more than 40% of all jobs in the United States are low income jobs.
  
  
• *Between 1969 and 2009, the median wages earned by American men between the ages of 30 and 50 dropped by 27 percent after you account for inflation.
  
  
• *According to a report released in February from the National Employment Law Project, higher wage industries are accounting for 40 percent of the job losses in America but only 14 percent of the job growth. Lower wage industries are accounting for just 23 percent of the job losses but 49 percent of the job growth.
  
  
• *Half of all American workers now earn $505 or less per week.
  
  
• *Last year, 19.7% of all U.S. working adults had jobs that would not have been enough to push a family of four over the poverty line even if they had worked full-time hours for the entire year.
  
  
• *The number of Americans that are going to food pantries and soup kitchens has increased by 46% since 2006.
  
  
• *One out of every six Americans is now enrolled in at least one government anti-poverty program.
  
  
• *Nearly 10 million Americans now receive unemployment benefits. That number is almost four times larger than it was back in 2007.
  
  
• *More than 45 million Americans are now on food stamps. The number of Americans on food stamps has increased 74% since 2007.
  
  
• *Approximately one-third of the entire population of Alabama is now on food stamps.
  
  
• *More than 50 million Americans are now on Medicaid.
  
  
• *Back in 1965, only one out of every 50 Americans was on Medicaid. Today, approximately one out of every 6 Americans is on Medicaid.
  
  IT GOES ON....AND ON...
  
  
  
  *In 1980, just 11.7% of all personal income came from government transfer payments. Today, 18.4% of all personal income comes from government transfer payments.

[bread_and_roses]

37. Mind-reeling

How long can this go on? It's simply incomprehensible. (I realize such statements are not much use, but by the goddess .... what else can one say at this point? - other, of course, than JUMP YOU FUCKERS)

[Demeter]

39. I feel like we are in some kind of endurance test

or maybe "test to destruction".

Everyone's focusing on the election now. They can't be bothered to look at anything else...like lingering wars, or declining economics, or broken poromises...

And those not in the US political sphere are focused on Greece.

Most people are focused on nothing in particular, if they are not focused on sheer survival. And Christmas merchandise is already filling the stores....

Meanwhile, the level of baffling BS from DC is increasing daily, especially from the White House.

[Demeter]

27. Bank of New York: A Train Wreck Waiting to Happen?

http://www.nakedcapitalism.com/2011/09/bank-of-new-york-a-train-wreck-waiting-to-happen.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

Many readers no doubt know that the so-called $8.5 billion Bank of America mortgage settlement, which was between the Charlotte bank and the Bank of New York as trustee for 530 residential mortgage securitizations, had run into some very serious headwinds. The deal had to be approved in a so-called Section 77 hearing; a number of interested parties, including some investors, the attorneys general of New York and Delaware, and the FDIC, raised questions and objections to the deal, as well as to the use of a Section 77 hearing (which sets a very high bar for opposing an agreement). Although this saga has a quite a few more rounds to go, it looks likely that any settlement will be considerably delayed and will wind up costing Bank of America a good bit more than $8.5 billion.

What has gotten less attention is the implication of the probable derailment of this deal for the Bank of New York, and its vulnerability to mortgage litigation. If you think, as banking expert Chris Whalen does, that BofA is a goner by virtue of the odds of very large damages in the various mortgage cases that are in progress, Bank of New York is a goner even faster if (and we really mean when) investors start saddling up to target the bank.

The liability of trustees in mortgage securitizations is so obvious and comparatively easy to prove that I am surprised that no one has yet gone after it. However, investors are probably understandably cautious about filing suits that might expose widespread failures of originators and pacakgers to convey mortgage loans to securitizations, which would lead to lots of collateral damage (no pun intended). The Delaware filing on the BofA settlement highlights the issue, which is that the trustees had made multiple representations in securities filings that the mortgage trusts had the assets they said they did. From our post on the Delaware filing:

And it goes straight to an issue we flagged, that the trustee makes annual certification in SEC filings, and the bar for securities fraud is much lower than under contract law theories. Delaware’s securities laws follow SEC 10(b)5 language re disclosure (that it not merely be narrowly accurate, but that it be free of material omissions). Boldface ours:

The acts and practices ofBNYM alleged herein may have violated 6 Del. C. § 7303(2), in that BNYM may have made untrue statements of material fact and/or omitted to state material facts in order to make the statements made, in light of the circumstances under which they were made, not misleading. BNYM’s conduct as described above may have violated the Delaware Securities Act insofar as the Trust PSA requires the Trust annually to certify the following “servicing criteria”:

• “Collateral or security on mortgage loans is maintained as required by the transaction agreements or related mortgage loan documents.”
• “Mortgage loan and related documents are safeguarded as required by the transaction agreements;” and
• “Any addition, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements.” ].

The Delaware investors in the Trusts may have been misled by BNYM into believing that BNYM would review the loan files for the mortgages securing their investment, and that any deficiencies would be cured.

As we reported in September, lawyers had found evidence that Countrywide did not transfer the notes (the borrower IOUs) to the securitization trusts as stipulated in the pooling and servicing agreements…

Because those agreements had strict cut off dates as to when those transfers had to be completed, and governing law for the overwhelming majority of the trusts (New York law) is unforgiving on this matter (New York trusts are not permitted to deviate from their written directives) the failure to perform as stipulated cannot be remedied…Hence the widespread use of document fabrication to get around this mess.

Note that Biden is not going directly after Bank of New York. He is merely seeking to question and perhaps block the settlement with Bank of America. But the issue he raises is a nuclear weapon. Bank of New York was the preferred trustee for Countrywide. There is good reason to believe the Countrywide securitizations were a total fail as far as living up to the requirements of the PSA are concerned. Bank of New York nevertheless piously made multiple false certifications on which investors relied (if you doubt the evidence above, a Pacer scrape of foreclosures on Countrywide trusts will provide further support).

This liability would almost certainly wipe out Bank of New York, which has $34 billion in equity. But Bank of New York is too big to fail by virtue of playing a crucial role in settlement, transfers, and custody. But the real reason no one is likely to sue on this issue is that confirming that the transfers were not done correctly and that this impairs the value of residential mortgage securitizations on a widespread basis. It makes them, again per Levitin, at best “non mortgage backed securities” (as counterintuitive as it sounds, treating regular borrower payments as if the deal were done correctly may well be a viable legal position but the ability of the trust to foreclose would be hopelessly impaired).

Chris Whalen, in his current Institutional Risk Analytics newsletter, raises more ugly questions about Bank of New York. Although he refrains from using the expression “securities fraud”, any informed reader can see that it precisely the issue Whalen is raising. He argues that the bank failed to disclose its mortgage liability in its recent SEC filings. And this is for a bank whose auditor has already highlighted problems in its trustee operations. The bank’s defense no doubt would be that any liability is not material, but you can see Whalen thinks, as we do, that the downside is plenty large:

We wonder, does the auditor of record for BK, KPMG, understand that the NY AG has accused its client of a conflict of interest and a systemic failure to perform its role as trustee with respect to hundreds of billions of dollars’ worth of RMBS?…

Just when, we wonder, did the general counsel of BK bring the issue of potential trustee liabilities to the attention of the board of directors of BK? Has BK informed their liability insurance underwriters of the appearance of this large risk? Again, we note, there is no mention of the liability in the BK 2010 Form 10-K, this even though we understand that BK was aware of the NY AG’s investigation into possible trustee lapses with respect to RMBS even before the end of last year. Certainly such information is material to investors…

Under Sarbanes-Oxley, the general counsel of BK has an affirmative duty to make members of the board of directors aware of any failure in terms of internal systems and controls or future risks. Looking at the public record, it does not appear that BK has yet acknowledged the problems regarding trustee activities that have been made public by the State of New York.

The auditor of BK as well as the outside counsel to the bank also have affirmative duties to report to the SEC any failure to disclose such risks to investors in the event that the board fails to make such disclosure. Again, we see nothing in the public record indicating any disclosure by BK regarding these allegations by the State of New York. And is it not interesting that the New York AG was not represented at last Friday’s meeting of parties in the Countrywide put-back litigation? While the penalties for failure to disclose in the Sarbanes-Oxley law are bad enough, a litigation by the NY AG using the Martin Act is the big shoe waiting to drop on both BAC and BK. What will the NY AG do? Stay tuned.

No wonder New York Fed director and official friend of Bank of New York (by virtue of her not for profit having BoNY as a large donor) Kathryn Wylde has gone into aggressive overdrive to protect one of her meal tickets, attacking Eric Schneiderman for having the temerity to question the Bank of New York’s role. Modern attorneys general apparently are supposed to understand that banks are above the law and act accordingly.

[Demeter]

31. The Decline of Manufacturing in America: A Case Study

http://www.nakedcapitalism.com/2011/09/the-decline-of-manufacturing-in-america-a-case-study.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

One frequent and frustrating line that often crops up in the comments section of this blog is that American labor has no hope, it should just accept Chinese wages, since price is all that matters. That line of thinking is wrongheaded on multiple levels. It assumes direct factory labor is the most important cost driver, when for most manufactured goods, it is 11% to 15% of total product cost (and increased coordination costs of much more expensive managers are a significant offset to any savings achieved by using cheaper factory workers in faraway locations). It also assumes cost is the only way to compete, when that is naive on an input as well as a product level. How do these “labor cost is destiny” advocates explain the continued success of export powerhouse Germany? Finally, the offshoring,/outsourcing vogue ignores the riskiness and lower flexibility of extended supply chains.

This argument is sorely misguided because it serves to exculpate diseased, greedy, and incompetent American managers and executives. In the overwhelming majority of places where I lived in my childhood, a manufacturing plant was the biggest employer in the community. And when I went to business school, manufacturing was still seen as important. Indeed, the rise of Germany and Japan was then seen as due to sclerotic American management not being able to keep up with their innovations in product design and factory management.

But if you were to ask most people, they’d now blame the fall of American manufacturing on our workers. That scapegoating serves to shift focus from the top of the food chain at a time when executives have managed to greatly widen the gap between their pay and that of the folks reporting to them.

Let me give you an all too typical example of how American management has contributed to the demise of our industrial competitiveness, namely, the former Mead Corporation paper mill in Escanaba, Michigan, which is now part of NewPage, owned by Cerberus....

CONTINUES AT LINK

[DemReadingDU]

44. Mead -> MeadWestvaco-> Cerberus ->NewPage

MeadWestvaco was formed in January 2002 as the result of a merger between The Mead Corporation of Dayton, Ohio, and Westvaco (originally the Piedmont Pulp and Paper Company and then The West Virginia Pulp and Paper Company).
http://en.wikipedia.org/wiki/MeadWestvaco

In 2005, MeadWestvaco's Printing and Writing Paper business was sold to investment firm Cerberus Capital Management for about $2.3 billion to form NewPage Corporation. NewPage originally constituted 5 pulp and paper manufacturing in Kentucky, Maine, Maryland, Michigan, and Ohio.
http://en.wikipedia.org/wiki/NewPage_Corporation


The Mead Corporation used to be one of the world's largest manufacturers of paper products, school supplies, etc. with headquarters in Dayton, Ohio. What a sad end to a once great company.

[Demeter]

60. And another victim of the 3 headed dog

[InkAddict]

64. WTH, it only took three turnovers to kill this corporate person -

Hit the "That's Easy" button.

It took 5 x as many turnovers to kill the livelihood of a certain IT lower Middle Class employee/family in that city in a tough-luck roller coaster ride to the bottom, ending with a second mad-dash move to where the grass might be greener - it wasn't.

Granddaddy was a wire-weaver - the cloth of pulp papermaking.

A neighbor worked for Mead as a purchaser; it's a bitter-sweet pill to swallow, knowing at least he had retained, at that time, many benefits that protected his family before an untimely ALS demise. All's good, I guess, for he could not have imagined...

I remember signing page after page of a Countrywide mortgage in Mead Tower; one of the only two "skyscrapers" in this Midwest C-town; it's now just an address on the Plaza with "available office space." The sheriff sale's purchaser of that residence overpaid by at least $30K. The home's value now is now a bit over $10K below the purchase price at our hand-cramping session in the Tower nearly 20 years later, that is, 2/3 of the way through that 30-year fixed POS - all things considered nationwide, that's pretty good, is all that can be said - go figure.

Join the A-team in a rousing, "I hate it when a plan falls apart."

[DemReadingDU]

68. KeyBank moved across the street into the former Mead Tower

I think that was a couple years ago. I've last track since I rarely get into Dayton anymore.
Are you still in the area?

[InkAddict]

71. No, but I once worked for KeyBank's predessesor , Society

National, then Society National NA in another life in Cleveland as a MasterCard Service and Trust Admin secretary. Key has long since outsourced the whole Trust Department function. When Key took over the accounts back then, we were in Dayton, and they were so messed up I didn't get a checking statement for months and they couldn't tell me where those paper statements had gone, checks and all. After going round and round, they admitted sending them to an incorrect address via a corrupted database file conversion that missed some check digit or other. That resident had never sent any statements back to the sender/bank via USPS. We checked out that incorrect address which wasn't even close by, and it got more scary. No one had lived there for those same months. It's hard to say whether or not they were viewed by ?????????????? Changed banks pronto!

[DemReadingDU]

72. Hmm, I worked for Society's predessesor, Third National Bank

The building was at 34 N. Main Street, in Downtown Dayton, and I worked in the Trust Department in the early 70s. This was in pre-computer days where we had to type individual portfolio statements for business owners.

I have never had any issues with any of our accounts there. In fact, I still have my original checking account number from the 70s from Third National, which has seen the 2 bank mergers, and our 3 houses in this area. Truly amazing after hearing your horror story, and others.

[InkAddict]

75. What a small world, LOL.

Big parent Society was in early 70s just beginning to spit out reports onto greenbar. I can remember stamping the page numbers on greenbar reports for the Officers meetings by hand because the request to have the page # added by programming code change was very low in priority regardless of the fact that I had better things to do than use a hand tool as well, hahaha.

I did serve as a witness on some LW&T's and insurance beneficiary changes. It was not even a requirement to be a notary public.

We went from Gregg shorthand and IBM selectrics to IBM mag belt and Selectrics with interchangeable font balls; no terminals yet so a lot of cut and pasting then re-typing going on.

Remember this: /s/ InkAddict
Does anyone use it anymore? LOL

[Demeter]

32. HERE'S OUR VOICE CRYING IN THE WILDERNESS

...When the president spoke during a recent market swoon, the market dropped another 100 points. Democrats may soon have to confront an uncomfortable truth, and ask whether Obama is a suitable choice at the top of the ticket in 2012. They may then have to ask themselves if there's any way they can push him off the top of the ticket.

That these questions have not yet been asked in any serious way shows how weak the Democratic Party is as a political organization. Yet this political weakness is not inevitable, it can be changed through courage and collective action by a few party insiders smart and principled enough to understand the value of a public debate, and by activists who are courageous enough to face the real legacy of the Obama years.

Obama has ruined the Democratic Party. The 2010 wipeout was an electoral catastrophe so bad you'd have to go back to 1894 to find comparable losses. From 2008 to 2010, according to Gallup, the fastest growing demographic party label was former Democrat. Obama took over the party in 2008 with 36 percent of Americans considering themselves Democrats. Within just two years, that number had dropped to 31 percent, which tied a 22-year low.

Of course, there are many rationalizations for Obama to remain the nominee. He's faced difficult opposition. He's passed major legislation. His presidency is historic. The economy is hard to resuscitate. But all such rationalizations evade the party's responsibilities to actually choose the nominee best suited to win votes. If Obama looks unlikely to get enough votes to win, he should not get the nomination....

What Democrats can do about Obama BY MATT STOLLER

http://www.salon.com/news/politics/war_room/2011/09/04/favoritesonsanddaughters

[Demeter]

34. The Geithner mystery solved By Glenn Greenwald

http://www.salon.com/news/opinion/glenn_greenwald/2011/09/19/geithner/index.html

Reviewing "Confidence Men" -- Ron Suskind's new book critically examining President Obama's management of the financial crisis -- The New York Times' Michiko Kakutani ponders this mystery raised by Suskind:

Mr. Suskind suggests that the administration's problems in dealing with the fiscal crisis began with the president's choice of his economic team. He wonders why Mr. Obama turned away from the advisers who had seen him through the campaign (including more progressive thinkers like Mr. Stiglitz, Robert Reich and Austan Goolsbee), and relied instead on two men associated with the deregulatory policies of the past, Mr. Geithner, the Treasury secretary, and Mr. Summers, the chief economic adviser. Both men had served in the Clinton administration (with Treasury Secretary Robert E. Rubin, who would later join Citigroup as a senior adviser and board member); their actions, Mr. Suskind contends, "had contributed to the very financial disaster they were hired to solve."

Of course, one might ask the same of Obama's penchant for filling the most important positions in his administration -- including his Vice President, Secretary of State, and Defense Secretary -- with supporters of the Iraq War. But about Geithner, Suskind unwittingly solved the mystery he raised: Kakutani notes that "one top banker quoted in these pages refers to Geithner as 'our man in Washington' for helping avert more systemic changes affecting Wall Street."...Geithner wasn't chosen and hasn't remained despite being "associated with the deregulatory policies of the past" and despite being the bankers' "man in Washington." He is empowered precisely because of those facts, as was pointed out even before Obama's inauguration. That Geithner and Summers were empowered after enabling the financial crisis through Wall Street subservience isn't a mystery; it's the explanation (And just by the way, replacing the word "despite" with the phrase "because of" is -- in general -- one of the most valuable tools for translating Washington propaganda into reality; here is an excellent example showing how that works, from the first paragraph of a New York Times article two weeks ago:

Documents found at the abandoned office of Libya’s former spymaster appear to provide new details of the close relations the Central Intelligence Agency shared with the Libyan intelligence service -- most notably suggesting that the Americans sent terrorism suspects at least eight times for questioning in Libya despite that country's reputation for torture.

Note how the paragraph instantly transforms from misleading nonsense into obvious truth simply by changing "despite" to "because of"; this repeatedly is an effective instrument for deciphering propaganda -- e.g., the U.S. continues to brutalize people in the Muslim world "despite" the fact that doing so produces more Terrorism and thus ensures Endless War.)...Perhaps most notable about the Suskind chapter on which Kakutani focuses is the process by which Obama featured progressive economists during the campaign, only to immediately subordinate them to Wall-Street-subservient officials once in power. Feigning progressive leanings for political gain is Obama's modus operandi; as Matt Taibbi recently put it in explaining why he no longer listens to Obama's speeches:

I remember following Obama on the campaign trail and hearing all sorts of promises before union-heavy crowds. He said he would raise the minimum wage every year; he said he would fight free-trade agreements. He also talked about repealing the Bush tax cuts and ending tax breaks for companies that move jobs overseas.

It's not just that he hasn't done those things. The more important thing is that the people he's surrounded himself with are not labor people, but stooges from Wall Street. Barack Obama has as his chief of staff a former top-ranking executive from one of the most grossly corrupt mega-companies on earth, JP Morgan Chase. He sees Bill Daley in his own office every day, yet when it comes time to talk abut labor issues, he has to go out and make selected visits twice a year or whatever to the Richard Trumkas of the world.

Listening to Obama talk about jobs and shared prosperity yesterday reminded me that we are back in campaign mode and Barack Obama has started doing again what he does best -- play the part of a progressive. He's good at it. It sounds like he has a natural affinity for union workers and ordinary people when he makes these speeches. But his policies are crafted by representatives of corporate/financial America, who happen to entirely make up his inner circle.

That's why -- after 2 1/2 years -- we suddenly see an outburst of "fighting for jobs" and, now, a call to raise taxes on the rich. He does that precisely because everyone -- especially the rich -- knows it will not and cannot happen. We're now formally in (re-)election season, so it's time again to haul out the progressive music. Some Democrats are honest and cynical enough to acknowledge that Obama is doing all these things purely for political gain and -- because his re-election is their top priority -- to celebrate it even while acknowledging it will never become reality (see here and here as examples). From that perspective, I suppose having him give speeches where he advocates for jobs and taxes on the rich is preferable to his endorsing austerity and Reaganomics as he had been doing for months But whatever else is true, none of this presages an actual change in how the government functions or, especially, on whose behalf it labors. That's precisely why he feels free to advocate such things without alienating his funding base. It's still the government of Tim Geithner and his bosses/owners; election season (combined with rising elite fear of social unrest) just requires a bit more pretense to obscure that fact.

[bread_and_roses]

45. I wish I could Rec a post

Just about everything we need to know in that one. Not to mention that some of us knew it from the moment he appointed Timmeh and Larry. I still remember my absolute shock. And I'm an ignoramus. How some much more knowledgeable ever gave him any credence after has always amazed me.

[Tansy_Gold]

47. ". . . .began with the president's choice of of his economic team. . . "

[Hotler]

54. Fuck, fuck, fuck, fuck, fuck, all I can do is shake my head.

Tax the rich till their eyes bleed.

[Roland99]

35. U.S 2-year yields fall to record low (Yield down to 0.17%)

[Demeter]

40. That's just insane

[Demeter]

36. More Proof of DoJ Lack of Interest in Enforcing the Law: The Case of the Kickback-Demanding Banks

http://www.nakedcapitalism.com/2011/09/more-proof-of-doj-lack-of-interest-in-enforcing-the-law-the-case-of-the-kickback-demanding-banks.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+NakedCapitalism+%28naked+capitalism%29

In this world of rampant banking miscreance, it may seem hard to get worked up about $6 billion in impermissible kickbacks. But this is a case of a clear-cut legal violation, with the particulars sent to the Department of Justice by the HUD Inspector General’s office on a silver platter. And one of the alleged big bad actors was the ever-sanctimonious Wells Fargo.

American Banker has a detailed write-up of a kickback scheme between major banks who were mortgage originators, in particular Wells, Citigroup, Countrywide, and SunTrust and mortgage insurers. The mortgage insurance was to insure the riskier portion of a highly geared mortgage. The borrower would pay a higher rate to compensate for the lack of a large (or much of any) down payment. The kickback was dressed up as reinsurance, meaning the mortgage insurer was laying off some of the risk to the originator and paying a fee to do so. But what instead happened was that fees were paid but the deals were structured so that no risk was shifted over to the banks.

The violations were uncovered by HUD’s Inspector General office. IGs are tasked to prevent and uncover fraud, waste, and abuse. Its budget is separate from the rest of HUD. It has substantial law enforcement powers and can subpoena documents but not witnesses. Not surprisingly, this isn’t the first time that significant HUD IG finding has been ignored. The IG’s office found substantial evidence that the biggest servicers had defrauded taxpayers (with Wells again a particularly bad actor) But since that report contradicted the “see no evil” Foreclosure Task Force findings, nothing has been done.

The overview from the American Banker story:

In exchange for the their business, companies such as Citigroup Inc, Wells Fargo & Co, SunTrust Banks Inc. and Countrywide allegedly required reinsurance partnerships on generous terms that violated the Real Estate Settlement Procedures Act, a 1974 law prohibiting abusive home sales practices.

During a two-day presentation in the summer of 2009, HUD’s team presented DOJ attorneys with a thick binder of evidence that major banks had engineered a decade-long kickback scheme, people familiar with the investigation say.

Documents from the investigation show that the inspector general’s staff concluded that banks and insurance companies had created elaborate financial structures that had the appearance of reinsurance but failed to transfer significant amounts of risk to their bank underwriters.

Some of the deals were designed to return a 400% profit on a bank’s investment during good years and remain profitable even in the event of a real estate collapse.

Making matters worse, banks allegedly forced unknowing consumers to buy more insurance than they needed and failed to properly disclose the reinsurance agreements, another RESPA violation…

Wells Fargo and Bank of America Corp. have settled class action cases alleging the same sort of misconduct flagged by HUD, and internal documents show that banks and insurers viewed the arrangements as a thinly veiled pay-to-play scheme. Even as insurers complained they couldn’t afford the escalating cost of the reinsurance payments, banks threatened or punished companies that balked at providing them, documents obtained by American Banker show.

Wells Fargo & Co told one insurer that it should consider giving Wells such deals if it wanted business referrals. After insurer MGIC Investment Corp. announced plans to cut back on banks’ share of premiums in 2003, Countrywide executives complained to an MGIC executive and told him that they were shifting Countrywide’s business to MGIC’s competitors.

The article provides far more in the way of supporting detail Former members of the mortgage industry have also confirmed that the banks were aggressively demanding kickbacks. Yet look what then transpired:

HUD Inspector General Ken Donohue — and his deputy, Mike Stephens, who succeeded him last year — were confident that they had a case…

The DOJ said it wanted take the matter on, according to Inspector General Stephens and others. Six months later, HUD’s attorneys formally referred its case to prosecutors, effectively ending the housing agency’s involvement. Investigators believed a speedy settlement in the hundreds of millions of dollars was likely, and HUD’s investigators even suggested that the proceeds should be used to pay for mortgage counseling for borrowers who were allegedly victims of kickback schemes.

Major banks deny that their reinsurance agreements were illegal, but they have not been eager to defend them in court….

More than a year and a half after the Department of Justice took over the case, no settlement has been reached and there is serious doubt as to whether the case even remains active.

So why is the Department of Justice’s excuse for sitting on its hands? The excuse made is that it lacks the needed accounting skills. If you believe that, I have a bridge I’d like to sell you. Actions speak louder than words, and the evidence is overwhelming that the DoJ has no interest in inconveniencing anyone influential, particularly banks.

[Demeter]

38. Only 7 recs by 9:20? Where is everyone?

Did the world end, and I missed it?

[burf]

41. Getting cows ready

to load to go to the sale barn today. Just in for a cup of coffee before the truck shows up.

[Tansy_Gold]

46. Working on my big fall project

https://picasaweb.google.com/EmeraldGecko/2011ArtistsStudioTourSampler?authuser=0&authkey=Gv1sRgCNeoo_zdi6ivuQE&feat=directlink

[MadinMo]

76. Beautiful things!

Thanks for sharing the pictures!

[Tansy_Gold]

77. Our annual event

This year we will have 22 studios open and approximately 60 different artists exhibiting. I never fail to be amazed at the creative talent that abounds.

[AnneD]

69. The auction barns......

have been innundated here in Texas. Hay is prohibitive as is feed. Good Luck!

[Demeter]

62. Now it's up to 20

There's been an unreccer cruising our corner of the world...but it's all good. Maybe he/she/it will learn something in the process...

[mahatmakanejeeves]

42. Tyco Intl plans to break up into 3 companies

Tyco Intl plans to break up into 3 companies

Again?

Associated Press
Tyco Intl plans to break up into 3 companies
By TOM MURPHY , 09.19.11, 08:11 AM EDT

Swiss manufacturer Tyco International Ltd. said Monday it plans to separate into three independent, publicly-traded companies, a move that will mark its second breakup since 2007.

The company will create an ADT North America residential security business and separate companies for flow control products and commercial fire and security. Tyco said the new companies will have greater flexibility to pursue their own growth strategies than they would under the current corporate structure.
....

In 2007, a scandal-plagued Tyco International Ltd. transitioned from an unwieldy conglomerate with annual revenue of $41 billion into three separate, public companies. It spun off its Covidien health care and Tyco Electronics ( TEL - news - people ) businesses in a tax-free distribution to shareholders to focus on fire and security and engineered products.

Tyco had swelled under the management of former CEO L. Dennis Kozlowski, who stepped down in 2002 amid a widely publicized fraud probe. Kozlowski and ex-Chief Financial Officer Mark Swartz were convicted in 2005 of defrauding Tyco of hundreds of millions of dollars through theft and stock manipulation.

Yes, indeedy, I held shares back when Kozlowski and his friends were helping themselves to my money. I still hold shares of Covidien, Tyco Electronics, and Tyco International.

[Roland99]

43. DJIA down 200 just 10 min. in

Dow 11,308 -201 -1.74%
Nasdaq 2,578 -45 -1.70%
S&P 500 1,194 -23 -1.85%
GlobalDow 1,796 -45 -2.44%
Oil 85.63 -2.33 -2.65%
Gold 1,816 +1 +0.07%

[Demeter]

63. It's Talk Like a Pirate Day!

Also, Hermione Granger's birthday...so there's magic piracy in the markets.... as all the rats leave the sinking ship...

[xchrom]

49. south asia: Sensex dips 188 pts on high rates, low growth worries

http://timesofindia.indiatimes.com/business/india-business/Sensex-dips-188-pts-on-high-rates-low-growth-worries/articleshow/10042686.cms

MUMBAI: Snapping its 3-day winning streak, the BSE Sensex today fell over 188 points to 16,745.35 as investors sold stocks amid rising interest rates, slowing growth and weak global markets.

Capital goods, banking, power and metals were hit hard. The capital goods sector, which was the worst performer last week after a steep fall in the industrial production, suffered further set back in view of RBI's raising key rate.

The market was also hit by weak trend in the Asian region, with Hong Kong tumbling 2.76 per cent, and lower openings in Europe.

Brokers said the failure of European finance ministers to make progress on the financial rescue plan for Greece, led to heavy sell-offs worldwide.

[xchrom]

50. Gold up by Rs 450, silver surges by Rs 600 on firm global cues

http://timesofindia.indiatimes.com/business/india-business/Gold-up-by-Rs-450-silver-surges-by-Rs-600-on-firm-global-cues/articleshow/10040185.cms

NEW DELHI: Both gold and silver extended gains in the national capital today on sustained buying by stockists, driven by firm global trends.

While gold surged by Rs 450 to Rs 28,610 per 10 grams, silver went up by Rs 600 to Rs 65,000 per kg.

Buying activity in the precious metals picked up after gold gained in London as concerns about deepening European debt crisis spurred demand for the metal as a protection of wealth.

Gold in global markets, which normally sets the price trend on the domestic front, rose by $11.60 to $1,823.47 an ounce in London.

[xchrom]

51. Money lending safer bet than trading for Indian banks

http://economictimes.indiatimes.com/markets/analysis/money-lending-safer-bet-than-trading-for-indian-banks/articleshow/10036853.cms

MUMBAI: It was only last month that Swiss banking giant UBS had announced 3,500 job cuts in a bid to beef up its bottom line. The efforts came to a naught last week when its 31-year-old director of exchange traded funds, Kweku Adoboli, a rising star in the bank, lost $2 billion (Rs 9,400 crore) through unauthorized trading.

The spectacular loss comes at a bad time for Europe where banks are already wary of lending to one another for fears of a sovereign default. The losses have also caused rating agencies to place the bank on notice for a possible downgrade. Adoboli is the latest on the list of rouge traders who have brought giant institutions to their knees. In 2008, the senior management at France's Groupe Caisse d'Epargne quit after another rogue trader, Boris Picano-Nacci, caused losses of $751milion (Rs 3,567 crore) while trading in equity derivatives. But the record holder for losses continues to be JA©rA'me Kerviel, who dealt Societe Generale a body blow with losses of $7 billion by trading in European stock futures.

A few months before Kerviel came into the news, Joseph Cassano, head of AIG's Financial Products division in London, almost brought down the American giant with losses on credit default swaps-essentially insurance cover on subprime mortgages. It turned out that Cassano sold protection worth several billion dollars on subprime mortgages through the issue of credit default swaps to generate record profits. Morgan Stanley too lost close to $9 billion on trading positions on subprime mortgages. However, these losses which were booked during the thick of the '08 crisis were never classified as rouge trades and Morgan Stanley, instead, sought a government bailout promising to convert itself into a bank.

[InkAddict]

66. Good grief - I took that headline to be about wampum and

beaver pelts taking Manhattan. What you mean, Kemo Sabe?

Guess it's more along the lines of Golden Calf vanity trinkets and drunken-partner swapping.

[Hotler]

55. k&r n/t

[Festivito]

65. Debt: 09/15/2011 14,696,963,569,782.73 (UP 13,053,098,076.67) (Thu, UP a lot.)

(UNDER the new 2011 debt limit of 14.694-trillion dollars by 402.964-billion dollars. Good day.)
The food is starting. Spaghetti, I think.
(Debt under Obama seems to jump up big then drop slowly maybe up a little and down a little for days--repeat.)
= Held by the Public + Intragovernmental(FICA)
= 10,079,888,378,192.40 + 4,617,075,191,590.25
UP 11,965,856,345.50 + UP 1,087,241,731.17

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 313-Million person America.
If every American, man, woman and child puts in $3.20 THAT'S 1B$, and $3,195.92 makes 1T$.
A family of three: Mom, Dad, Child: $9.59, ABOUT TEN BUCKS for a 1B$ 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 another American, so at the end of the workday of the report, there should be 312,898,592 people in America.
http://www.census.gov/population/www/popclockus.html ON 10/04/2010 04:37 -> 310,403,677
Currently, each of these Americans owe $46,970.37.
A family of three owes $140,911.12. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 31 days.
The average for the last 23 reports is 3,538,966,155.61.
The average for the last 30 days would be 2,713,207,385.97.
The average for the last 31 days would be 2,625,684,567.06.
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$/day.
There were 251 reports in 365 days of FY2010 averaging 6.58B$ per report, 4.53B$/day.
There were 238 reports in 350 days of FY2011 averaging 4.77B$ per report, 3.24B$/day.
Above line should be okay

PROJECTION:
There are 493 days remaining in this Obama 1st term.
By that time the debt could be between 15.4 and 17.2T$.
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)
09/15/2011 14,696,963,569,782.73 BHO (UP 4,070,086,520,869.57 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 +1,651,794,027,380.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
FY2011 +1,135,340,538,891.00 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO
Endof11 +1,183,997,990,557.76 ------------* * * * * * * * * * * * * * * * * * * * * * * * * * * * * BHO

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
08/25/2011 +015,444,082,130.78 ------------**********
08/26/2011 +001,003,663,200.19 ------------*********
08/29/2011 -000,073,220,970.90 ---- Mon
08/30/2011 +000,152,580,275.78 ------------********
08/31/2011 +034,126,581,560.14 ------------**********
09/01/2011 +034,131,323,630.30 ------------**********
09/02/2011 +000,182,220,803.10 ------------********
09/06/2011 -000,290,117,782.20 --- Tue
09/07/2011 +015,583,261,687.60 ------------**********
09/08/2011 -006,211,008,386.30 --
09/09/2011 +000,079,600,651.10 ------------*******
09/12/2011 -000,033,661,156.40 ---- Mon
09/13/2011 -000,041,637,039.50 ----
09/14/2011 +000,269,185,032.20 ------------********
09/15/2011 +011,965,856,345.50 ------------**********

106,288,709,981.39 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
http://www.usdebtclock.org/
DUer primer on National debt

(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=4996291&mesg_id=4996338

[RUMMYisFROSTED]

70. Exit, stage left.

[Demeter]

73. You gotta wait for the 3:30 EDT Miracle!

There's always a little fairy dust in DC.....

[Roland99]

74. The 3:15 fairies arrived right on schedule

[Demeter]

78. the Market?

http://www.intriguing.com/mp/_sounds/hg/wound.wav