NEW YORK (AP) -- Back in April, Goldman Sachs CEO Lloyd Blankfein said that the credit crisis, if it were a football game, was "probably in the third or fourth quarter." Eight months later, Goldman analysts are saying the current credit cycle has only now reached half-time.
Investment research analysts at Goldman issued a report Monday that said banks are "only halfway through a three-year credit cycle" -- indicating how much more prolonged than predicted the industry's struggles will be.
and this
Discussion at Monday's forum, sponsored by the federal Office of Thrift Supervision, focused on how broad the government's intervention should be, rather than whether the government should play any role at all. The U.S. is on track for 2.25 million foreclosures this year, more than double traditional levels.
New data released Monday show that more than half of all homeowners who had their loans modified to make the payments more affordable in the first half of the year are already in default again.
The data raise questions about whether government money may be better spent on creating jobs, rather than averting foreclosures, said John Reich, director of the federal Office of Thrift Supervision. "I do have concerns about allocating federal resources," to such an effort, he said.
But the reports aren't detailed enough to show how well the programs are working or which borrowers have been most helped, said Sheila Bair, chairman of the Federal Deposit Insurance Corp. and a proponent of broadening loan assistance efforts.
VIX still HIGHLY elevated here....not budging much today
Monday, December 08, 2008
WE CAN ALL RELEASE A BIG SIGH NOW?
And now we hit a NEW LOW for the BDI, friends.....I want a recovery too! WIshing and hoping dont make it so, these rates are VERY sensitive to economic conditions. A turn UP is what we would like to see......how long does it take for stuff to be tunred into things? especially if it isnt even on the water yet?
D
Friday, December 05, 2008
DOW CRASHES
http://broadcast.ino.com/education/the_dow_crashes/ This INO broadcast takes you up to last weeks big downer, helpful especially to those not strong in Technical anlysis
Dow strong in face of bad news? Some stocks still look cheap to some....beginning of mnth cash coming in, too early to get opinion as is the bottom in.....I am leaning sill I dont believe so
D
Dow strong in face of bad news? Some stocks still look cheap to some....beginning of mnth cash coming in, too early to get opinion as is the bottom in.....I am leaning sill I dont believe so
D
Thursday, December 04, 2008
COMMENTARY ON RETAILERS
ETFguide.com
Are Retailers a Bargain?Monday December 1, 12:34 pm ET By ETFguide.com
SAN DIEGO (ETFguide.com) - Don't let the crowded stores and the long lines fool you. The 2008 holiday shopping season may turn out to be just the kind that Scrooge would love.
Deep discounts by eager retailers may be ringing in higher sales volume, but in dollar terms, sales are likely to fall. The National Retail Federation estimates that shopper's spent 7.20% more this past weekend compared to last year. However rosy that may sound, it still might not help the sinking stock prices of major consumer retailers.
In the third quarter alone, consumer spending declined by 3.70% on an annualized basis. That was the steepest decline in 25 years. According to some economists, the fourth quarter spending numbers are expected to be even worse.
The performance of stocks in the retailing sector has been a mixed bag.
Over the past year, Macy's (NYSE: M - News), Tiffany (NYSE: TIF - News), and Target (NYSE: TGT - News) have seen their stock prices cut in half whereas Wal-Mart (NYSE: WMT - News) and Family Dollar Stores (NYSE: FDO - News) have bucked the trend by gaining. This is a strong signal that consumers are still spending, but opting to do business with discount retailers.
Consumer demand for big-ticket items has been particularly weak and confounded by a deteriorating job market. The appetite for appliances, automobiles and large-screen televisions is spiraling as October's sagging 6.20% fall in orders for durable goods indicates.
The other problem facing retailers is consumers that have money, aren't spending as much of it. The Conference Board reports that consumer confidence is at 41-year lows.
Exchange-traded funds (ETFs) that follow the sector like the SPDR S&P Retail ETF (AMEX: XRT - News) are off by 44.57% and the S&P Consumer Discretionary Stocks (NYSEArca: XLY - News) are down 36.77%.
XLY contains 81 stocks involved in apparel, leisure, hotels, and restaurants. The three largest holdings in XLY are McDonald's, Comcast, and Walt Disney. The consumer discretionary is less defensive compared to consumer staples (NYSEArca: XLP - News). The latter is the best performing S&P 500 sector so far this year.
XRT is actually a blend of two retailing sub-sectors: Consumer discretionary and consumer staples. Discretionary has a high sector weighting inside XRT (nearly 80%) compared to just 20% for the more defensive staples. Wal-Mart, CVS Caremark, and Target are the top three holdings among the 55 holdings within the ETF.
The Retail HOLDRS (NYSE: RTH - News) is an unmanaged basket of retailing stocks and it follows no particular index or benchmark. This means that RTH is never rebalanced and companies contained within it are not replaced if they merge or go out of business. With only 18 stocks, RTH is far from an accurate measure or benchmark of what's really going on in the retail sector.
Other ETFs, like the PowerShares Dynamic Retail (AMEX: PMR - News) are attempting to outperform traditional benchmarks within the retailing sector. PMR has declined 26.29% this year, which is better than most funds tracking the same area.
As the failure of CircuitCity, Mervyns, and Linen & Things illustrates, surviving in the hyper-competitive retail sector is very difficult right now. More bankruptcies are likely to follow as more companies compete for fewer customers and fewer revenues. We could be entering just the second or third inning of a major shakeup in consumer retailers.
Still, not all is doom and gloom. One of the few bright spots remains a smaller but growing segment known as online retailing.
Unlike their traditional brick-and-mortar counterparts, Website operators don't have the burden of high overhead and overbearing lease obligations. Stocks like Amazon.com, eBay and Yahoo are typically included in this particular group and are included as top holdings within retail oriented ETFs.
**If Recession deepens....retailers could come under new selling pressure...but today many and a few goldies were green.
D
Are Retailers a Bargain?Monday December 1, 12:34 pm ET By ETFguide.com
SAN DIEGO (ETFguide.com) - Don't let the crowded stores and the long lines fool you. The 2008 holiday shopping season may turn out to be just the kind that Scrooge would love.
Deep discounts by eager retailers may be ringing in higher sales volume, but in dollar terms, sales are likely to fall. The National Retail Federation estimates that shopper's spent 7.20% more this past weekend compared to last year. However rosy that may sound, it still might not help the sinking stock prices of major consumer retailers.
In the third quarter alone, consumer spending declined by 3.70% on an annualized basis. That was the steepest decline in 25 years. According to some economists, the fourth quarter spending numbers are expected to be even worse.
The performance of stocks in the retailing sector has been a mixed bag.
Over the past year, Macy's (NYSE: M - News), Tiffany (NYSE: TIF - News), and Target (NYSE: TGT - News) have seen their stock prices cut in half whereas Wal-Mart (NYSE: WMT - News) and Family Dollar Stores (NYSE: FDO - News) have bucked the trend by gaining. This is a strong signal that consumers are still spending, but opting to do business with discount retailers.
Consumer demand for big-ticket items has been particularly weak and confounded by a deteriorating job market. The appetite for appliances, automobiles and large-screen televisions is spiraling as October's sagging 6.20% fall in orders for durable goods indicates.
The other problem facing retailers is consumers that have money, aren't spending as much of it. The Conference Board reports that consumer confidence is at 41-year lows.
Exchange-traded funds (ETFs) that follow the sector like the SPDR S&P Retail ETF (AMEX: XRT - News) are off by 44.57% and the S&P Consumer Discretionary Stocks (NYSEArca: XLY - News) are down 36.77%.
XLY contains 81 stocks involved in apparel, leisure, hotels, and restaurants. The three largest holdings in XLY are McDonald's, Comcast, and Walt Disney. The consumer discretionary is less defensive compared to consumer staples (NYSEArca: XLP - News). The latter is the best performing S&P 500 sector so far this year.
XRT is actually a blend of two retailing sub-sectors: Consumer discretionary and consumer staples. Discretionary has a high sector weighting inside XRT (nearly 80%) compared to just 20% for the more defensive staples. Wal-Mart, CVS Caremark, and Target are the top three holdings among the 55 holdings within the ETF.
The Retail HOLDRS (NYSE: RTH - News) is an unmanaged basket of retailing stocks and it follows no particular index or benchmark. This means that RTH is never rebalanced and companies contained within it are not replaced if they merge or go out of business. With only 18 stocks, RTH is far from an accurate measure or benchmark of what's really going on in the retail sector.
Other ETFs, like the PowerShares Dynamic Retail (AMEX: PMR - News) are attempting to outperform traditional benchmarks within the retailing sector. PMR has declined 26.29% this year, which is better than most funds tracking the same area.
As the failure of CircuitCity, Mervyns, and Linen & Things illustrates, surviving in the hyper-competitive retail sector is very difficult right now. More bankruptcies are likely to follow as more companies compete for fewer customers and fewer revenues. We could be entering just the second or third inning of a major shakeup in consumer retailers.
Still, not all is doom and gloom. One of the few bright spots remains a smaller but growing segment known as online retailing.
Unlike their traditional brick-and-mortar counterparts, Website operators don't have the burden of high overhead and overbearing lease obligations. Stocks like Amazon.com, eBay and Yahoo are typically included in this particular group and are included as top holdings within retail oriented ETFs.
**If Recession deepens....retailers could come under new selling pressure...but today many and a few goldies were green.
D
BULL OR BEAR TRAP?
http://community.investopedia.com/news/cadvisor/cotd/archive/OIH20081201.aspx?partner=YahooSA OIL and GAS charts from Investopedia
Wednesday, December 03, 2008
HAIR OF THE DOG
Can you force a recovery based on more borrowing when their is no home equity for those in trouble and that is what got us here in the first place? Where asking for help from most of the same idiots who got us here!
Fed: Economy darkens heading into holidaysWednesday December 3, 2:05 pm ET By Jeannine Aversa, AP Economics Writer
Fed: Economic picture darkens heading into holidays; hurting jobs, retailers, factories
WASHINGTON (AP) -- The country's economic picture has darkened further as Americans hunkered down heading into the holidays, forcing retailers to ring up fewer sales and factories to cut back on production.
The Federal Reserve's new snapshot of business conditions nationwide, released Wednesday, suggested the economy was sinking deeper into recession.
"Economic activity weakened across all Federal Reserve districts," the report concluded.
The Fed didn't use the word "recession," but just two days earlier the National Bureau of Economic Research declared what many Americans already knew in their bones: that the country had been suffering through one since last December.
To cushion the fallout, Federal Reserve Chairman Ben Bernanke said Monday that the central bank is prepared to lower its key interest rate and to explore other ways to revive economic activity. Many economists predict the Fed will cut its rate -- now near a historic low of 1 percent -- at its last scheduled meeting this year on Dec. 16.
With jobs vanishing, shoppers cut back, causing retail sales to be "weak" or "down" in most of the Fed's 12 regions.
"Retailers were preparing for a relatively slow holiday sales season," the Fed report said. New York retailers said the holiday sales season is likely to feature more discounted prices on merchandise than last year. Some retailers in the Fed regions of Boston, Philadelphia, Cleveland and Dallas planned to cut capital spending projects for 2009.
Consumer spending -- which includes retail sales -- is a major shaper of national economic activity. Job cuts, tanking investment portfolios and sinking home values have made American consumers, however, wary of spending.
ShopperTrak RCT Corp., a research company that tracks total retail sales for more than 50,000 outlets, released more data Wednesday showing that the better-than-expected sales boost on Friday, the traditional opening for the holiday shopping season at stores, fizzled quickly during the rest of the weekend -- resulting in a mixed start to the season.
The economy jolted into reverse in the summer as consumers slashed their spending by the most in 28 years.
Many believe the economy will continue to shrink through the rest of this year and into the first quarter of next year. At 12 months and counting, the current recession is longer than the 10-month average length of recessions since World War II. The record for the longest recession in the postwar period is 16 months, which was reached in the 1973-75 and 1981-82 downturns.
Besides retail sales, auto sales were down sharply in most Fed regions. Car buyers in many areas had difficulty obtaining financing, a direct result of the credit crisis, the report said.
The chiefs of Chrysler LLC, General Motors Corp. and Ford Motor Co. are preparing to return to Capitol Hill on Thursday and Friday to again make their case for as much as $34 billion in emergency aid.
At factories, "manufacturing activity declined noticeably" since the Fed's last report in mid-October. Similarly, activity in the services sector contracted in most Fed regions.
In a separate report Wednesday, the U.S. service sector, which includes hotels, retailers and other industries, saw activity shrink more than expected in November. The Institute for Supply Management, a trade group of purchasing executives, said readings for new orders, employment and prices all hit the lowest levels on records dating back to 1997.
The Fed's survey suggested that businesses have little appetite to hire.
Employers in the Fed regions of Boston, Richmond, Chicago and Dallas reported that demand for temporary workers dropped. Employers in the regions of Boston and Cleveland also reported that seasonal hiring had been scaled back at retail stores. Employers in Atlanta noted that layoffs have accelerated and workers' hours declined. Employers in the San Francisco Fed region reported job cuts and hiring freezing across a wide range of industries.
The nation's unemployment rate jumped in October to 6.5 percent, a 14-year high. So far 1.2 million jobs have vanished this year and the losses will get worse. Many economists are predicting the jobless rate will climb to 6.8 percent for November and employers will chop another 320,000 jobs. The government releases the new employment report on Friday.
The housing picture continued to look bleak, the Fed report showed.
Sales were down and inventories of unsold homes remained high in most Fed regions. Commercial real-estate markets, meanwhile, "weakened broadly" and pushed up vacancy rates in about half of the Fed's regions, the survey said.
Against this backdrop, both consumer and business lending continued to slow, the Fed said. Despite a $700 billion financial bailout and a flurry of radical new programs, the government hasn't been able to bust through a credit clog that's contributed to the worst financial crisis to hit the country since the 1930s.
The Fed report is based on information supplied by the Fed's 12 regional banks. The information was collected before Nov. 24.
Fed: Economy darkens heading into holidaysWednesday December 3, 2:05 pm ET By Jeannine Aversa, AP Economics Writer
Fed: Economic picture darkens heading into holidays; hurting jobs, retailers, factories
WASHINGTON (AP) -- The country's economic picture has darkened further as Americans hunkered down heading into the holidays, forcing retailers to ring up fewer sales and factories to cut back on production.
The Federal Reserve's new snapshot of business conditions nationwide, released Wednesday, suggested the economy was sinking deeper into recession.
"Economic activity weakened across all Federal Reserve districts," the report concluded.
The Fed didn't use the word "recession," but just two days earlier the National Bureau of Economic Research declared what many Americans already knew in their bones: that the country had been suffering through one since last December.
To cushion the fallout, Federal Reserve Chairman Ben Bernanke said Monday that the central bank is prepared to lower its key interest rate and to explore other ways to revive economic activity. Many economists predict the Fed will cut its rate -- now near a historic low of 1 percent -- at its last scheduled meeting this year on Dec. 16.
With jobs vanishing, shoppers cut back, causing retail sales to be "weak" or "down" in most of the Fed's 12 regions.
"Retailers were preparing for a relatively slow holiday sales season," the Fed report said. New York retailers said the holiday sales season is likely to feature more discounted prices on merchandise than last year. Some retailers in the Fed regions of Boston, Philadelphia, Cleveland and Dallas planned to cut capital spending projects for 2009.
Consumer spending -- which includes retail sales -- is a major shaper of national economic activity. Job cuts, tanking investment portfolios and sinking home values have made American consumers, however, wary of spending.
ShopperTrak RCT Corp., a research company that tracks total retail sales for more than 50,000 outlets, released more data Wednesday showing that the better-than-expected sales boost on Friday, the traditional opening for the holiday shopping season at stores, fizzled quickly during the rest of the weekend -- resulting in a mixed start to the season.
The economy jolted into reverse in the summer as consumers slashed their spending by the most in 28 years.
Many believe the economy will continue to shrink through the rest of this year and into the first quarter of next year. At 12 months and counting, the current recession is longer than the 10-month average length of recessions since World War II. The record for the longest recession in the postwar period is 16 months, which was reached in the 1973-75 and 1981-82 downturns.
Besides retail sales, auto sales were down sharply in most Fed regions. Car buyers in many areas had difficulty obtaining financing, a direct result of the credit crisis, the report said.
The chiefs of Chrysler LLC, General Motors Corp. and Ford Motor Co. are preparing to return to Capitol Hill on Thursday and Friday to again make their case for as much as $34 billion in emergency aid.
At factories, "manufacturing activity declined noticeably" since the Fed's last report in mid-October. Similarly, activity in the services sector contracted in most Fed regions.
In a separate report Wednesday, the U.S. service sector, which includes hotels, retailers and other industries, saw activity shrink more than expected in November. The Institute for Supply Management, a trade group of purchasing executives, said readings for new orders, employment and prices all hit the lowest levels on records dating back to 1997.
The Fed's survey suggested that businesses have little appetite to hire.
Employers in the Fed regions of Boston, Richmond, Chicago and Dallas reported that demand for temporary workers dropped. Employers in the regions of Boston and Cleveland also reported that seasonal hiring had been scaled back at retail stores. Employers in Atlanta noted that layoffs have accelerated and workers' hours declined. Employers in the San Francisco Fed region reported job cuts and hiring freezing across a wide range of industries.
The nation's unemployment rate jumped in October to 6.5 percent, a 14-year high. So far 1.2 million jobs have vanished this year and the losses will get worse. Many economists are predicting the jobless rate will climb to 6.8 percent for November and employers will chop another 320,000 jobs. The government releases the new employment report on Friday.
The housing picture continued to look bleak, the Fed report showed.
Sales were down and inventories of unsold homes remained high in most Fed regions. Commercial real-estate markets, meanwhile, "weakened broadly" and pushed up vacancy rates in about half of the Fed's regions, the survey said.
Against this backdrop, both consumer and business lending continued to slow, the Fed said. Despite a $700 billion financial bailout and a flurry of radical new programs, the government hasn't been able to bust through a credit clog that's contributed to the worst financial crisis to hit the country since the 1930s.
The Fed report is based on information supplied by the Fed's 12 regional banks. The information was collected before Nov. 24.
STRAIGHT TALK RON PAUL
Texas Straight Talk
The Neo-Alchemy of the Federal Reserve
As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems. Now that we are used to rewarding failure with taxpayer-funded bailouts, we are being told that this is “just a start,” more funds will inevitably be needed for more industries, and that things would be much worse had we done nothing.
The updated total bailout commitments add up to over $8 trillion now. This translates into a monetary base increase of 75 percent over the last two months. This money does not come from some rainy day fund tucked away in the budget somewhere – it is created from thin air, and devalues every dollar in circulation. Dumping money on an economy, as they have been doing, is not the same as dumping wealth. In fact, it has quite the opposite effect.
One key attribute that gives money value is scarcity. If something that is used as money becomes too plentiful, it loses value. That is how inflation and hyperinflation happens. Giving a central bank the power to create fiat money out of thin air creates the tremendous risk of eventual hyperinflation. Most of the founding fathers did not want a central bank. Having just experienced the hyperinflation of the Continental dollar, they understood the power and the temptations inherent in that type of system. It gives one entity far too much power to control and destabilize the economy.
Our central bankers have had a tremendous amount of hubris over the years, believing that they could actually manage a paper money system in such a way as to replicate the behavior and benefits of a gold standard. In fact, back in 2004 then Fed Chairman Alan Greenspan told me as much. People talk about toxic assets, but the real toxicity in our economy comes from the neo-alchemy practiced by the Federal Reserve System. Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today’s bankers are poisoning the economy with accelerated fiat money creation.
Throughout the ages, gold has stood the test of time as a consistently reliable medium of exchange, and has frequently been referred to as “God’s money”, as only God can make more of it. Seeking superhuman power over money in the way alchemists did in ancient times caused society to shun them as charlatans. In much the same way, free people today should be sending the message that this power and control over our money is no longer acceptable.
The irony is that even had the ancient practice of alchemy been successful, and gold was suddenly, magically made abundant, alchemists still would have failed to create real wealth. Creating gold from lead would have cheapened its status to that of rhinestones or cubic zirconia. It is unnatural and dangerous for paper to be considered as precious as a precious metal. Our fiat currency system is crumbling and coming to an end, as all fiat currencies eventually do.
Congress should reject the central bank as a failure for its manipulations of money that have brought our economy to its knees. I am hoping that in the 111th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.
Posted by Ron Paul (12-01-2008, 01:07 PM) filed under Monetary Policy
The Neo-Alchemy of the Federal Reserve
As the printing presses for the bailouts run at full speed, those in power are no longer even pretending that the new giveaways will fix our problems. Now that we are used to rewarding failure with taxpayer-funded bailouts, we are being told that this is “just a start,” more funds will inevitably be needed for more industries, and that things would be much worse had we done nothing.
The updated total bailout commitments add up to over $8 trillion now. This translates into a monetary base increase of 75 percent over the last two months. This money does not come from some rainy day fund tucked away in the budget somewhere – it is created from thin air, and devalues every dollar in circulation. Dumping money on an economy, as they have been doing, is not the same as dumping wealth. In fact, it has quite the opposite effect.
One key attribute that gives money value is scarcity. If something that is used as money becomes too plentiful, it loses value. That is how inflation and hyperinflation happens. Giving a central bank the power to create fiat money out of thin air creates the tremendous risk of eventual hyperinflation. Most of the founding fathers did not want a central bank. Having just experienced the hyperinflation of the Continental dollar, they understood the power and the temptations inherent in that type of system. It gives one entity far too much power to control and destabilize the economy.
Our central bankers have had a tremendous amount of hubris over the years, believing that they could actually manage a paper money system in such a way as to replicate the behavior and benefits of a gold standard. In fact, back in 2004 then Fed Chairman Alan Greenspan told me as much. People talk about toxic assets, but the real toxicity in our economy comes from the neo-alchemy practiced by the Federal Reserve System. Just as alchemists of the past frequently poisoned themselves with the lead or mercury they were trying to turn to gold, today’s bankers are poisoning the economy with accelerated fiat money creation.
Throughout the ages, gold has stood the test of time as a consistently reliable medium of exchange, and has frequently been referred to as “God’s money”, as only God can make more of it. Seeking superhuman power over money in the way alchemists did in ancient times caused society to shun them as charlatans. In much the same way, free people today should be sending the message that this power and control over our money is no longer acceptable.
The irony is that even had the ancient practice of alchemy been successful, and gold was suddenly, magically made abundant, alchemists still would have failed to create real wealth. Creating gold from lead would have cheapened its status to that of rhinestones or cubic zirconia. It is unnatural and dangerous for paper to be considered as precious as a precious metal. Our fiat currency system is crumbling and coming to an end, as all fiat currencies eventually do.
Congress should reject the central bank as a failure for its manipulations of money that have brought our economy to its knees. I am hoping that in the 111th Congress my legislation to abolish the Federal Reserve System gains traction so that the central bank can no longer destroy our money.
Posted by Ron Paul (12-01-2008, 01:07 PM) filed under Monetary Policy
Tuesday, December 02, 2008
YIELDS PLUNGE
Current yield now BELOW 2.7% approaching bottom of 23 yr BOND BULL CHANNELhttp://www.nowandfutures.com/key_stats.html M3 reconstructed
Monday, December 01, 2008
FELLOW BLOGGER
http://www.newsneconomics.com/2008/11/all-of-buzzwords-in-one-post.html has some inside slant to what FED is doing.
D
D
HUGE DOWN VOLUME MOVE
Todays down market produced another 90% Down Day as Down Volume was around 98.6% of total NYSE Big Board Up/Down Volume.
Traders back in force today and the result was not pretty, this brings us right back to challenge the lows in place especially if 8,000 breaks again.
Transports lost 9% of value in ONE DAY! VIX rocketed up 22%. I think SPX 800 is a KEY support area as drawn. Descending volume on the rise may have been warning as I pointed out.
Hard to dismiss away this kind of drop by saying "profit taking". It is obvious if 2 back to back 90% UP volume days did not ignite the bulls and show sellers were done.....remember after UPTICK rule was abandoned (IDIOTS) a 90% day has lost SOME of its swagger to predict.
Remember those who crowed about the 20% UP rally...... is not = to the 20% fall from the top.
EX 1000- 20% = 800 800 x120% = 960.
TO STIM OR NOT TO STIM
"The House passed a $61 billion stimulus in September but opposition from Senate Republicans backed by a Bush administration veto threat killed the bill in the Senate.
Pelosi's meeting with the governors came as the National Bureau of Economic Research said the U.S. economy entered a recession in December, 2007.
U.S. unemployment has been rising, the financial industry is reeling even with the recent enactment of a $700 billion government bailout, and Congress must decide whether to rescue domestic automakers, who face a Tuesday deadline to provide Washington with restructuring plans.
Governors and state legislatures are asking Congress to act quickly on an aid and job-creation bill, noting they face severe budget shortfalls in 2009 and 2010.
At $500 billion, the measure would dwarf the $168 billion economic stimulus that was enacted last February, which consisted mostly of tax rebates for families and small business tax benefits.
The new emergency spending would add to spiraling government spending which sent the budget deficit to a record $455 billion in the fiscal year that ended September 30.
Hoping to blunt Republican criticism that Democrats are cobbling together a massive bill full of wasteful spending, Pelosi said the measure would be aimed at "creating jobs for the 21st century," with a focus on energy projects.
Obama has said that his first priority when taking office would be signing an economic stimulus bill into law."
we better hop right on that alt energy bandwagon...Oil drops 9 percent to $49 as OPEC defers cuts
THANK GOODNESS THEY FIGURED IT OUT.......
WASHINGTON (Reuters) - The U.S. economy slipped into recession in December 2007, the nation's business cycle arbiter declared on Monday, and the downturn could be the worst since World War Two.
ANOTHER DUBIOUS TITLE?
"The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that's where we'll continue to focus," White House spokesman Tony Fratto said.
President George W. Bush is the first president since Richard Nixon to preside over two recessions.
President George W. Bush is the first president since Richard Nixon to preside over two recessions.
WE GOT OPTIONS??
Bernanke says Fed has options as rates near zeroMonday December 1, 5:52 pm ET
By Ros Krasny
AUSTIN, Texas (Reuters) - Federal Reserve Chairman Ben Bernanke on Monday urged decisive action to protect the economy and said the central bank had alternative tools it could employ to help as interest rates approach zero.
By Ros Krasny
AUSTIN, Texas (Reuters) - Federal Reserve Chairman Ben Bernanke on Monday urged decisive action to protect the economy and said the central bank had alternative tools it could employ to help as interest rates approach zero.
ALERT ALERT BEN SAYS NEED LOWER RATES TO STIM GROWTH
He said the Fed could directly purchase "substantial quantities" of longer-term securities issued by the U.S. Treasury or government-sponsored agencies to lower yields and stimulate demand.
THIS ASS just doesn't get it? Tie the 2 Paulson and BEN together and you get what? a pair of old mens testicals....
HELOOOOO 10 yr Bond rate just hit LOWEST RATE EVER???!!!! yes....even below that of the great depression...
AND IF THAT DOn'T WORK.....
Bernanke also said the Fed could side-step institutions that are reluctant to lend and pump money directly into specific markets. The Fed has already done this in the market for commercial paper, short-term debt companies use to finance day-to-day operations, and last week it announced a program to push funds into markets for consumer-related debt as well.
Great, I feel MUCH better now!
Note, since I added google analytics to my site we have had hits from 30 countries......I will continue to make this a place worth coming to.
Duratek
D
VOLATILITY INDEX
2 support areas I was watching, no breakdown....a day like today could happen...looks like a 90% downer too.
D
KArl Denninger
Tired of The Crash?
The market and economy will not stop falling apart until:
Paulson is fired and his policies cease.
We have transparency in balance sheets - for every firm on the exchange. No exceptions. All Level 3 asset mark models and assets identified - period.
Bernanke withdraws all his alphabet soup programs or is removed from office and his successor does, and the "crowding out" in the credit markets ceases.
Its that simple, and all three must happen before we will see any sort of sustainable bottom put in.
This doesn't mean we can't have "rip your face off" rallies - we both can and will.
But the market and economy will not bottom until the three things above are done, and the only way that is going to happen is when you make it happen.
That's right. Your 401k is a 201k (and will soon be a 41k) because you (collectively) sat on your butts last October when I started running petitions and because we have managed to garner only 50-odd people at protests.
There should be hundreds of thousands.
There should be general strikes - people who simply refuse to go to work, en-masse, across the nation.
There should have not been one Congressman or woman who voted for the bailout returned to office.
Bottom line: You have and are consenting to this economic depression - and make no mistake, that is exactly what the credit markets are saying we are entering right now.
Remember that more than a year ago Subprime Mortgage Bonds forecast a total meltdown in that industry, and that nearly all of the companies in that space would go bankrupt. We were told that this sort of "Armageddon" scenario would not and could not occur, and that the credit market was playing "histrionics". A number of so-called "smart money" investors (Wilbur Ross anyone?) stepped in and bought these supposedly-undervalued instruments - and promptly got slaughtered when the actual performance was worse than the credit markets were forecasting.
The credit market was right and those who said it couldn't happen were wrong.
Now the credit market is saying that we are going to have more defaults than happened during The Great Depression. That is, it is forecasting a Greater Depression that worse than the 1930s. The TNX (10 year yield) is threatening to break three percent, down another 6% (!) this morning to 3.16%. The bottom going back as far as my charts extend is 3.07%. Almost there.
The 13 Week T-Bill (IRX) stands at 0.1%, which is for all intents and purposes zero. The Effective Fed Funds trading rate has been between 0.2 and 0.3% since the last putative rate cut to 1% - that is, effectively zero.
Corporate AAA commercial mortgage spreads are at extreme wides, standing at over 700 bips; added to reference this means that super senior AAA commercial mortgages now yield more than 10%. Given the level of credit enhancement in these deals this forecasts default rates of more than thirty percent in this space. Similar extreme spreads are found among both the "high grade" and "high yield" corporate bond markets.
The credit market is telling you that we are headed for an S&P 500 trading at three hundred and a DOW at under three thousand. That we are headed for unemployment north of 20% on the U6 (broad) measure, and GDP contraction of twenty percent cumulatively from top to bottom.
That's one person in five in the US without a job, deflation of 20% cumulatively or more in prices, over 2 million businesses going bankrupt in the next three years, and literal starvation and privation - all across America. No part of this nation will be spared.
The market callers are all saying all this is impossible.
Even though every thing the credit market has forecast thus far since this problem began has been not only proved correct but conservative; that is, if you bought believing that it would not be as bad as the credit market is forecasting, you have had your head handed to you.
So who are you going to listen to?
Ben Bernanke ("we won't have a recession") and Hank Paulson ("the economy is fundamentally strong"), along with all the market "callers" on CNBC, who have been wrong every single time for more than 18 months?
Or the credit market which has been right 100% of the time thus far since this crisis began?
Welcome to The Greater Depression, and make sure you remember that the blame for this event belongs to Congress, Henry Paulson, Ben Bernanke, and of course..... you, since you have failed to insist and force your government (and yes, its your government, just as its my government) to stop these clowns.
We will get out of this when - and only when - you stop believing that you can "have a pony", "a chicken in every pot", "economic stimulus", and "free credit for everyone."
Only when we the people (collectively) are either all bankrupted or we come to our senses and demand that the fraudsters be locked up and the bad debt purged by default will the system clear and both the economy and market find a sustainable bottom.
Those are the only two choices folks, and right now, you're choosing bankruptcy and Depression for all.
http://www.denninger.net/ I suggest going to Karl's site and there is a wealth of intelligent writings.
D
The market and economy will not stop falling apart until:
Paulson is fired and his policies cease.
We have transparency in balance sheets - for every firm on the exchange. No exceptions. All Level 3 asset mark models and assets identified - period.
Bernanke withdraws all his alphabet soup programs or is removed from office and his successor does, and the "crowding out" in the credit markets ceases.
Its that simple, and all three must happen before we will see any sort of sustainable bottom put in.
This doesn't mean we can't have "rip your face off" rallies - we both can and will.
But the market and economy will not bottom until the three things above are done, and the only way that is going to happen is when you make it happen.
That's right. Your 401k is a 201k (and will soon be a 41k) because you (collectively) sat on your butts last October when I started running petitions and because we have managed to garner only 50-odd people at protests.
There should be hundreds of thousands.
There should be general strikes - people who simply refuse to go to work, en-masse, across the nation.
There should have not been one Congressman or woman who voted for the bailout returned to office.
Bottom line: You have and are consenting to this economic depression - and make no mistake, that is exactly what the credit markets are saying we are entering right now.
Remember that more than a year ago Subprime Mortgage Bonds forecast a total meltdown in that industry, and that nearly all of the companies in that space would go bankrupt. We were told that this sort of "Armageddon" scenario would not and could not occur, and that the credit market was playing "histrionics". A number of so-called "smart money" investors (Wilbur Ross anyone?) stepped in and bought these supposedly-undervalued instruments - and promptly got slaughtered when the actual performance was worse than the credit markets were forecasting.
The credit market was right and those who said it couldn't happen were wrong.
Now the credit market is saying that we are going to have more defaults than happened during The Great Depression. That is, it is forecasting a Greater Depression that worse than the 1930s. The TNX (10 year yield) is threatening to break three percent, down another 6% (!) this morning to 3.16%. The bottom going back as far as my charts extend is 3.07%. Almost there.
The 13 Week T-Bill (IRX) stands at 0.1%, which is for all intents and purposes zero. The Effective Fed Funds trading rate has been between 0.2 and 0.3% since the last putative rate cut to 1% - that is, effectively zero.
Corporate AAA commercial mortgage spreads are at extreme wides, standing at over 700 bips; added to reference this means that super senior AAA commercial mortgages now yield more than 10%. Given the level of credit enhancement in these deals this forecasts default rates of more than thirty percent in this space. Similar extreme spreads are found among both the "high grade" and "high yield" corporate bond markets.
The credit market is telling you that we are headed for an S&P 500 trading at three hundred and a DOW at under three thousand. That we are headed for unemployment north of 20% on the U6 (broad) measure, and GDP contraction of twenty percent cumulatively from top to bottom.
That's one person in five in the US without a job, deflation of 20% cumulatively or more in prices, over 2 million businesses going bankrupt in the next three years, and literal starvation and privation - all across America. No part of this nation will be spared.
The market callers are all saying all this is impossible.
Even though every thing the credit market has forecast thus far since this problem began has been not only proved correct but conservative; that is, if you bought believing that it would not be as bad as the credit market is forecasting, you have had your head handed to you.
So who are you going to listen to?
Ben Bernanke ("we won't have a recession") and Hank Paulson ("the economy is fundamentally strong"), along with all the market "callers" on CNBC, who have been wrong every single time for more than 18 months?
Or the credit market which has been right 100% of the time thus far since this crisis began?
Welcome to The Greater Depression, and make sure you remember that the blame for this event belongs to Congress, Henry Paulson, Ben Bernanke, and of course..... you, since you have failed to insist and force your government (and yes, its your government, just as its my government) to stop these clowns.
We will get out of this when - and only when - you stop believing that you can "have a pony", "a chicken in every pot", "economic stimulus", and "free credit for everyone."
Only when we the people (collectively) are either all bankrupted or we come to our senses and demand that the fraudsters be locked up and the bad debt purged by default will the system clear and both the economy and market find a sustainable bottom.
Those are the only two choices folks, and right now, you're choosing bankruptcy and Depression for all.
http://www.denninger.net/ I suggest going to Karl's site and there is a wealth of intelligent writings.
D
BACK TO REAL WORLD?
Anyone looking for UPSIDE employment surprise has seen the tooth fairy.....THIS reality we are witnessing is so ugly, so severe.....the bear rallies have been sold and harder and harder to escape deflationary gravity....all should be concerned....when the last goof has called the the bottom and told us HOW COMPELLING values are must have crystal ball for forward earnings I don’t have.
Near 90% down volume IF holds into close would be a real hit to sellers are exhausted theory.
Now maybe gold feels it MUST show deflating values (before it is coveted as safe haven) what really is safe? In liquidation phase. Hedgies trying to STOP $600B flee....
I think of all things the 10 yr yield is SCREAMING "we are Screwed!"
The way gold and oil have sold off, especially OIL and the low 10 yr yields are a dramatic example of deflation IMHO......low gas prices are appreciated but when commodities sell off when FED is easing, when yields fall these are part of a down stock market...signs of WEAKNESS...people get confused.
I am glad I include where VIS support is, this was one piece of bullish puzzle I hadn't seen occur yet...a break of support area.
D
Near 90% down volume IF holds into close would be a real hit to sellers are exhausted theory.
Now maybe gold feels it MUST show deflating values (before it is coveted as safe haven) what really is safe? In liquidation phase. Hedgies trying to STOP $600B flee....
I think of all things the 10 yr yield is SCREAMING "we are Screwed!"
The way gold and oil have sold off, especially OIL and the low 10 yr yields are a dramatic example of deflation IMHO......low gas prices are appreciated but when commodities sell off when FED is easing, when yields fall these are part of a down stock market...signs of WEAKNESS...people get confused.
I am glad I include where VIS support is, this was one piece of bullish puzzle I hadn't seen occur yet...a break of support area.
D
SOME CORRELATION HERE??!!
*Another new LOW for the BDI.
We should see a PULLBACK today in SPX, and when we get the raw data we will have better picture of whether sellers are exhausted.
One retail tracker said US Black Fri sales were UP 3% yr/yr (prior yr/yr was up 8% as comparison) and some are frolicking about as if that is better than expected and sign consumers have some ZING left?
HEAVY HEAVY discounting took place, and long way to go, and a few LESS shopping days this year to last, won't HEAVY promotions cut into profits?
I am not sure we are OUT OF THE WOODS just yet, as credit markets seem still frozen......looking 6 months out......not great sign IMHO
D
Sunday, November 30, 2008
Saturday, November 29, 2008
HEROIC ATTEMPTS TO REFLATE THE BUBBLE
http://research.stlouisfed.org/publications/usfd/page3.pdf
CLoseup of what I recently posted.
Here is more charts and discussion ontopic at Ludwig Von Mises
http://mises.org/Community/forums/t/3992.aspx
With all this why isnt VELOCITY of money growing?
D
CLoseup of what I recently posted.
Here is more charts and discussion ontopic at Ludwig Von Mises
http://mises.org/Community/forums/t/3992.aspx
With all this why isnt VELOCITY of money growing?
D
FLY IN BULLISH ONITMENT?
One-Month Dollar Libor at Three-Week High on Year-End Concern
By Kim-Mai Cutler and Candice Zachariahs
Nov. 28 (Bloomberg) -- The cost of borrowing in dollars for one month stayed at the highest level in three weeks as banks sought funding to bolster balance sheets through year-end amid a global squeeze on credit.
The London interbank offered rate, or Libor, that banks say they charge one another for such loans was unchanged at 1.90 percent today, British Bankers’ Association data showed. The rate rose the most in nine years yesterday. The overnight Libor climbed above the Federal Reserve’s target rate for the first time in almost a month, to 1.16 percent. The Libor-OIS spread, a measure of the willingness of banks to lend, also widened.
“One-month rates are the most sensitive at the moment,” said Sean Maloney, a fixed-income strategist in London at Nomura International Plc. “We are getting to month-end so the rate will cover the turn into 2009 and there’s very limited liquidity in the market.”
With a month to go until the end of 2008, banks are vying for loans that mature after Dec. 31 to strengthen their balance sheets as they prepare to report to investors. Financial institutions mark the value of loans and cash positions at the end of each quarter. The one-month Libor climbed 47 basis points yesterday, the most since 1999.
Banks are hoarding cash on concern interest-rate cuts and government spending plans will fail to avert the worst global slump since World War II. China’s economic deterioration is quickening as the financial crisis spreads, the nation’s top planner said yesterday.
Squeeze in Lending
Credit markets, which began seizing up after BNP Paribas SA halted withdrawals on three funds in August 2007, froze after Lehman Brothers Holdings Inc. collapsed on Sept. 15. Financial institutions posted almost $1 trillion of writedowns and credit losses since the start of 2007.
The Libor-OIS spread, a gauge of cash scarcity among banks favored by former Fed Chairman Alan Greenspan, widened four basis points to 182 basis points. The difference between what banks and the Treasury pay to borrow money for three months, known as the TED spread, rose two basis points to 218 basis points. The spread, which reached a low this year of 76 basis points in May, was at 464 basis points on Oct. 10, the most since Bloomberg began compiling the data in 1984.
“OIS-Libor spreads remain wide,” said Guillaume Baron, a fixed-income strategist at Societe Generale SA in Paris. “We have seen some improvement in conditions for euros, but not in dollars. We can’t explain why. The market’s crazy.”
ECB Deposits
The one-month euro interbank offered rate, or Euribor, that banks say they charge each other declined 4 basis points to 3.57 percent today, according to the European Banking Federation. It jumped 22 basis points yesterday, the most in a year. The three- month rate fell to the lowest level in 21 months, to 3.85 percent, the EBF said.
In a further indication of the squeeze in lending, the European Central Bank registered almost 205 billion euros ($263 billion) of cash deposited by banks yesterday in its overnight facility. It was the seventh straight day the figure surpassed 200 billion euros. The daily average in the first eight months of the year was 427 million euros.
Interest rates on U.S. commercial paper, or CP, rose to the highest level in more than three weeks, according to data compiled by Bloomberg. Rates on the highest-ranked 30-day CP climbed 25 basis points to 1.52 percent, or 52 basis points more than the Fed’s target rate, according to yields offered by companies and compiled by Bloomberg. CP, which matures in 270 days or less, is used by companies to finance daily expenses such as payroll and rent.
‘Trust Not Addressed’
Rates in Asia increased today. Singapore‘s interbank three- month offered rate for U.S. dollar loans, or Sibor, rose two basis points to 2.22 percent, capping the first weekly advance since Oct. 10. Australia’s three-month rate rose 16 basis points to 4.72 percent. South Korea’s one-year cross-currency swap was below zero for a sixth day, showing the nation’s banks are starved of U.S. currency.
“The provision of liquidity is only part of the problem, with solvency and trust still to be fully addressed,” Brian Verlaan, global head of fixed-income research in Singapore at Standard Chartered Plc, said in a note to clients today. “It is the latter that will take longest to mend, with liquidity continuing to be hoarded and interbank-lending activity confined to just the shortest tenors.”
Japan’s three-month rate jumped 3.7 basis points this week to 0.876 percent, the biggest gain since February 2007. A basis point is 0.01 percentage point.
Hong Kong‘s three-month interbank rate, Hibor, fell 4.5 basis points to 1.951 percent, paring its first weekly increase this month.
Libor, the benchmark for $360 trillion of financial products worldwide, is set by a panel of banks in a daily survey by the BBA before noon in London. Members give estimates for how much they would charge for loans ranging from one day to a year in currencies including the dollar, euro, yen and pound. Euribor is set about two hours earlier in a survey by the European Banking Federation. EBF members only give estimates for the cost of borrowing euros.
By Kim-Mai Cutler and Candice Zachariahs
Nov. 28 (Bloomberg) -- The cost of borrowing in dollars for one month stayed at the highest level in three weeks as banks sought funding to bolster balance sheets through year-end amid a global squeeze on credit.
The London interbank offered rate, or Libor, that banks say they charge one another for such loans was unchanged at 1.90 percent today, British Bankers’ Association data showed. The rate rose the most in nine years yesterday. The overnight Libor climbed above the Federal Reserve’s target rate for the first time in almost a month, to 1.16 percent. The Libor-OIS spread, a measure of the willingness of banks to lend, also widened.
“One-month rates are the most sensitive at the moment,” said Sean Maloney, a fixed-income strategist in London at Nomura International Plc. “We are getting to month-end so the rate will cover the turn into 2009 and there’s very limited liquidity in the market.”
With a month to go until the end of 2008, banks are vying for loans that mature after Dec. 31 to strengthen their balance sheets as they prepare to report to investors. Financial institutions mark the value of loans and cash positions at the end of each quarter. The one-month Libor climbed 47 basis points yesterday, the most since 1999.
Banks are hoarding cash on concern interest-rate cuts and government spending plans will fail to avert the worst global slump since World War II. China’s economic deterioration is quickening as the financial crisis spreads, the nation’s top planner said yesterday.
Squeeze in Lending
Credit markets, which began seizing up after BNP Paribas SA halted withdrawals on three funds in August 2007, froze after Lehman Brothers Holdings Inc. collapsed on Sept. 15. Financial institutions posted almost $1 trillion of writedowns and credit losses since the start of 2007.
The Libor-OIS spread, a gauge of cash scarcity among banks favored by former Fed Chairman Alan Greenspan, widened four basis points to 182 basis points. The difference between what banks and the Treasury pay to borrow money for three months, known as the TED spread, rose two basis points to 218 basis points. The spread, which reached a low this year of 76 basis points in May, was at 464 basis points on Oct. 10, the most since Bloomberg began compiling the data in 1984.
“OIS-Libor spreads remain wide,” said Guillaume Baron, a fixed-income strategist at Societe Generale SA in Paris. “We have seen some improvement in conditions for euros, but not in dollars. We can’t explain why. The market’s crazy.”
ECB Deposits
The one-month euro interbank offered rate, or Euribor, that banks say they charge each other declined 4 basis points to 3.57 percent today, according to the European Banking Federation. It jumped 22 basis points yesterday, the most in a year. The three- month rate fell to the lowest level in 21 months, to 3.85 percent, the EBF said.
In a further indication of the squeeze in lending, the European Central Bank registered almost 205 billion euros ($263 billion) of cash deposited by banks yesterday in its overnight facility. It was the seventh straight day the figure surpassed 200 billion euros. The daily average in the first eight months of the year was 427 million euros.
Interest rates on U.S. commercial paper, or CP, rose to the highest level in more than three weeks, according to data compiled by Bloomberg. Rates on the highest-ranked 30-day CP climbed 25 basis points to 1.52 percent, or 52 basis points more than the Fed’s target rate, according to yields offered by companies and compiled by Bloomberg. CP, which matures in 270 days or less, is used by companies to finance daily expenses such as payroll and rent.
‘Trust Not Addressed’
Rates in Asia increased today. Singapore‘s interbank three- month offered rate for U.S. dollar loans, or Sibor, rose two basis points to 2.22 percent, capping the first weekly advance since Oct. 10. Australia’s three-month rate rose 16 basis points to 4.72 percent. South Korea’s one-year cross-currency swap was below zero for a sixth day, showing the nation’s banks are starved of U.S. currency.
“The provision of liquidity is only part of the problem, with solvency and trust still to be fully addressed,” Brian Verlaan, global head of fixed-income research in Singapore at Standard Chartered Plc, said in a note to clients today. “It is the latter that will take longest to mend, with liquidity continuing to be hoarded and interbank-lending activity confined to just the shortest tenors.”
Japan’s three-month rate jumped 3.7 basis points this week to 0.876 percent, the biggest gain since February 2007. A basis point is 0.01 percentage point.
Hong Kong‘s three-month interbank rate, Hibor, fell 4.5 basis points to 1.951 percent, paring its first weekly increase this month.
Libor, the benchmark for $360 trillion of financial products worldwide, is set by a panel of banks in a daily survey by the BBA before noon in London. Members give estimates for how much they would charge for loans ranging from one day to a year in currencies including the dollar, euro, yen and pound. Euribor is set about two hours earlier in a survey by the European Banking Federation. EBF members only give estimates for the cost of borrowing euros.
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