*Market action, yes ugly AGAIN! oversold and cant rally....yet, Transports were KILLED today down near 7%. This is a generational SECULAR (long term) BEAR MARKET. If we make it past this thing I don't think we will ever witness anything like this in our lifetimes.
I'm beating a dead horse....read below.
http://market-ticker.denninger.net/authors/2-Karl-Denninger excellent site, he has been more right than most!
More GE (IMPORTANT)
Off the wires, no link.
"DJ reports GE Capital credit default swaps worsen even as GE released a statement emphasizing its strong cash position. The CDS are most recently quoted at 17.5 points up front, from 16.5 points up front earlier today, according to Phoenix Partners Group. That means investors must pay $1.75 mln up front, plus a $500,000 annual fee, to protect $10 mln of GECC senior bonds against default for five years."
That means the first year cost is $1.75 + $500k, or $2.25 million.
That's 22.5% first year cost to insure $10 million against default!
This means that the market is saying that the odds of GE going bankrupt within the next twelve months is greater than one in five, and that assumes zero recovery.
If the bonds would recover more than 80% in the event of a default then it is implying more than a 100% risk of default, which is obviously impossible.
This is occurring despite GE's CFO appearing this morning on CNBC making the case quite clearly that there is no risk of default under any materially possible scenario. In other words, his assertion is that the odds of default are zero.
One of two things must be true:
GE's CFO is lying and must be indicted for doing so.
This so-called "market segment" (CDS) has become so ridiculously overlevered, unsupervised and able to cause failures that it is now within days or even hours of CAUSING GE to fail - not due to GE's own internal problems, but due to positive feedback that the CDS market is capable of and is generating on the initiative and as a consequence of the action of participants in that market.
Either way a major change needs to occur right here and now, lest we find ourselves with no pensions, no Social Security, no Medicare, no annuities and no government.
THIS CAN NO LONGER BE DELAYED OR TOYED AROUND WITH; WHEN "THE BEZZLE" REACHES THE POINT THAT IT STARTS DESTROYING THE NATIONAL CORPORATE INDUSTRIAL GIANTS THAT MAKE UP OUR ESSENTIAL INFRASTRUCTURE, MILITARY AND COMMERCIAL ENTERPRISES THROUGH NO FAULT OF THEIR OWN IT IS A NATIONAL SECURITY EMERGENCY AND MUST BE DEALT WITH IMMEDIATELY.
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The Way We'll Be
Highest And Lowest Earners Both Hit By Recession
John Zogby, 03.05.09, 12:00 AM EST
Everyone is cutting back spending.
We know that the economic damage of this recession is being felt across all business sectors and demographic groups. A recent Zogby Interactive survey provides a more detailed look at how people have been impacted. It shows how far the economy has fallen and gives clues to what it will look like when recovery is achieved.
This poll of 1,474 likely voters conducted on Feb. 23 and 24 (margin of error +/-2.6%) listed a number of possible effects the recession had in the past year on them or a member of their household. That makes our numbers larger than they would be for individuals but perhaps are a better gauge of how families are coping. Our questions had to do with things like job or income loss, inability to buy or make payments and where they had decreased spending.
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Yahoo! BuzzWe also asked if respondents had lost more than 10% of the value of their market investments. We chose a relatively low percentage to learn how many families have some stake in the markets and are being hurt by the loss of stock values. Overall results showed 51% had lost that much or more, among them 30% of households earning less than $50,000. For those earning above $75,000, the total was 74%.
There were 15 possible effects listed in the survey, and 9% said none of these negative consequences happened in their households. Neither income nor other key demographic factors set these people apart from others. So no group has been immune from the recession.
It is a given that the poor always suffer most in hard times. Right now they are experiencing higher levels of job loss and dislocation and are having the most difficulty paying bills. The middle class is more likely to be losing pay and benefits. Even upper-income households are spending less on everything, including groceries and health care. As expected, discretionary spending took the biggest hit. However, let's first look at spending on basic needs like food, groceries and health care, as well as total job compensation and job loss.
Overall, 40% had spent less on food and groceries in the past year, but for households earning less than $25,000 annually, the number was 64%. However, 28% of those making more than $100,000 also decreased grocery purchases. (That is the highest income level we measure. Going higher would make sample sizes too small to confidently measure.)
We asked if people had gone without medical or prescription drug care and overall 16% said yes. There was a similar income disparity: 34% for the lowest group, but still 10% for those above $100,000.
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Fourteen percent of households experienced a job loss, and the same number took a pay or benefit decrease. Eleven percent were in jobs that paid less than their previous employment. The poor were more likely to have lost a job and/or to hold one that made less. Twenty-five percent of households in the $75,000-$100,000 bracket took a compensation cut.
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