STOCK MARKET WATCH, Wednesday August 12

[ozymandius]

Source: du

STOCK MARKET WATCH, Wednesday August 12, 2009

Bush Administration Officials Under Indictment = 2
Financial Sector Officials In Prison = 4

AT THE CLOSING BELL ON August 11, 2009

Dow... 9,241.45 -96.50 (-1.03%)
Nasdaq... 1,969.73 -22.51 (-1.13%)
S&P 500... 994.35 -12.75 (-1.27%)
Gold future... 947.60 +0.70 (+0.07%)
10-Yr Bond... 3.67 -0.11 (-2.86%)
30-Year Bond 4.43 -0.10 (-2.16%)

---

U.S. FUTURES & MARKETS INDICATORS
NASDAQ FUTURES..............................................S&P FUTURES

Market Conditions During Trading Hours

GOLD, EURO, YEN, Loonie and Silver

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---

This thread contains opinions and observations. Individuals may post their experiences, inferences and opinions on this thread. However, it should not be construed as advice. It is unethical (and probably illegal) for financial recommendations to be given here.

Read more: du

[ozymandius]

1. Market Observation

Chinese Red-Chips Show Signs of Fatigue
BY GARY DORSCH

In a little more than nine months, the pendulum of trader sentiment in Asia has swung radically, from the extreme levels of panic and fear to the opposite side of the coin - hope and greed. Now, there is anxiety that asset bubbles are forming in the Asian tiger markets. At the epicenter of the Asian sphere, the Shanghai red-chip index has doubled in value from its lowest levels last November – surging higher in a parabolic fashion, often a tell-tale sign of a bubble.

Other stock markets in Hong Kong, India, and South Korea have also surged sharply higher, hitching a ride to the Shanghai bandwagon, and property prices are also rising from Seoul to Mumbai. Asian central banks are pursuing ultra-easy money policies to boost domestic spending in order to offset the damage to the export-dependent region from the collapse in global trade. In turn, upbeat stock markets in China and India are helping to underpin hopes for stronger economic growth.

.....

Chinese leaders are implementing the Greenspan – Bernanke blueprints to forestall a normal economic recession by flooding the markets with yuan, which creates bubbles. Indeed, Chinese banking regulators warned last month that credit was being channeled to the property sector and the stock market, creating the risk of an asset bubble instead of supporting small businesses and the broader economy.

.....

After doubling in value over the past eight months, Shanghai red-chips showed the first signs of fatigue over the past two-weeks, including a 5% slide in a single-day and a 7% slide over four-days before finding buyers at the 3,220-level on both occasions. Thus, the 3,220-level is seen as the key pivot point, which if sustained could encourage speculators to jump into red-chips for short-term gains, or if penetrated with a selling spree would signal a significant market top pattern. In either case, the gyrations in Shanghai are expected to ripple through the Asian sphere, and in turn influence key commodities such as copper and crude oil.

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

[Demeter]

27. I Can Identify the Greed in Action, But I Think It's Cynicism, Not Hope

They are riding on the banksters' coat tails, again.

[ozymandius]

2. Today's Reports

08:30 Trade Balance Jun
Briefing.com -$31.0B
Consensus -$28.6B
Prior -$26.0B

10:30 Crude Inventories 08/07
Briefing.com NA
Consensus NA
Prior +1.67M

14:00 Treasury Budget Jul
Briefing.com NA
Consensus -$180.0B
Prior -$102.8B

14:15 FOMC Rate Decision

http://www.briefing.com/Investor/Public/Calendars/EconomicCalendar.htm

[UpInArms]

17. U.S. June trade balance rises to $27 billion

U.S. June trade balance rises to $27 billion
8:30am Today

U.S. June imports rise 2.3% to $152.8 billion
8:30am Today

U.S. June exports rise 2% to $125.8 billion
8:30am Today

U.S. imports rise for first time in 11 months
8:30am Today

U.S. June oil imports rise 24% to $17.2 billion
8:30am Today

U.S. June real trade balance falls to 10-year low
8:30am Today

U.S. June imports ex-oil fall to 5-year low
8:30am Today

[UpInArms]

21. U.S. mortgage applications drop as loan rates rise

(not on the list, but pertinent)

http://www.reuters.com/article/businessNews/idUSTRE57B2FB20090812?feedType=RSS&feedName=businessNews

NEW YORK (Reuters) - U.S. mortgage applications fell last week, reflecting a drop in demand for home refinancing loans as interest rates soared to their highest levels since June, data from an industry group showed on Wednesday.

Applications for loans to buy homes, an early indicator of sales, rose slightly. Tepid interest in purchase loans does not bode well for the hard-hit U.S. housing market, which has been showing signs of stabilization.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended August 7 decreased 3.5 percent to 499.0.

Celia Chen, senior director of housing economics at Moody's Economy.com in West Chester, Pennsylvania, said higher interest rates on mortgages tend to depress home buying, but that demand is not as sensitive to changes in rates as it is in refinancing activity.

"Even though mortgage rates are rising, they still remain quite affordable," she said.

...more...

[UpInArms]

33. Petroleum Inventories Report

Crude stocks up 2.5 mln brls last week: EIA
10:31am Today

Gasoline stocks down 1 mln brls last week: EIA
10:31am Today

Distillate stocks up 0.8 mln brls last week: EIA
10:31am Today

[UpInArms]

41. FOMC pablum sends markets soaring

FOMC keeps fed funds target rate at 0% to 0.25%
2:16pm Today

FOMC: Rates to stay low for extended period
2:16pm Today

FOMC slows pace of Treasury purchases
2:16pm Today

FOMC says economy leveling out
2:16pm Today

FOMC says inflation will remain subdued
2:16pm Today

FOMC to end Treasury purchase program in October
2:16pm Today

[ozymandius]

3. Oil drops to near $69 amid weak crude demand

SINGAPORE – Oil prices dropped to near $69 a barrel Wednesday in Asia after the U.S. and OPEC said global crude consumption will slump this year as economies struggle to emerge from recession.

Benchmark crude for September delivery was down 34 cents to $69.11 a barrel by late afternoon in Singapore in electronic trading on the New York Mercantile Exchange. On Tuesday, the contract fell $1.15 to settle at $69.45.

The Energy Department's Energy Information Administration on Tuesday said global crude demand will likely fall by 1.71 million barrels this year, more than its previous forecast of a drop of 1.56 million barrels.

.....

In other Nymex trading, gasoline for September delivery fell 1.02 cents to $2.03 a gallon and heating oil dropped 2.17 cents to $1.88. Natural gas for September delivery slid 1.7 cents to $3.52 per 1,000 cubic feet.

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

[ozymandius]

4. What the Fed is mulling

NEW YORK (Reuters) – The Federal Reserve is expected to give a nod to signs the U.S. recession is waning but will likely warn that the recovery will be slow and dampen any expectations it will soon start to raise interest rates.

The Fed's policy-setting committee, which meets on Tuesday and Wednesday, is expected to hold its benchmark overnight rate in a range of zero to 0.25 percent. A statement on the decision is due about 2:15 p.m. EDT on Wednesday.

.....

The Fed is likely to decide to let its $300 billion Treasury purchase program expire, as scheduled, in September. Fourteen out of 16 primary dealers polled by Reuters last week said they expect the Fed not to extend the controversial program.

The central bank may debate whether to extend a program that supports financing for commercial real estate, however, given the steep drop in commercial property prices that could prove a stumbling block for a nascent recovery.

http://news.yahoo.com/s/nm/20090812/bs_nm/us_usa_fed_preview

[ozymandius]

5. Fed uncertainty, China sell-off rattle stocks

LONDON (Reuters) – Uncertainty about the Federal Reserve's view on the U.S. economy and another sharp fall in Chinese stocks pushed equities lower across the world on Wednesday and drove lower-yielding currencies higher.

The Fed started its two-day meeting on Tuesday, with expectations that it will leave benchmark interest rates near zero and let a $300 billion quantitative easing program to buy Treasury securities expire on schedule in September as economic gloom lifts.

.....

The Bank of England's inflation forecasts, due at 5:30 a.m. EDT, were also in focus after its surprise decision last week to extend its quantitative easing program.

.....

European shares fell in early trade on Wednesday, extending their losing run to three days. The pan-European FTSEurofirst 300 (.FTEU3) index of top shares was down 0.7 percent.

Earlier, Japan's Nikkei (.N225) closed down 1.4 percent.

http://news.yahoo.com/s/nm/20090812/bs_nm/us_markets_global_3

[ozymandius]

6. White House seeks new reins on derivatives

WASHINGTON – The Obama administration on Tuesday sent Congress legislation seeking to impose broad new oversight on derivatives, the complex financial instruments blamed for hastening the global economic crisis.

The plan is designed to bring transparency to, and prevent manipulation in, a $600 trillion unregulated worldwide market. Credit default swaps, a form of insurance against loan defaults, account for an estimated $60 trillion of that market. The collapse of the swaps brought the downfall of Wall Street banking house Lehman Brothers Holdings Inc. and nearly toppled American International Group Inc. last fall, prompting the government to support the insurance conglomerate with about $180 billion in aid.

The value of derivatives hinges on an underlying investment or commodity — such as currency rates, oil futures or interest rates. The derivative is designed to reduce the risk of loss from the underlying asset.

.....

Under the proposal, the big investment banks that trade the derivatives would be subject to requirements for holding capital reserves against risk and other rules. A new network of clearinghouses would be established to provide transparency for trades in credit default swaps and other derivatives. All so-called "standardized" derivatives would be required to go through clearinghouses and to be traded on regulated exchanges or electronic trading systems.

Customized derivative products, by contrast, are designed for specific users in a transaction and would remain largely unregulated — a gap that some critics fear could allow abuses.

http://news.yahoo.com/s/ap/20090812/ap_on_bi_ge/us_financial_overhaul_derivatives

[ozymandius]

7. Meltdown 101: Productivity boom mixed blessing

WASHINGTON – Productivity, the key ingredient needed for rising living standards, made a huge jump in the spring. In the worst recession in generations, that gain was a decidedly mixed blessing.

It was good news for companies struggling to control labor costs and survive, but hard on the workers who got laid off or saw their hours trimmed back.

.....

The latest increase in productivity, though, came about through the type of severe cost-cutting that occurs during recessions. As companies struggle to survive amid falling sales, they lay off workers and reduce the hours of the remaining workers.

In the April-to-June period, the total number of hours worked at non-farm businesses fell at an annual rate of 7.6 percent. Output was also down, but at a slower 1.7 percent rate of decline. The combination of a huge drop in hours worked and a smaller fall in output resulted in productivity rising at an annual rate of 6.4 percent.

http://news.yahoo.com/s/ap/20090811/ap_on_bi_ge/us_meltdown101_productivity

[fasttense]

13. Pretty soon, corporations are going to cut all their work force.

All that will remain will be a group of very expensive executives and CEOs trading their stocks to each other.

[DemReadingDU]

14. Bingo!

With the High Frequency Trading, who needs workers?

[Loge23]

16. "Our #1 product is cash!"

Responsibility is the coefficient of success. This is a simple fact that American business abandoned long ago.
Whether it was the focus of business schools on finance rather than management, or just pure evil greed (one vote for greed here), the primary goal of most businesses in this country has eliminated the part about providing value to their stakeholders.
It's not about making the best widget anymore, it's about making the most money. The customer be damned.
No one should begrudge a corporation from realizing profit - that's a no brainer; but when the profit motive supersedes the essential mission of the business, you lose the mission.

[tclambert]

37. I'm tellin' ya, it's those darn robots!

Skynet doesn't need to send Terminators to kill us, just worker bots to take all our jobs.

[ozymandius]

8. U.S. stock index futures signal dip ahead of Fed

* U.S. stock index futures pointed to a lower open on Wall Street on Wednesday as investors awaited the outcome of the Federal Reserve's two-day meeting.

* At 0818 GMT, futures for the S&P 500 SPc1 were down 0.41 percent, Dow Jones DJc1 futures were down 0.28 percent and Nasdaq 100 NDc1 futures were down 0.53 percent.

* The Fed's policy-setting committee, which is seen holding its benchmark overnight rate in a range of zero to 0.25 percent, is expected to give a nod to signs the U.S. recession is abating but will likely warn that the recovery will be slow and dampen any expectations it will soon start to raise interest rates . Its statement is due at around 1815 GMT.

* On the earnings front, companies expected to report results on Wednesday include Macy's (M.N), Harris (HRS.N) and Sara Lee (SLE.N).

http://www.reuters.com/article/usMktRpt/idUSLC65693820090812

[ozymandius]

9. Madoff Relied on ‘Key Lieutenant,’ Old Stationery to Hide Scam

Aug. 12 (Bloomberg) -- Bernard Madoff used a random-number generator, old stationery, a “phantom” trading platform and an aging computer to hide for decades the world’s biggest Ponzi scheme, U.S. regulators said in claims against the person they called his “key lieutenant,” Frank DiPascali.

.....

To keep regulators at bay, he helped create a random-number generator to make it look like trades of various sizes and prices were being carried out in different time zones.

.....

In the event of a surprise visit, one employee was supposed to enter fake trades on a computer screen while another hid in a nearby office playing the role of a counterparty from a linked computer. They tested the system, the SEC said, without specifying whether it was used.

Madoff kept old stationery and letterhead for his firm in case he needed to fabricate records for prior years, the SEC said. DiPascali also spent “substantial time and effort” mimicking the layout, font and paper used in official reports so he could document his trades, it said.

http://www.bloomberg.com/apps/news?pid=20601116&sid=a5wFd_5gLPMI

[Demeter]

28. Imagine If All That Effort Had Gone Into Something of Value to Society

of course, they would have had to be paid a lot less....like all productive people are in this country.

[Festivito]

10. Debt: 08/10/2009 11,661,947,544,315.89 (UP 3,734,835,679.42) (Up .2B.)

Debt: 08/10/2009 11,661,947,544,315.89 (UP 3,734,835,679.42) (Up .2B.)
(Debt up .2B$, FICA side up three and a half billion. Fixed a couple of problems points: second from last line in analysis and deleted three lines from time heavy borrowing section at end of post started during Bush admin which has no relevance when including mixture of Bush and Obama eras.)

= Held by the Public + Intragovernmental(FICA)
= 7,330,385,850,531.73 + 4,331,561,693,784.16
UP 222,135,743.03 + UP 3,512,699,936.39

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 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.77, ABOUT TEN BUCKS for a 1B$ 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 a another American, so at the end of the workday of the report, there should be 307,063,142 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,978.99.
A family of three owes $113,936.97. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 22 reports in the last 30 to 31 days.
The average for the last 22 reports is 6,242,784,279.58.
The average for the last 30 days would be 4,578,041,805.03.
The average for the last 31 days would be 4,430,363,037.12.
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$/day.
There were 139 reports in 202 days of Obama's part of FY2009 averaging 7.39B$ per report, 5.12B$/day so far.
There were 214 reports in 314 days of FY2009 averaging 7.65B$ per report, 5.21B$/day.

PROJECTION:
There are 1,259 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.2T$.
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)
08/10/2009 11,661,947,544,315.89 BHO (UP 1,035,070,495,402.81 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,637,222,647,403.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
07/21/2009 -000,321,987,025.18 ---
07/22/2009 +000,261,059,305.61 ------------********
07/23/2009 +010,040,233,982.08 ------------**********
07/24/2009 -000,124,358,216.07 ---
07/27/2009 +000,077,777,899.40 ------------******* Mon
07/28/2009 +000,420,333,618.55 ------------********
07/29/2009 +000,733,026,310.02 ------------********
07/30/2009 -026,031,384,097.19 -
07/31/2009 +095,534,108,940.65 ------------**********
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******
08/06/2009 -000,578,106,269.92 ---
08/07/2009 +000,290,467,707.81 ------------********
08/10/2009 +000,222,135,743.03 ------------******** Mon

75,401,360,827.49 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power.
Since then US borrowed $1,997,315,741,056.82 in last 326 days.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4010081&mesg_id=4010174

[Festivito]

50. Debt: 08/11/2009 11,666,485,985,007.89 (UP 4,538,440,692.00) (Up .2B.)

(Debt up .2B$, FICA side up over four billion.)

= Held by the Public + Intragovernmental(FICA)
= 7,330,632,603,032.18 + 4,335,853,381,975.71
UP 246,752,500.45 + UP 4,291,688,191.55

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 307-Million person America.
If every American, man, woman and child puts in $3.26 each THAT'S 1B$.
A family of three: Mom, Dad, Child: $9.77, ABOUT TEN BUCKS for a 1B$ 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 a another American, so at the end of the workday of the report, there should be 307,070,342 people in America.
http://www.census.gov/population/www/popclockus.html ON 05/25/2009 01:14 -> 306,504,012
Currently, each of these Americans owe $37,992.88.
A family of three owes $113,978.63. (And that is IN ADDITION to their mortgage.)

ANALYSIS:
There were 23 reports in the last 30 to 32 days.
The average for the last 23 reports is 6,168,682,384.47.
The average for the last 30 days would be 4,729,323,161.43.
The average for the last 32 days would be 4,433,740,463.84.
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$/day.
There were 140 reports in 203 days of Obama's part of FY2009 averaging 7.37B$ per report, 5.12B$/day so far.
There were 215 reports in 315 days of FY2009 averaging 7.64B$ per report, 5.21B$/day.

PROJECTION:
There are 1,258 days remaining in this Obama 1st term.
By that time the debt could be between 13.4 and 18.2T$.
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)
08/11/2009 11,666,485,985,007.89 BHO (UP 1,039,608,936,094.81 so far since Obama took office.)

Fiscal Year ends: Sep 30
Borrowed in FY1993: (Maybe later.)
Borrowed in FY1994: 281,261,026,873.94
Borrowed in FY1995: 281,232,990,696.07
Borrowed in FY1996: 250,828,038,426.34
Borrowed in FY1997: 188,335,072,261.61
Borrowed in FY1998: 113,046,997,500.28
Borrowed in FY1999: 130,077,892,735.81
Borrowed in FY2000: _17,907,308,253.43 Bill alone
Borrowed in FY2001: 133,285,202,313.20 Bill and George
Borrowed in FY2002: 420,772,553,397.10 All George
Borrowed in FY2003: 554,995,097,146.46
Borrowed in FY2004: 595,821,633,586.70
Borrowed in FY2005: 553,656,965,393.18
Borrowed in FY2006: 574,264,237,491.73
Borrowed in FY2007: 500,679,473,047.25
Borrowed in FY2008: 1,017,071,524,650.01
Borrowed in FY2009: 1,641,761,088,095.40 so far this fiscal year.

LAST FIFTEEN REPORTS OF ADDITIONS TO PUBLIC DEBT(NOT FICA):
07/22/2009 +000,261,059,305.61 ------------********
07/23/2009 +010,040,233,982.08 ------------**********
07/24/2009 -000,124,358,216.07 ---
07/27/2009 +000,077,777,899.40 ------------******* Mon
07/28/2009 +000,420,333,618.55 ------------********
07/29/2009 +000,733,026,310.02 ------------********
07/30/2009 -026,031,384,097.19 -
07/31/2009 +095,534,108,940.65 ------------**********
08/03/2009 -005,083,538,887.00 -- Mon
08/04/2009 -000,056,382,262.77 ----
08/05/2009 +000,017,974,078.47 ------------*******
08/06/2009 -000,578,106,269.92 ---
08/07/2009 +000,290,467,707.81 ------------********
08/10/2009 +000,222,135,743.03 ------------******** Mon
08/11/2009 +000,246,752,500.45 ------------********

75,970,100,353.12 Total of 15 above reports.

Heavy borrowing seems to start after 09/18/2008 while Bush was in power.
Since then US borrowed $2,001,854,181,748.82 in last 327 days.

For a prettier and more explanatory view of our nation's debt:
http://www.brillig.com/debt_clock

(Debt to the penny keeps changing. Stuff is missing. Best to keep our own history.) LAST REPORT:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=4011382&mesg_id=4011409

[ozymandius]

11. These people just don't get it. Without a damned clue.

Benmosche Said to Start AIG Tenure With Croatian Trip (Update1)

Aug. 11 (Bloomberg) -- Robert Benmosche, the chief executive officer of American International Group Inc., plans to spend part of his first month leading the insurer in Croatia on vacation, according to two people familiar with the situation.

Benmosche, 65, who started yesterday as CEO and president of the bailed-out company, will leave for about two weeks, according to one of the people, who declined to be identified because the plans were private. Mark Herr, an AIG spokesman, said the New York-based firm wouldn’t comment on CEO travel.

.....

Benmosche bought a Croatian villa, with 8,000 square feet of living space located along the Adriatic Coast, after visiting Dubrovnik in 1999, according to a 2004 Forbes magazine article. He paid about $1 million for the property, which was built in 1934 for the king of Yugoslavia’s treasurer and included four buildings and 150 feet of waterfront, the magazine said.

---

My take is that the business-as-usual habits of the past make people like this numb to the thought of how others see them. If this were my leader, and a leader defined as one who inspires confidence and enthusiasm among his staff, then this would be one powerful message indicating a lack of compunction about his role at AIG. This would inspire me to give less at my job.

[Tansy_Gold]

20. Neither did Louis and Marie Antoinette

Hi, all, from lovely wet New Jersey!

have had little internet access on my own vacation these past two weeks, so I'm eager to get home to sunny Arizona and catch up on all the latest.

See you soon!

Tansy Gold, fellow traveler

[ozymandius]

23. Good morning , Tansy.

I have a brief moment to chime in here, too. I've wondered how you are doing. Thanks for the update.

[Tansy_Gold]

45. will be home late Friday

It's been a hectic 2+ weeks. It will be good to be home and back to "normal." And back in touch with SMW and WEE, which I have missed almost (but not quite) as much as I've missed my dogs.


TG

[Demeter]

49. Such an Honor, to Rank Second Behind Your Babies!

Hurry home, now. It's not the same thread without you!

[Demeter]

29. "Fellow Traveler"! Now THAT'S a Loaded Phrase!

Perhaps you need to think of something a little less tainted?

[Tansy_Gold]

44. chosen most intentionally

Tansy Gold, who herself is NOT loaded, in any sense. . . . .:evilgrin:

[mbperrin]

26. "because the plans were private" AIG cannot have any private anything

because the taxpayers put $180 billion into a $2 billion dollar company, and we still don't own all of it.

But we own enough of it that there is no privacy at the stinkhole.

Tonedeaf doesn't cover it. Isolation tank, perhaps, with virtual porn piped in.

[tclambert]

38. Remember when those southern Senators savaged the auto execs

for flying private jets to DC to beg for bailout money? Then Congress turned around and bought more private planes for their own use? Oh, and those "too big to fail" financial companies didn't even have to beg for bailout money. We just threw bags of money at them. And their execs give multi-million dollar bonuses to themselves and throw lavish parties . . .

[ozymandius]

12. JP Morgan Chase Caught Speculating with Customer Money

"Flagrant evils cure themselves by being flagrant..." John Henry Newman

Why the surprise? This is what the Wall Street banks do, even under a 'reform' administration. They use their customer money and public funds, for which they pay a pittance, to speculate in markets, distorting prices and taking enormous risks, in order to pay themselves outrageous bonuses. They buy politicial influence to enable regulatory capture and support their financial schemes. And when their bets go wrong, the public absorbs the losses. This is the model of US gangster banking in the 21st century.

.....

So it remains for the rest of the world to begin to rein in the outrageous behaviour of the US financial institutions that treat the world's bourses as their private casinos.

.....

Banks are meant to maintain a strict segregation of their own money from that which is held on behalf of clients.

But JP Morgan managers in London discovered last month that client and bank money used for trading futures and options - a way of speculating on movements in currencies, share prices and commodities - had apparently been put into a single pool.

They raised the alarm and notified the FSA (Financial Services Authority). The scale of case is unprecedented, say City insiders. The FSA has penalised small firms in the past for mixing funds owned by clients and the banks themselves.

But this is thought to be the first case involving such a large household name. JP Morgan Chase faces the threat of an unlimited fine if the watchdog decides enforcement action is necessary.

http://www.nakedcapitalism.com/2009/08/jp-morgan-chase-caught-speculating-with.html

[Po_d Mainiac]

15. If you missed Denninger's rant yesterday...link below

:donut:

I just received one of the famous "fundraising calls" from the RNC.

They were soliciting people to give them money (and tried for slightly over $3k!) to "stop Obama's Health Care plan that will cost $1 trillion."

Oh boy did that poor sap get an earful.

http://market-ticker.org/authors/2-Karl-Denninger

[4dsc]

24. Wow, this is good stuff..

Boy did this person lay into the GOP..

[Hugin]

31. Recession Hits Home for Tom Friedman (ma-jones)

— By Daniel Luzer | Fri April 17, 2009 2:03 PM PST

New York Times columnist Thomas Friedman is one of free market capitalism's loudest cheerleaders. The premise goes like this: Developing countries make consumer goods so inexpensively that people in rich countries can afford to buy them and have money left over. Because of all the extra dough, demand for consumer products shoots up and makes third world countries rich. What's good for China is good for America and everyone wins, right? Not quite.

Yesterday morning, another crack appeared in Friedman's the-consumer-always-wins model when one of America's largest shopping mall companies, Chicago-based General Growth Properties, filed for bankruptcy. Friedman's pretty close to GGP's malls; the Bucksbaum family owns them, and Ann Bucksbaum is Tom Friedman's wife.

http://www.motherjones.com/riff/2009/04/recession-hits-home-tom-friedman
________________________________________________________________________________________________

Karl D. dips into the current news concerning GGP... Yes, "Flat World" "Chicago School" "Economist" Friedman is hip deep in this one.

"The Bezzle Finds A Match: JUDGES"

That which the lawmakers won't stop, that which the regulators won't stop, the judges just might:

The judge in General Growth Properties Inc.'s bankruptcy case rejected creditors' motions to dismiss several properties from the case, clearing the way for the mall owner to begin talks with its lenders about long-term debt extensions that would eventually allow it to exit bankruptcy court.

In a decision Tuesday, Judge Allan Gropper of the U.S. Bankruptcy Court in Manhattan ruled against the arguments of loan servicers ING Capital Loan Services LLC and Helios AMC LLC and lender Metropolitan Life Insurance Co. The three had separately argued that the General Growth malls they financed with mortgages are structured as individual "special purpose entities" that shouldn't be included in a broad corporate bankruptcy filing.

This entire "SPE" game has been a scam from the outset. Banks and others have used this scheme for years under the claim that the SPEs are "separate" entities.

But they're not - they are sponsored and controlled by the parent - just like any other subsidiary. The same thing holds true for banks that have stuffed somewhere around $2 trillion in tranched "assets" into these SPEs (e.g. credit card receivables, etc) and then have claimed that they should not have to count these as "assets" against their capitalization, thereby avoiding having to reserve against them as well as count them against capital ratios.

The Judge in this case said "NUTS!" and effectively destroyed this argument. All other Commercial Real Estate REITs now have to be considering whether they are also subject to this same treatment (the answer is "Yes!") and what that might mean for them and their investors.

Much more... http://market-ticker.org/archives/1323-The-Bezzle-Finds-A-Match-JUDGES.html

_____________________________________________________________________________________________________________

There are a few things Karl D. and I don't agree on... But, at the very least he supports his arguments and concepts with empirical fact. Something widely lacking in the current corporate media.

[Po_d Mainiac]

32. It could be a literary classic...a couple of the better lines below

Why is it that "conservative" doesn't include calling for EACH AND EVERY ONE OF THESE SCAMMERS TO BE THROWN IN PRISON and WHY IS IT THAT I KEEP HEARING ABOUT SOME FLOOZY SCANDAL FROM THESE SO-CALLED "FAMILY VALUES" CHAMPIONS?

We will pledge to shut our pie holes about "family values" until each and every one of us can keep our penis in our pants, except when used to urinate or have sexual congress with our WIFE or SIGNIFICANT OTHER, and the HYPOCRITES in this regard have RESIGNED - all of them - forthwith.

:rofl: :rofl:

[UpInArms]

18. dollar watch

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

Last trade 79.093 Change -0.053 (-0.07%)

Fed May Disappoint Many Dollar Bulls

http://www.dailyfx.com/story/topheadline/Fed_May_Disappoint_Many_Dollar_1250028730720.html

Despite a considerable improvement in financial markets, the Federal Reserve is widely expected to keep its benchmark interest rate unchanged at 0.25% to 0%, a record low. Indeed, economic activity remains constrained by ongoing job losses, lower housing wealth, and tight credit”, the Federal Open Market Committee recently said. However, it will be interesting to see if the Fed expresses some concern about inflation since energy prices and soft commodities have risen of late (sugar is up by more than 30% YTD). The dollar has been well bid ahead of the rate decision on speculation the resumption of economic growth in the United States will lead to a positive shift of interest rate differentials in favor of the dollar. Yet, investors will be disappointed if the Fed fails to signal an exit strategy for quantitative easing.

...more...

BoE's Sees CPI Remaining Below Target Rate for an Extended Period

http://www.dailyfx.com/story/dailyfx_reports/top_fx_market_movers/BoEs_Inflation_Report_Sees_CPI_1250078702988.html

Fundamental Headlines

• Economists Call for Bernanke to Stay – Wall Street Journal
• Productivity Leaps as Companies Cut Costs – Wall Street Journal
• Subdued recovery in global oil demand – Financial Times
• Treasuries, Dollar Pessimism Rises on Speculation Global Recession to End – Bloomberg
• FSA Rules Seek to Rein In Risky Banker Bonuses Without Deferring Payments – Bloomberg


GBPUSD – The Bank of England’s Inflation Report indicated that CPI may fall below the 2% target as policymakers anticipate a ‘slow recovery,’ and projects price growth to average 1.5% over the next two years. The report also said inflation will probably stay below 1% and remain volatile for the rest of 2009 as the domestic and global economy remains in a deep recession. At the same time, Governor King emphasized that the recovery will be slow and protracted, as credit conditions are likely to remain tight. Meanwhile, jobless claims in the U.K. increased 24.9K to 1.58M in July amid expectations for a 28.0K rise, while the International Labour Organization’s gauge for unemployment jumped to 7.8% in June from 7.6% in the previous month to mark the highest level since 1996.

EURUSD – Euro-Zone Industrial Production came in much worse than expected, falling 0.6% monthly, versus an expected increase of 0.3%. This was largely attributed to a 4.2% decline in the production of durable consumer goods. The lack of demand for long lasting items may be a sign that businesses and consumer s remain cautious despite signs of an economic recovery. The ECB may be overly optimistic about a return to growth by mid-2010 which could leave them on hold for the foreseeable future despite rising interest rate expectations.

...more...

[UpInArms]

19. Liz Claiborne posts wider-than-expected loss (who could have foreseen this?)

http://www.reuters.com/article/businessNews/idUSTRE57B2KI20090812?feedType=RSS&feedName=businessNews

BANGALORE (Reuters) - Liz Claiborne Inc (LIZ.N) reported a deeper-than-expected quarterly loss on Wednesday, sending its shares down 9 percent, as the lingering recession kept many shoppers from buying the company's clothing and accessories.

The owner of the Juicy Couture, Kate Spade and Lucky Brand chains said its second-quarter net loss had widened to $82.1 million, or 87 cents a share, from $23.2 million, or 25 cents a share, a year earlier.

Excluding items, the loss was 48 cents a share. This compares with the analysts' average forecast of a loss of 39 cents, according to Reuters Estimates.

Net sales fell 29 percent to $684 million.

The results reflect the challenges of turning around underperforming businesses as consumer spending and mall traffic remained at depressed levels compared with last year, Chief Executive William McComb said in a statement.

Like other apparel companies, Liz Claiborne has been hit hard in the recession as retailers place fewer orders to keep inventories lean and shoppers cut back on nonessential purchases.

Sales at its retail stores open at least a year fell 17 percent in the second quarter, hurt by declines across all brands.

For the third quarter, Liz Claiborne sees same-store sales declines in the 15 percent to 25 percent range at its Juicy Couture, Lucky Brand and Kate Spade chains.

The company said it planned to save an additional $100 million in costs by further streamlining activities.

The cost-cutting efforts will focus primarily on further distribution center consolidation, outsourcing of certain corporate functions, consolidation of support and production staff, and store closures at its Mexx business.

...more...

I guess people writing news stories in Bangalore don't shop in America's stores

:sarcasm:

[fasttense]

25. Good point.

People making lead painted toys in China don't shop in American stores either. Those damn American consumers need to get back to shopping and buying foreign made crap. If you don't have a job, you can't buy anything.

[UpInArms]

22. Nestle trims 2009 outlook as sales disappoint (oh noes!)

http://www.reuters.com/article/businessNews/idUSTRE57B1J820090812?feedType=RSS&feedName=businessNews

ZURICH (Reuters) - Nestle (NESN.VX), the world's biggest food group, pared its full-year outlook on Wednesday after missing forecasts with first-half organic sales growth of 3.5 percent, knocking its shares lower.

Analysts polled by Reuters had on average forecast that organic sales growth, which strips out currency effects and acquisitions, would increase to 3.9 percent after 3.8 percent in the first quarter.

The maker of Nescafe coffee, KitKat chocolate bars and Maggi soup dropped its target for 2009 organic sales growth "at least approaching 5 percent," saying only that it "expects volume-driven organic growth to accelerate in the second half."

Chief Financial Officer Jim Singh said consensus forecasts for the full-year -- with organic growth seen at 4.3 percent, according to a recent Reuters poll of analysts -- were a good interpretation of Nestle's guidance.

After just 0.5 percent of organic growth came from volume in the first half, he said volume should drive growth more than pricing in the second half, adding Nestle had cut prices in the last quarter and did not see any significant price rises ahead.

"We are seeing a recovery from a tough period between November and March. We expect this trend of improvement to continue in the second half," Singh told analysts.

...more...

I guess all those people that were shoved out on the streets quit buying their cheap (but not inexpensive) imported (without taxes) crap!

[Demeter]

30. Well, Ozy, Things Are Finally Beginning to Bust Loose!

Between Rove's testimony, Bernie's best man spilling the beans, and AIG's new CEO, I expect you might be updating the masthead on this thread soon!

All those chickens finally coming home to roost. Hope the Family breaks up, too!

[mullard12ax7]

34. I missed this great post the other day "Recovery My Ass"

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=6258716&mesg_id=6258716

[spotbird]

35. Half of US Homeowners Will Be Underwater by 2011

Last week, Deutsche Bank analyst Karen Weaver published a report that shook up the "housing is recovering" crowd. She predicted that, by next year, nearly half of American homeowners with mortgages will be underwater.

Before we go into the details, here's a basic refresher on the US housing market:

* There are approximately 110 million households in the U.S.
* About 75.5 million of these are homeowners.
* Approximately 68% of the 76 million, or 51.6 million, have mortgages.
* 14 million U.S. homeowners, 27% of those with mortgages, were underwater at the end of Q1 (DB estimates)
* DB estimates that nearly half of the 52 million mortgagors will be underwater by the end of next year.

(Note that this is half of those with mortgages, not half of all households)

http://finance.yahoo.com/techticker/article/299149/Half-of-US-Homeowners-Will-Be-Underwater-by-2011?ref=patrick.net

[Dr.Phool]

36. Thanks for the clarification on the numbers.

I just found out last week, that according to the VA appraiser, I'm underwater. Not much, but I owe more than it's worth. The house appraised for $35k less than I bought it for 7 years ago.

But, I'm not going anywhere. It's still cheaper than renting a comparable place.

[tclambert]

39. Yeah, that's the thing. Who can afford to move?

Especially if you're underwater. Do you walk away from one mortgage and try to get another? Where do you get a down payment from? If you don't mind living in your current house, why move at all?

[spotbird]

42. It happened to us during the

mini bubble in the early 90's. We were underwater (they didn't call it that then) when we were transferred to another state. We borrowed the money to close and rented a really cheap place at our new location until we repaid the loan. It was an important life lesson. Now it would be difficult to get the unsecured loan to close, so I don't know what people do. Walk away or try to rent it, I suppose.

[tclambert]

40. Market started up sharply today, came back down a little right at the end.

DJIA up 1.3%, Nasdaq up 1.47%, S&P 500 up 1.15%.

Apparently the Fed made happy talk and reassured traders.

[Demeter]

43. It Reeks of Manipulation

Markets don't go up exponentially all by themselves.

[DemReadingDU]

46. The higher the market goes up

The lower it will go when it comes down.

[janx]

52. We're not talking physics.n/t

[janx]

51. No, because it started up sharply before that happened. It climbed readily in the morning.

There were some ups and downs after The Federal Bank made its announcement, but then there was a further rally.

[Hawkowl]

47. Elizabeth Warren: "Real problems coming..."

Found this nice video on Zerohedge of Ms. Warren explaining that Paulson and Geithner have solved nothing and we are going to pay bigtime.

http://www.zerohedge.com/article/elizabeth-warren-we-have-real-problem-coming

[Demeter]

48. Good Find! Thanks for Posting

The Truth will out. The Bad Guys don't believe this, and it always bites them in the end.