BEHIND THE BANK EARNINGS NUMBERS "BANKS DEPLETING EARNINGS BACKSTOP"

http://finance.yahoo.com/news/banks-depleting-earnings-backstop.html
"The rainy-day funds that U.S. banks have been tapping to boost their earnings could soon begin to dry up, and that doesn't bode well for bank profits.

Many banks have been "releasing" reserves against bad loans since the worst of the crisis passed and the economy began recovering. That money flows to the bottom line, helping some banks boost earnings at a time when lending and trading profits have been soggy.

But with loan-loss cushions now receding toward precrisis levels, some analysts doubt banks can afford to keep up the pace of reserve releases. Lowering reserve releases could increase pressure on profits that are being hit by slow economic growth, low interest rates and tighter rules.

The releases are "masking some horrible operating performance," said Mike Mayo, a banking analyst for Crédit Agricole Securities. "The bottom line is your earnings power is decreasing."

MISINFORMATION SOCIETY. LET'S CHEER EMPLOYMENT DATA?

http://market-ticker.org/akcs-www?post=201459  full post by Denninger.

The story of the reach of GS again almost sounds like fantasy...extreme point of view until you let it sink in, and NO arrests in the scandal of century.

GOOD reason VOLUME doesn't accompany this mkt higher....the players can have fun on paper....but the populace has been stunned out of the market, or at least to follow it like they used to.

WHAT IS a breakout to new highs without confirming volume?

All those DROPPED OFF THE LIST, not finding opportunity as it is presented by THEIR data..have no voice. "FED DIDN'T SEE THIS DATA..." my ASS they didn't....

If all is going in right direction, normalize rates......can or will the mkt do it for them?  FED "we have all the tools to take the liquidity out of market, we would be SELLERS....." yeah

USING BULLISH PER CENT INDEX

*click to enlarge

The Goldman Sachs subprime scandal

**Why do I bring this up again? Not ONE (1, single, nada) person has been made to pay for the worst financial crisis in our history....not 1. And at the same time our own Congress can't put forth legislation to make it illegal for them and ONLY them to profit from "INSIDER INFORMATION". Is it any wonder to see why their approval rating is lower than our Presidents?

http://www.thecasualtruth.com/story/goldman-sachs-subprime-scandal

The Goldman Sachs subprime scandal

Wednesday 21st April 2010

Wednesday 21st April 2010

Read a 30-second background on:

The US sub-prime mortgage crisis explained

Wall Street kingpin Goldman Sachs was last week charged with investor fraud by America’s financial referee, the Securities and Exchange Commission (SEC).
The shock announcement rattled nerves across the stock markets, with Goldman’s own share price falling by 13%.
But the bank has come out firing, saying the charges have no basis in fact or law and it will vigorously defend both the firm and its reputation.
The alleged fraud occurred in 2007 – about the time the US housing market was faltering.
The SEC says Goldman Sachs advised two of its clients to accept a US$1 billion bet over sub-prime mortgage bonds that they knew were going to fail.
They say Goldman did not tell the clients that the person they were betting against, John Paulson, had actually fixed the odds in his favour.

CHALLENGER REPORTS JOB CUTS ON THE RISE

http://money.cnn.com/2012/02/02/news/economy/jobs_challenger/index.htm?iid=HP_LN

LOW RATES ACTUALLY HURT RECOVERY SAYS PIMCO's GROSS

http://finance.yahoo.com/news/feds-low-rates-killing-credit-191230965.html
"The Federal Reserve's zero-interest-rate policy is hampering economic recovery by discouraging bank lending, Pimco bond titan Bill Gross said in an analysis.

For banks, a healthy lending environment exists where they can borrow at low rates in the short term and lend at significantly higher rates over the long term, a situation that creates a profit through a positively sloped yield curve ."

And from FED PLOSSER
http://finance.yahoo.com/news/plosser-slams-feds-2014-low-133821640.html

"GLADWYNE, Pennsylvania (Reuters) - A top Federal Reserve official sharply criticized the U.S. central bank's decision last week to telegraph ultra low interest rates for nearly three more years, saying on Wednesday the move undermined confidence and caused confusion.
 The Fed's policy-setting committee, citing a bleak outlook for the fragile economic recovery, said last week it expected to keep rates "exceptionally low" at least through late 2014. The forecast, which was contingent on economic conditions, pushed the target date some 18 months later than a previous forecast, and it sparked a rally in stocks and bonds."

CONSUMER CONFIDENCE RECOVERY?

http://www.tradingeconomics.com/united-states/consumer-confidence  The level is about HALF what it is normally this far into "RECOVERY".
The worldwide money printing by the Central Banks is floating the stock markets in a sea of freshly printed fiat in an attempt to never have to pay the piper.

The FED comes out and says for another 3 years rates will stay at 0%, meaning savers and conservative investors who RELY on returns to live have only ONE PLACE to put down their chips.

And in the end, the HOARD of players in the bond market at SKIMPY rates and those in stocks will be trapped. AS it is, there is little volume outside of the manipulators, the HFT's.

WE have OFFICIALLY 2.8 GDP, but 3.5 is needed to create jobs in a meaningful way. The unemployment drop is mostly from long time unemployed just giving up, or settling for part time or jobs that pay 50% of what they used to make, if lucky to find one.

WE have an engineered economy, one that evidently cannot stand on its own 2 feet, or interest rates would float in an open and free market.

Manipulation, and regulation can work for a time, but in the end, I am afraid the end game is being made much more dramatic, details to come. "Castles made of sand, slip into the sea, eventually".

D

HISTORIC ADJUSTMENT UNDERWAY

"IT AIN'T OVER TIL IT'S OVER"

http://www.contraryinvestor.com/moprinter.htm

LIVING IN A QE WORLD

http://www.ritholtz.com/blog/2012/01/living-in-a-qe-world/  MUST READ!

D

IF IT QUACKS LIKE A DUCK

" And forgive me one last time for thinking that the invincible hand of the Federal Reserve – along with unfathomable global central bank liquidity creation – further bolsters boom and bust dynamics and heightens the risk of further rounds of global de-leveraging and de-risking. If it looks like a Bubble, smells like a Bubble…"

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10625

The announcement by the Federal Reserve to keep interest rates at the lowest levels since the Great Depression, basically at 0% to Banks, keeps the "risk on" trade flowing. Did anyone notice the subsequent thrashing the US $ got this week? falling to neat 78.00 from above 80.00 in the index....and GOLD caught a bid back above $1,700 an ounce! who said the gold bull was dead?

2.8 US GDP would have been higher had not State and Local governments not tightened their belts. Locally here in MD some of the Defense Contracting firms have been laying off workers....The budget for Defence spending for 2012 is somewhere near $600B, larger than all countries in the world combined....what cutback?

Local State Govt's work on passing new measures to TAX MORE, so they can bridge their budget deficit gaps, the US GOVT does not have to worry about such things.....I mean we're not Greece for goodness sakes. (see how my language has moderated? WTF????) The cool thing is, the US has the world's reserve currency, and that's our trump card......ramp up the printing...deficits don't matter.

Now, as I go around in my daily meanderings, I talked to a service tech writer at a local Toyota dealership and she hasn't had a wage increase in 3 years. Our Govenor is forced to RAISE TAXES to cover the state deficits...one will be the gas tax..oh boy, that certainly hits the rich in the mouth....not

More states want to tax internet sales, in 1992 the US SUpreme COurt upheld states cannot tax companies that do not have physical pressence in the state they do business...here come the lawsuits.

Hey did you hear Obama wants to go more green? Create more jobs in alternative energy? wasn't that a campaign promise 3 years ago? That's what ALL politicians are good at, promising stuff.....

Finally Obama made a stand and made public the fact that it isn't fair for politicians to trade on INSIDER INFO....I'd sign a bill on my desk today....did he get one?

Dem's suck, Repub's suck, and no one is voting Ron Paul in....how's that "AUDIT THE FED" GOING?

WHat's an avg investor to do? Can't get ANY return on safe savings, about only thing left is the stock market of which they still seem to shun in droves.

D

Housing data points to slowdown in sales

Reuters –

• A view of a house for sale is seen in Los Angeles in this February 24, 2010 file photo. REUTERS/Mario Anzuoni/Files

"By Lucia Mutikani
WASHINGTON (Reuters) - Signed contracts for the sale of existing U.S. homes retreated from a 1-1/2-year high in December and demand for home loans fell last week, pointing to a moderation in home sales after recent hefty gains."

BUT.....isn't it great news that the FED will keep rates at 0% for another 2 years....as it is working SO well.

D

BDI COLLAPSING

WEEKLY TRIANGLE

Can't compare to 2008 top anymore, so it will be interesting to see
if the top from 2007 and 2011 (red dashed) offer any resistance in the coming week.

D

WEEKEND POST "WHAT PRICE MANIPULATION?"

ALL this liquidity.....should be IGNITING world growth  and fuel rampant inflation in a perfect world, but my guess is DEFLATION is sucking it up, leaving slow to modest growth at best.

WHAT will be the price for 3 years of 0% rates? and counting?  Ron Paul the sole political voice of reason.....pay the piper, stop manipulating, then move on...never happen.... booms and bubble bursts continue. 3 years into the bubble cycle....I stand aside!

HEY but the market is moving higher......get on board the GRAVY TRAIN??!!!!  Underneath the move is weak demand, tepid volume and laser like stock selection.....not BROAD BASED, NOT BACKED BY IMPRESSIVE VOLUME.

You can print NEW MONEY to take the place of the old money, gold should be at $5,000 an ounce not $1,600 but it was $300 when this mess began in 2001.

OFFICIAL unemployment still near 8.5% 3 years into "recovery", things just don't add up for me. 3 years into "recovery" FED keeps rates at 0%, savers get zilch, investors little choice but equity risk markets and yet......the low volume and partial participation continue.....have the gamesmanship and 2 bear markets caused a large group to exit and not return?

HFT makes up 50% or more of daily volume, in the old days a vote for a company used to be an individual share bought, now computer programs seek out little divergences and trade for pennies of a move....not what you would call commitment.....10 year bonds yield slightly north or south of 2%.....who can live on that?
Dem's want to give it away, tax it away, Repub's want to protect their bourgeoisie constituency and won't allow any discussion of taxing the ULTRA WEALTHY more than current rate.

CEO'S use to make 7-10 X the avg worker.....now it's 1,000's X more......every share you buy then puts the money into the pockets of the insiders with MILLIONS of shares VERY HAPPY to cash their 0 COST paper shares for your hard earned capital.

Politicians can PROFIT from INSIDER INFO, but they will out YOU in jail for same.......apathy.....no one in any party offers any real difference, choice or new ideas.

Where does all this lead us to?

D

"THOUGHTS ON THE CRISIS OF CAPITALISM"

" And the rules of the game have become dangerously clear: policymakers will do any and everything to sustain a global Credit system some years ago exposed as dysfunctional and a risk to Capitalism. Governments are conspicuously against the bearing of consequences, and market participants are being heavily incentivized to play it that way."

http://prudentbear.com/index.php/creditbubblebulletinview?art_id=10623

CLAIMS

"NEW YORK (CNNMoney) -- Initial jobless claims fell to their lowest level in nearly four years, another sign of improvement in the long-suffering labor market.
The Labor Department reported that 352,000 people filed for initial unemployment benefits last week, down sharply from a revised reading of 402,000 claims in the previous week. It is also the fewest number of people filing for jobless claims since the week ending April 19, 2008."

ARE THERE MORE JOBS? OR after nearly 3 years of a MUTED recovery fueled mostly by LOW interest rates, have many just stopped looking and other dropped off the roles of the counted as 2 years of benefits run out? LIES, STATISTICS, AND DAMNED LIES

Rate on 30-Year Mortgage Hits New Record Low

AP
The average rate on the 30-year fixed mortgage fell again this week to a record low 3.88%, but the eighth record low in a year is attracting few takers because most who can afford to buy or refinance have already done so. More »Rate on 30-Year Mortgage Hits New Record Low

D

THOUGHT THIS WAS OLD NEWS?

As Debt Talks Stumble, Greece Warns of Disaster

Reuters
Talks between Greece and its creditor banks aimed at avoiding a disorderly default broke down on Friday, with Greeks warning of disastrous results if a bond swap deal is not reached soon.

**Buyer of the markets beware.

D

PRESIDENT OBAMA, BRING OUR BOYS HOME!

Pentagon: IED killed 3 airmen in Afghanistan

Staff report
Posted : Saturday Jan 7, 2012 8:52:30 EST

The Defense Department on Saturday formally announced the deaths earlier this week of three airmen in Afghanistan, saying they were killed in an improvised explosive device explosion.
The airmen died Thursday in Shir ghazi district, Helmand province, when their vehicle was struck by an IED, the Defense Department said.
The fallen airmen are:
• Senior Airman Bryan R. Bell, 23, of Erie, Pa. Bell was assigned to the 2nd Civil Engineer Squadron, Barksdale Air Force Base, La. Previous reports state Bell enlisted in 2006 and had been in Afghanistan for two months.
• Tech. Sgt. Matthew S. Schwartz, 34, of Traverse City, Mich. Schwartz was assigned to the 90th Civil Engineer Squadron, F.E. Warren Air Force Base, Wyo.
• Airman 1st Class Matthew R. Seidler, 24, of Westminster, Md. Seidler was assigned to the 21st Civil Engineer Squadron, Peterson Air Force Base, Colo.

Matthew was the 24 yr old son of one of my closest friends, now they get to bury their son, 7 weeks into his tour and the loss cannot be explained.

I can tell you this, not a single person in Gov't office has a child there.

D

SMOKE AND MIRRORS WORLD

What is REAL anymore? we live in a world so manipulated, so controlled.......nature has a way of evening things out.....THEY WILL keep the game going as long as they can and its creating an EBOLI FINANCIAL STORM CRISIS down the road.....what knucklehead politician is going to square it all out?

All we can do is try to make SOME sense of it all, and pass it on. We are DEAD IN THE MIDST OF A NEW BEAR MARKET IMHO, and that means a BIG haircut in stock prices is in the cards.

With 0% rates, under 2% for 10 years....in the face of RECORD DEBT ISSUANCE....where do you go and they have gone stock raving mad!

D